Steps Hedge Fund Managers Can Take in Light of NY Attorney General’s View That Certain Non-Compete Clauses Are Unconscionable 

In a move that caught many by surprise, the New York Attorney General recently announced that it had settled investigations with two companies regarding their use of non-compete provisions in employment agreements. While neither of these settlements was with an investment management firm, the broad and unfavorable statements made by the New York Attorney General concerning non-competes should not be ignored by hedge fund managers. To understand the impact of these settlements on alternative asset managers, along with what, if any, steps managers should take to protect themselves from similar enforcement actions, the Hedge Fund Law Report interviewed Richard J. Rabin, partner at Akin Gump and head of the firm’s New York labor and employment group. For additional insight from Rabin, see “What the NLRB Complaint Against Bridgewater Means for Hedge Fund Manager Employment Agreements” (Sep. 8, 2016). For a broader discussion on restrictive covenants in employment agreements, see “Non-Competition and Non-Solicitation Provisions and Other Restrictive Covenants in Hedge Fund Manager Employment Agreements” (Nov. 23, 2011).

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