adehbone Wrote: ------------------------------------------------------- > Why people laugh at this thread and make jokes? > > While Willy’s thread had more applicants than the > membership on monster.com… The Dan Loeb lettter… ---- Original Message ----- To: [A Citadel email address] At: 9/14 5:28 Dear Ken, I understand that you recently hired an employee of Greenlight and have also attempted to hire Third Point employees in the past. I think Andrew made a horrible decision based upon discussions that I have had with numerous former and current Citadel employees/indentured servants. I find the disconnect between your self-proclaimed “good to great, Jim Collins-esque” organization and the reality of the gulag you have created quite laughable. You are surrounded by sycophants but even you must know that the people who work for you despise and resent you. I assume you know this because I have read the employment agreements that you make people sign. I understand your need to hire employees from other firms, something that Third Point has not had to do based on the fact that unlike yourself, I actually enjoy and have talent in investing and am able to nuture others within my organization who I hire from wide ranging disciplines such as graduate schools, private equity firms and medicine. Let me be clear that under no circumstances are you to approach any Third Point employees or attempt to offer them jobs. First of all, like Brad Radoff, who you poached from me some years ago, you do not even know how to manage people who invest. He has happily returned to the Third Point fold and is doing extremely well. Secondly, those that you have approached know what low regard I hold you and your over-rated firm and they are happy to meet with you and report back to me the sorry state of affairs over there and your desperate attempt to replicate our success. My warning extends to any attempt you may make to hire employees of my friends in the event driven space: should you attempt to hire people from them I will consider it a similar act of war. My friends enemies become my enemies. Good luck extracting exhorbitant management fees and generating mediocre returns with your bloated organization and ego. By the way there is little I enjoy as much as watching from afar as your reputation and “organization” declines at the same rate as your falling returns. DL
Hey JoeyD, you realize that non-competes are worth about as much as the paper they are printed on… they don’t and won’t stand up in court (except in very, and I mean very rare circumstances). They’re designed to scare the uninformed. They’re not even legal in California. Now before you write some lame ass rebuttal go check with any 2nd year law student.
Yeah right. You should try being on the receiving end of that. How much money does Ken Griffin have and how much do you have? So now go to a lawyer who will tell you “oh it will cost you about $20K”. Then ask him what will happen if Ken G puts up $1M to fight. Think he would never do that? Edit: I’ve been there on the receiving end of this and it is as miserable as you can imagine. The non-compete is just a small part of what you get by signing one of these agreements. Enforcing the non-compete is tough - using it as a springboard to launch into an intellectual property case is really easy (unless you don’t know anything). The average intellectual property lawsuit costs $500,000/side. Ken G can pay it. Can you? Edit 2: And before you write some snot-nosed reply, try being up at 3:00 AM on Westlaw writing legal memoranda because you can’t afford to hire lawyers to fight the lawyers of four (count 'em) law firms who are writing memoranda you must respond to. People who say these agreements don’t mean anything either are right because their employer doesn’t care about them or are completely naive.
Joey, I don’t know your situation (age, financials, reason for leaving, terms of contract, etc.) so its difficult for me to provide advice. However, I do know that in reality your probably being bullied into believing they’re going to go through with it when in actuality they’re not.
jlx177 Wrote: ------------------------------------------------------- > Hey JoeyD, you realize that non-competes are worth > about as much as the paper they are printed on… > they don’t and won’t stand up in court (except in > very, and I mean very rare circumstances). They’re > designed to scare the uninformed. They’re not even > legal in California. > > Now before you write some lame ass rebuttal go > check with any 2nd year law student. Non-competes are 100% enforceable, check with any 3rd year law student.
jlx177 Wrote: ------------------------------------------------------- > Joey, I don’t know your situation (age, > financials, reason for leaving, terms of contract, > etc.) so its difficult for me to provide advice. > However, I do know that in reality your probably > being bullied into believing they’re going to go > through with it when in actuality they’re not. It’s long over and they did go through with it and it hurt a lot. No bluff when you’re standing there in Court with a ton of lawyers.
jlx177 Wrote: ------------------------------------------------------- > Joey, I don’t know your situation (age, > financials, reason for leaving, terms of contract, > etc.) so its difficult for me to provide advice. > However, I do know that in reality your probably > being bullied into believing they’re going to go > through with it when in actuality they’re not. jlx177, i think you should stick to subject matter with which you are actually knowledgeable
jlx177 Wrote: ------------------------------------------------------- > Joey, I don’t know your situation (age, > financials, reason for leaving, terms of contract, > etc.) so its difficult for me to provide advice. > However, I do know that in reality your probably > being bullied into believing they’re going to go > through with it when in actuality they’re not. Seriously, if you read up on Citadel and see how much they track what they call “PhD-ROE”, and you don’t think they’ll come after you for models you developed while working for them you’re just crazy…
JoeyDVivre Wrote: ------------------------------------------------------- > adehbone Wrote: > -------------------------------------------------- > ----- > > Why people laugh at this thread and make jokes? > > > > While Willy’s thread had more applicants than > the > > membership on monster.com… > > The Dan Loeb lettter… > > ---- Original Message ----- > To: > At: 9/14 5:28 > > Dear Ken, > > I understand that you recently hired an > employee of Greenlight > and have also attempted to hire Third Point > employees in the past. I > think Andrew made a horrible decision based upon > discussions that I have > had with numerous former and current Citadel > employees/indentured > servants. I find the disconnect between your > self-proclaimed “good to > great, Jim Collins-esque” organization and the > reality of the gulag you > have created quite laughable. You are surrounded > by sycophants but even > you must know that the people who work for you > despise and resent you. I > assume you know this because I have read the > employment agreements that > you make people sign. > I understand your need to hire employees > from other firms, > something that Third Point has not had to do based > on the fact that > unlike yourself, I actually enjoy and have talent > in investing and am > able to nuture others within my organization who I > hire from wide > ranging disciplines such as graduate schools, > private equity firms and > medicine. Let me be clear that under no > circumstances are you to > approach any Third Point employees or attempt to > offer them jobs. > First of all, like Brad Radoff, who you > poached from me some > years ago, you do not even know how to manage > people who invest. He has > happily returned to the Third Point fold and is > doing extremely well. > Secondly, those that you have approached know what > low regard I hold you > and your over-rated firm and they are happy to > meet with you and report > back to me the sorry state of affairs over there > and your desperate > attempt to replicate our success. My warning > extends to any attempt you > may make to hire employees of my friends in the > event driven space: > should you attempt to hire people from them I will > consider it a similar > act of war. My friends enemies become my enemies. > Good luck extracting exhorbitant management > fees and generating > mediocre returns with your bloated organization > and ego. By the way > there is little I enjoy as much as watching from > afar as your reputation > and “organization” declines at the same rate as > your falling returns. > > DL Can you provide the context and background information on this letter?
Bossi & numi… As I said previously, non-competes are enforceable in certain situations. However, in MOST cases, they’re not. Companies can’t deter you from earning a living… especially if you have a very defined and technical skill set. For example: if you are a niche software developer and there are only two companies in the world that require your skill set there is NO way that the former company can stop you from moving to the other company… this issue was seen a number of times in Silicon Valley over the past 20 years… which is a reason why California made them illegal. But hey, maybe three graduate-level professors and a corporate lawyer are wrong. ahahah… come on man, of course if you take models (a better word might be steal) you develop while at the firm they will go after you. But that has nothing to do with non-competes. That’s a totally different legal issue alltogether.
jlx177 Wrote: ------------------------------------------------------- > Bossi & numi… As I said previously, non-competes > are enforceable in certain situations. However, in > MOST cases, they’re not. Companies can’t deter you > from earning a living… especially if you have a > very defined and technical skill set. > > For example: if you are a niche software developer > and there are only two companies in the world that > require your skill set there is NO way that the > former company can stop you from moving to the > other company… this issue was seen a number of > times in Silicon Valley over the past 20 years… > which is a reason why California made them > illegal. But hey, maybe three graduate-level > professors and a corporate lawyer are wrong. > > ahahah… come on man, of course if you take > models (a better word might be steal) you develop > while at the firm they will go after you. But that > has nothing to do with non-competes. That’s a > totally different legal issue alltogether. What if you’re a PhD quant, like JDV, and you work on fairly typiical option pricing models etc for Citadel which you would definitely use some form of at any job you have afterwards. They’re not really their models which you’re stealing, but do you want to go toe-to-toe with their lawyers trying to prove it?
I’ll bet not one of them has been through it. The problem is that it is just not table-stakes and a guy like Ken G has tons of money to make your life miserable. Your example is partly true. If there are only two companies doing this activity then the social good of the competition helps you beat the non-compete. If your old employer stops there, you’re fine. (In California alone in the 50 you have no troubles with these things because they are all illegal). BUT - If you bring intellectual property to the other company, they have you big in Connecticut because they file for an injunction under CUTPA (uniform trade practices act) saying that the company only hired you to gain the secrets of the other, the file an intellectual property lawsuit under the doctrine of implied disclosure, i.e., that you couldn’t possibly do that job without disclosing the secrets of the other company, and they start a Federal industrial espionage suit against you (which has serious teeth though it is wildly unlikely to succeed). There’s even the start of a precedent here in a Gillette vs Schick battle in CT that was similar. You might be able to win those issues but not by showing up in Court and asserting your right to work anywhere you damn well please. Intellectual property and non-competes are tied together in so many ways that if you think they are unrelated you don’t really know anything about battles over non-compete agreements.
ahahah Wrote: ------------------------------------------------------- > jlx177 Wrote: > -------------------------------------------------- > ----- > > Bossi & numi… As I said previously, > non-competes > > are enforceable in certain situations. However, > in > > MOST cases, they’re not. Companies can’t deter > you > > from earning a living… especially if you have > a > > very defined and technical skill set. > > > > For example: if you are a niche software > developer > > and there are only two companies in the world > that > > require your skill set there is NO way that the > > former company can stop you from moving to the > > other company… this issue was seen a number > of > > times in Silicon Valley over the past 20 > years… > > which is a reason why California made them > > illegal. But hey, maybe three graduate-level > > professors and a corporate lawyer are wrong. > > > > ahahah… come on man, of course if you take > > models (a better word might be steal) you > develop > > while at the firm they will go after you. But > that > > has nothing to do with non-competes. That’s a > > totally different legal issue alltogether. > > > What if you’re a PhD quant, like JDV, and you work > on fairly typiical option pricing models etc for > Citadel which you would definitely use some form > of at any job you have afterwards. They’re not > really their models which you’re stealing, but do > you want to go toe-to-toe with their lawyers > trying to prove it? In fact, JDV has done exactly that and the answer is absolutely not unless you have tons of money to blow and you just don’t care about it.
BTW - there was a guy on AF a couple of year ago with a non-compete problem with Citadel who corresponded with me about it (hence I have read their non-competes which are stringent but high-quality).
I’ve actually read cases where software companies try to go after individuals for stealing code. For the company to win they have to show that you took and are using the exact same code. It’s extremely tough actually. If a company went after you for using widely known models or theories then they’re being a$$holes just to be a$$holes. They know they’re going to lose but don’t care as they have deeper pockets. To answer your question. I think you have to defend yourself. It would be a royal pain and very costly but what are the alternatives. You could get a job in a field you have no experience probably at a lower salary or stay unemployed… which doesn’t make sense to me. I think if a company did this every time an employee left, the company would eventually fizzle out. I don’t care how large or profitable it is, people wouldn’t work there for fear that would be sued when they left. These are just my opinions.
JDV, so what did you do (or should someone in that situation do)? Work in a different group (I mean going from equity derivatives to say currencies)? Stay unemployed till the contract expires?
jlx177 Wrote: ------------------------------------------------------- > JDV, so what did you do (or should someone in that > situation do)? Work in a different group (I mean > going from equity derivatives to say currencies)? > Stay unemployed till the contract expires? Fight it out but it’s unbelievably draining and I would never do it again or advise anyone else to do it. This is definitely an ounce of prevention is worth a pound of cure - don’t sign those things to begin with, be careful about your access to intellectual property that you don’t need to know, stay away from any muddied ownership issues, have lawyers review documents you sign before you have to fight them out, document intellectual property you or others around you developed by using public domain sources, etc… You won’t be in your current job forever and you want to be able to leave as gracefully as you can.
jlx177 Wrote: ------------------------------------------------------- > I’ve actually read cases where software companies > try to go after individuals for stealing code. For > the company to win they have to show that you took > and are using the exact same code. It’s extremely > tough actually. > > If a company went after you for using widely known > models or theories then they’re being a$$holes > just to be a$$holes. They know they’re going to > lose but don’t care as they have deeper pockets. > > To answer your question. I think you have to > defend yourself. It would be a royal pain and very > costly but what are the alternatives. You could > get a job in a field you have no experience > probably at a lower salary or stay unemployed… > which doesn’t make sense to me. I think if a > company did this every time an employee left, the > company would eventually fizzle out. I don’t care > how large or profitable it is, people wouldn’t > work there for fear that would be sued when they > left. > > These are just my opinions. The software thing is easier to fight because there is pretty favorable case law as you say. Trading models and risk management methodologies are not nearly as clear. The standards are something like 1) Gives the company an advantage in capital markets 2) Not developed from public domain sources 3) The company made solid efforts to protect it. That means that if I take some piece of garbage equity valuation model in an Excel spreadsheet, password protect it, mark secret all over the place, send out appropriate memoranda and then claim that my model is better than other models, I have an intellectual property suit against any employee who has seen the model and goes to some other place that might use it. My problems started when I went from a global macro shop to an arbitrage shop and my old boss “thought” I might be taking his stuff. In one place, we were trading Euros and S&P’s and the other place we were trading claims in Argentinian bankruptcy court and defaulted airplane leases. Didn’t stop it.