DE Shaw recently requested that current traders with the firm agree to non-compete terms of employment as a result of a former manager’s agreed upon poaching clause time frame expiring. Director, Daniel Michalow was fired from the firm and has gone on to create a firm and hedge fund of his own, but Michalow was not able to take any existing traders to the new firm with him- until now. Because of this clause, traders are now expected to decide which firm they want to work with going forward.
Moving to a new firm, where payouts are questionable, is risky for a trader when they are working with an established firm that has guaranteed commissions. Steady leadership is another benefit of an established firm, and project managers are always able to work comfortably when they know what is expected of them and have clear rules for managing their accounts and teams. Given the nature of the split between DE Shaw and its former employee, it remains to be seen what the work culture will be like at a new firm.
As it stands, DE Shaw is prepared to keep on any and all managers that are willing and ready to sign a non-compete form and stay on with the firm. The forms is a way for management to assess the numbers of traders that will be retained and establish any gaps that may need to be filled while protecting their interests at the firm. Until the non-compete time frame has passed, neither firm will know where it stands with traders currently employed with the DE Shaw firm.