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Wall Street's Non-Compete Dilemma, Navigating the Clawback Conundrum – Weekly IB Recruiting Brief

Meridith Fiedler Dennes

Talent Acquisition (Lateral Hires) | Investment Banking | Private Equity | Corporate Development | Training & Development

发布日期: 2024年4月30日

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“Most people will choose unhappiness over uncertainty.” – Tim Ferriss, Four-Hour Work Week

Good Afternoon,

If you are a hiring manager and would like to chat about how PRP can help fill an open role please contact me at [email protected].
Attention all 2025 and extraordinary 2026?graduates, Prospect Rock Partners is excited to offer an 7-week Sales & Recruiting Summer internship! We are looking for eager college students who are passionate about exploring the world of investment banking staffing and recruiting. (Apply Here)
The proposed FTC rule to ban non-compete clauses for workers is causing major concerns on Wall Street, as these clauses have been commonly used to protect proprietary information when employees leave firms.

The rule appears to outlaw the typical use of "gardening leave" periods where departing employees are paid but sidelined for a period. Lawyers think firms may try to restructure contracts with extended notice periods instead.
While there is an exception for "senior executives," it is only retroactive. New non-compete agreements would be prohibited at any level.
The rule may also prevent cancellation of unvested bonuses if an employee leaves, making it easier for smaller firms to hire talent away.
Firms will likely have to get more creative with confidentiality and non-solicitation agreements still allowed.
While the FTC was careful to say that it was not prohibiting non-competes in the context of a sale transaction, it also emphasized that clawback arrangements for deferred compensation would not be permitted and that it would look beyond the mere form of the arrangement to determine legality.
Overall, the rule could force Wall Street to improve pay/working conditions rather than relying on non-competes to retain talent.
There are predictions the rule could lead to more lawsuits alleging theft of trade secrets by departing employees.

RECRUITING UPDATE

A good recruiter can make all the difference in a bad market. I have never been more high touch/hands on with candidates than I have been in the past month. This market is tricky and I have spent a ton of time strategizing with folks in process on how best to approach interviews effectively. Be careful/selective with who you choose to work with.

As May approaches, Wall Street's focus is shifting from lateral hires to the incoming summer analyst and associate classes. This seasonal transition comes amid a surge in deal activity. The result? Summer rookies should plan to be thrown into the deep end from day one.

But firms aren't just eyeing the summer pipeline for reinforcements. With demand high and staffing tight, some banks are accelerating hiring timelines, extending offers before the summer cohorts arrive. The pressure is on to bring in capable hands as soon as possible. Yet securing one of these coveted roles remains an intense uphill battle. Technical interviews are as rigorous as ever. Closed deal experience and minimal employment gaps under 3-4 months are must-haves.

For those on the beach, don't hold your breath for the perfect offer. Stay flexible on title and brand. If you've been on the sidelines over 6-months, cast a wide net. Lack deal credentials? Adjust title expectations and explore exits. Recently denied a promotion? Don't expect a level-jump elsewhere.?

The name of the game is resourcefulness and pragmatism. With banks laser-focused on shoring up deal teams, candidates must shed any sense of entitlement. The luxury of selective job hunting is off the table. It's a grind out there, but ones with grit and a willingness to compromise will survive this summer's hiring gauntlet.

ONE-ON-ONE COACHING

We are currently offering customized one-on-one coaching sessions focused on targeted support, including:

Resume & Narrative Support
Company Targeting and Advanced Networking Strategies
Interview Preparation
Financial Modeling and Technical Interview Support
Breaking into Investment Banking/Private Equity
Securing a Summer Internship
Negotiating a Raise/Offer
Customized Tailored Sessions

Our individualized approach and real-world expertise equip you with the confidence and skills to succeed in any upcoming banking or private equity assessment.

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RESOURCE CENTER

FTC’s Noncompete Ban Shakes Up Wall Street

For decades, noncompete agreements have been a standard tool used by Wall Street firms to retain top talent and protect proprietary information. But those restrictive employment contracts are about to become a relic of the past under a new federal rule.

Last week, the Federal Trade Commission issued a sweeping ban on noncompete clauses nationwide, ending the widespread practice of forcing workers to choose between staying with their current employer or switching careers entirely.

The Ultimate Guide to Weeding Out Bad Investment Banking Recruiters

When it comes to a successful job search, having a great investment banking recruiter in your corner can truly make or break the entire experience. The difference between an average recruiter and a truly exceptional one is massive.

The best recruiters don’t just go through the motions. They think about hiring in a fundamentally different way. Their approach is shaped by key attributes and mindsets that allow them to consistently identify and attract top talent. Most importantly, great recruiters typically have some background and a deep understanding of the industry they are hiring for.

HOT JOBS 4/30

Please PM me on linkedin or shoot me an email if you want to learn more about a specific role. Must have at least 1-year prior IB M&A experience. Visas (H1Bs, Stem, L1s, TNs) are tough in this market. No Recent Grads. Lateral hires only.

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