The investment management firm DE Shaw recently informed its employees that they will be required to sign a non-compete agreement by the middle of September in order not to be terminated from their positions at the company. This agreement is being pushed a year after Daniel Michalow, one of DE Shaw’s former Managing Directors, was accused of making inappropriate sexist remarks to a female colleague, so since the company is still trying to deal with what this incident has brought on its future, this non-compete deal is seen as being their way of addressing the issue.
The company expressed that it chose to impose the agreements because they wanted to bring DE Shaw in line with the common practice of the hedge fund industry. It is suspected that the deadline date that was chosen for the agreements to be signed, which is September 16, coincides with the date Daniel Michalow was fired from the group last year, March 15. The 18-month restrictions on interference clause that was a part of his employment contract expired on September 15.
If traders at the company opt not to sign the non-compete agreements, DE Shaw is concerned that they could join up with Daniel Michalow, but if they choose to walk away from the company, they would probably only be paid an unsubstantial amount of money as opposed to the type of cash they could get by sticking with the firm. DE Shaw has over 1,600 employees, and due to the firing of one of its leading executives, certain sources have revealed that the top leaders at the company asked the group for a pledge of loyalty last year.
Because of the fallout from the Michalow sexist remarks situation, the company is nervous about its employees possibly working with him in the future, especially if that employee is a woman. The New York based business was founded in 1988 by David Elliot Shaw.