Richard Rabin Participates in Q&A with The Hedge Fund Law Report on Options for Hedge Fund Managers When Assessing Non-Compete Clauses
Richard Rabin, a partner in the labor and employment practice at Akin Gump, was featured in the article “Steps Hedge Fund Managers Can Take in Light of NY Attorney General’s View That Certain Non-Compete Clauses Are Unconscionable,” which was published in The Hedge Fund Law Report. The article analyzes the impact on investment management firms of a recent settlement between New York Attorney General Eric Schneiderman and two companies regarding their use of non-compete provisions in employment agreements.
Rabin discussed the scope and impact of the attorney general’s activities with respect to non-compete clauses, noting that while the two cases reported to this point involved lower-wage workers, one of the settlements still permitted non-competes for various employees—thus indicating a belief that the provisions could “serve a legitimate purpose.” He then talked about the aspects of non-compete clauses that were not being challenged by Schneiderman, including when they are necessary to protect confidential information.
The article included a discussion of potential challenges to other restrictive covenants, such as non-solicit provisions. Rabin also talked about strategies for hedge fund managers to consider when including a non-compete provision in an employment agreement and the reasons for the recent stepped-up scrutiny. Finally, Rabin compared the developments in New York with those in other states that have strong hedge fund communities.