This isn’t unusual on Wall Street. It’s called gardening leave. You’re paid for the gardening leave but can’t work for a competitor during that time. The incentive is your deferred compensation is forfeit if you breach the notice period. Typically you aren’t asked to do any work for the firm you’re with - you literally just go garden for six months. This is so common that every firm on the street realizes you’ll be subject to the notice period they’re either willing to make you whole on your deferred compensation or will wait. The friction comes with tech companies that are surprised when there’s such a lengthy notice period. Likewise they’re not generally willing to make you whole on deferred compensation nor on any accrued bonus (bonuses are typically paid in January/ February, and can be a multiple of your base salary so starting a new job in June and not being paid half your years bonus means losing half your earnings).
I am surprised the NYP, the beacon of quality journalism it is, isn’t aware of this culture being based in NYC.
Is JP Morgan Chase paying during the gardening leave for a low-level tech employee? I haven't heard of that corporation doing that for non-executives. Do you have any info on that?
Yes, this is common culture among top traders, quant firms, etc. But a generic tech employee at Chase?
It’s pretty common. There’s a threshold of seniority for these sorts of clauses, but it’s usually in the VP space. The person was quoted with a $400k total compensation which puts them in the realm of gardening leave. It’s not limited to top traders or executives.
Yes you are paid, but only your base. You presumably get your bonus covered by the new place.
Source: I’ve been working at big banks for about 20 years now, as well as FAANG off and on and have enjoyed gardening leave myself many times.
Edit: note VP at a bank is a pretty mid level role, typically 10 years xp.
This is the height on insanity. If they fire tech workers do they give him or her six months of severance? All it needs is one worker to hire a good lawyer and challenge it.
What happens when you're hired if you cross out the six and write in two months notice? I've crossed stuff out before on employment agreements and it has been accepted. Usually if I remember about the company owning all your thoughts and ideas even when you're not working. Once you're almost hired as long as the request isn't unreasonable they're not wanting to go through the interview process again over something relatively minor.
Wall Street layoff packages tend to be pretty generous, and you typically get all your deferred compensation paid to you immediately. This can be a substantial amount of money as most of your take home is in a bonus, and a lot of that can be deferred up to 10 years.
They also pay you to not work during the six month gardening leave.
I’m really afraid I might explode some US-american brains remotely over the internet, but here we go: in Germany, a 3-6 month leave notice — for both sides of the work contract! — is the norm for practically every employment.
I think what is shocking about this is the imbalance of power. Though it certainly would still be shocking if JP Morgan also stated that they would require themselves to give at least 6 months notice.