How to negotiate a contract in New York
Wall Street employees risk similar hazards to their London, Frankfurt and Paris counterparts when signing a contract of employment: it all comes down to competition, pay, and banks looking out for their best interests, which may or may not include you.
Joel Cohen, an employment lawyer at McDermott Will & Emery advises U.S .bankers to watch out for non-compete clauses and termination clauses. As in the UK, noncompete clauses are intended to prevent employees leaving to work for a competitor.
They are common on Wall Street, said Cohen: "Noncompetes usually specify that you cannot work for a particular kind of employer, in a particular role, within a particular period of time after leaving."
Cohen said U.S. noncompete clauses usually last for little more than 12 months but are not always enforced: "The trend is not to enforce them. However, they are generally enforced against senior employees who hold proprietary information."
Termination clauses are another potential contractual pitfall in the U.S. market. If a U.S. company discharges someone without cause before the end of a contract, it will usually have to pay the contract out. In turn, however, employees are obliged look for a new job: when they find one of a similar ilk the former employer can stop paying them.
Cohen said it can be possible to negotiate the absence of termination clauses: "Employees will say I want you to pay the contract out whether I get another job or not."
U.S. employees should also find out whether their contract is enforceable in a court of law or through private arbitration. Arbitration is the route preferred by employers: it is cheaper, and the media is less likely to take an interest. However, from the perspective of an employee, courts usually award larger damages than arbitrators.
Click on the following cities to see how to negotiate a contract in each: London, Frankfurt or Paris.