In May of 2018, Daniel Michalow, who was a Managing Director at the DE Shaw hedge fund company, was fired after making inappropriate statements to a female co-worker, and because of this situation, the business had to come up with ways to address the issue in order to try to keep its future more secure. To do this, DE Shaw used the approach of presenting its employees with non-compete agreements, which they were required to sign by the middle of September. If the employees chose not to agree to the non-compete terms, then they could opt to be terminated from their jobs and take a medium size payout, but most of them would probably want to keep their positions there, since the company is still financially stable.
DE Shaw brought out the agreements due to the fact that the group was concerned about loyalty within the company, being that after the 18-month restrictions on interference clause in his employment contract expired on September 15th, Daniel Michalow could start his own hedge fund operation and try to get his former co-workers at DE Shaw to join him. Because of the circumstances surrounding his firing, the company was especially nervous about the possibility of any of its female employees going to work with the ousted executive.
According to sources involved with the dealings of the company, the leadership at DE Shaw asked the group’s members to make a pledge of loyalty last year after the indecent incident happened with Michalow, but the company insisted that the non-compete agreements were imposed as a way to bring the corporation into line with common hedge fund industry practice. DE Shaw has its headquarters in New York, and it has more than 1,600 employees. The asset management business was founded in 1988 by Daniel Elliot Shaw.