Due to its exciting business model that combines conventional mechanisms with modern technology, DE Shaw has grown exponentially in the past two decades of its operation. Founded in 1988, the firm currently boasts of holding over $50 billion in managed assets.
But as much success as the New York-based DE Shaw enjoys by itself, and it doesn’t come without its bad press. For instance, one of the things that the company is often questioned about is the culture of secrecy that it harbors.
A recent demonstration of this approach came out when the company used a very curious scheme to get its employees to sign noncompete forms. According to information acquired by reliable sources, DE Shaw asked its employees to sign these noncompete by September 16, 2019. Those who chose not to do so had the option to take deferred compensation and part ways with the company.
But the reason behind this action is even more curious than this thinly veiled threat to employees to either pledge their loyalty or get walking. By taking a look at the recent history of DE Shaw, it is clear that this move is tied to a partner Daniel Michalow whom the company fired in March 2018.
Separated from the company on the grounds of misbehavior, Michalow’s contract to not go against DE Shaw in the business world expires on September 15, 2019. This means that if the former partner wants, he could capture talent from DE Shaw easily.
That’s why the action of DE Shaw to get its employees to sign noncompete seems too coincidental to be true. While the company denies any association between the two dates, those observing this from a neutral angle cannot shake off the feeling of a relation between them.
For now, it might be a few weeks until the whole thing becomes clear after partners stay or leave DE Shaw for other firms. But from what can be seen from here, it doesn’t look like the company has been transparent with its employees.