MFA submitted a comment letter to the Australian government in response to the Australian government’s request for information and views to inform the Competition Review’s consideration of non-compete clauses.
The letter highlights crucial details:
- MFA members’ use of non-compete clauses ensures the benefit of employees
- MFA members frequently use non-compete clauses with other contractual safeguards to protect some of their most valuable investment assets and proprietary information.
- MFA members limit the use of non-compete clauses only to employees whose departure would run the risk of exposing such proprietary information and result in competitive harm.
- Non-compete clauses limit harm to employees in the alternative asset management industry, as such employees are typically compensated during the non-compete period.
- MFA members’ use of non-compete clauses is uniquely necessary to protect intellectual property and proprietary interests
- Non-compete clauses are one of the most effective ways MFA members can protect their proprietary information, know-how, and investment strategies after their employees with access to such information leave.
- Much of the value in MFA members’ proprietary information comes from its secrecy, which makes preventative measures, particularly non-compete clauses, necessary. In the alternative asset management industry, non-compete clauses serve to reduce costs and foster new market entry and competition.
