Letter recommends targeted refinements to preserve flexibility for high-income workers and protect contractual certainty
Washington, D.C. — MFA applauded Australia’s Department of Treasury for its thoughtful and balanced proposal to reform non-compete agreements in a comment letter submitted today. The proposal enhances economic competitiveness by preserving non-competes for high earners, which will protect businesses’ intellectual property while still supporting worker mobility.
“Reasonable non-compete clauses for highly-specialised, high-income employees protect proprietary information and incentivise investment in talent,” said Jillien Flores, MFA Chief Advocacy Officer. “The Government’s proposal is a strong step toward ensuring Australia’s labour market remains competitive, innovative, and fair.”
MFA offered further recommendations to strengthen the proposal, including to:
- Exclude forfeiture-for-competition agreements from the definition of non-compete clauses. These agreements let employees compete if they are willing to give up deferred compensation. They do not restrict mobility or rely on court enforcement.
- Include bonuses and incentive-based payments in the calculation of the high-income threshold under the Fair Work Act. This would better reflect how compensation is structured in industries like asset management.
- Preserve existing non-compete clauses in contracts made before the reform’s start date to protect settled expectations and contractual reliance.
Read the full comment letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
