Ex-Quant Firm Employee’s Noncompete Suit Revived in California

An employment agreement between quantitative investing firm TGS Mgmt. Co. and a former employee included confidentiality provisions that barred future work in the field and patently violated state law, making an arbitration award of more than $2 million for the company void, a California state appeals court said Tuesday.

When Richard Brown began working for TGS, which engages in a highly computerized form of equities trading known as statistical arbitrage, he signed an agreement restricting his right to compete with the company after leaving its employment, including a two-year ban on engaging in directly competitive activity and various confidentiality clauses. ...