MFA makes targeted recommendations to Australia’s non-compete reforms

Proposed changes would provide greater certainty for highly specialised employees and employers
Washington, D.C. — MFA supported the Australian Government’s proposed reforms to non-compete agreements in a comment letter submitted Friday. The letter recommends targeted changes so that the final legislative framework reflects how highly specialised, high-income employees in the alternative asset management industry are compensated and employed. 
“This framework ensures employee mobility while enabling firms to sensibly protect their intellectual property,” said Jillien Flores, MFA Chief Advocacy Officer. “Specialised, high-income employees often have access to sensitive proprietary information, making reasonable restraints an important safeguard. Targeted changes will provide greater certainty for employees and employers and help Australia maintain a competitive, innovative financial sector.” 
The proposal preserves the limited use of reasonable non-compete agreements for high-income employees, a welcome change from the previously-considered blanket ban. It also allows for appropriately tailored confidentiality obligations, retention arrangements, notice periods, and garden leave. These provisions protect legitimate business interests without unnecessarily restricting worker mobility. 
To further improve this framework, MFA recommended that the Australian Government: 


Count performance-based compensation toward the high-income threshold. Bonuses, deferred compensation, and other incentive-based pay should count toward the threshold, with compensation assessed over a reasonable look-back period.  




Allow reasonable co-worker non-solicitation clauses for high-income employees. Narrowly tailored clauses can protect confidential information and workforce stability without limiting employee job mobility. 




Preserve existing restraint agreements. Routine salary changes, promotions, or other employment updates should not reopen previously negotiated restraint provisions. 


Read the full letter here.  
###
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.
The post MFA makes targeted recommendations to Australia’s non-compete reforms appeared first on MFA.