Non-competes and garden leave in quant finance: lengths, pay, and the law in 2026

Quant firms sell one product: an edge that decays the moment it leaks. So when someone resigns, many firms keep them out of the market for months or years, sometimes paying them to wait and sometimes not. For a candidate signing a first offer, the restrictive covenants in the contract can matter as much as the bonus. For an experienced quant, they decide when the next job can actually start.

Last reviewed 2026-10-04. This is a sourced overview and does not constitute legal advice. Every claim is labeled as official (statute, regulator or government), reported (press), or self-reported (forums), with its year. Contracts are private and vary by firm, role, seniority and office, so treat any single number as one example.

Three different things called "a non-compete"

People use one word for three separate mechanisms, and the difference decides whether you are paid:

• Notice period and garden leave. You are still employed, usually still on salary, but told to stay home. The restriction comes from the employment contract itself.
• Post-employment non-compete. Your employment has ended and a clause stops you joining a competitor for a set period. Whether you are paid depends on the contract and on local law.
• Deferred pay conditions. Deferred bonuses that you forfeit if you join a competitor before a date. No clause stops you working, but sitting out is the price of collecting money you already earned.

Most senior quant contracts combine at least two of these. Narrower clauses (non-solicitation of staff or clients, confidentiality) usually sit alongside them and are a separate question.

How long: what has actually been reported

Lengths are rarely published, so the evidence is press reports quoting headhunters or contracts, plus individual moves.

Two patterns stand out. First, lengths tend to rise with seniority and pay: eFinancialCareers, summarizing Bloomberg in August 2026, said that at Citadel "the more they earn, the longer the non-compete will be." Second, the reported quant and multi-manager terms sit well above the general UK figure of about six months, so advice written for ordinary employees can understate what a quant contract contains.

Our Citadel, Jane Street and XTX Markets guides cover interviews only, so ask about covenants directly once you hold an offer.

Paid or unpaid?

"Paid" is the most misunderstood word in this topic. The sources disagree on the details, which is itself the lesson: read the clause.

• Base salary, usually. Yahoo Finance reported in May 2024 that banks, hedge funds and money managers pay outgoing staff to sit out periods of "six months or even a year," while noting that some firms had been reducing pay during garden leave.
• Bonus, sometimes not. On Hacker News in November 2023, one commenter said quant firms had moved to notice periods where "You're paid full salary (incl bonus)," then described their own terms as "3m garden leave (paid, no bonus) and 3m non-compete (unpaid)." Another replied that in finance "you don't get your bonus when you're on garden leave. This is usually the majority of your pay." (Self-reported, 2023.)
• Deferred pay as the real lever. Bloomberg reported in January 2025 that some Citadel managers had to sit out as long as 18 months "to get their deferred compensation" back in 2020. eFinancialCareers noted the same month that payment during non-competes "usually comes with strings attached and deferrals."
• Unpaid does exist. eFinancialCareers reported one California-based firm historically tried two-year non-competes "without paying anything at all" and dropped the approach after complaints (January 2025), and that one hedge fund still attempts unpaid non-competes (August 2026).

A frequent workaround is to spend the restricted period at a firm that is not a competitor. eFinancialCareers reported quants from Citadel, Jump Trading and HRT joining OpenAI during or after their restricted periods in 2024, noting that whether a company counts as a competitor "is role dependent."

United States: federal law is out, states decide

Federal. The FTC's 2024 rule banning most non-competes never took effect. The FTC's own page says "The Noncompete Rule is not in effect and it is not enforceable": a court stopped enforcement on August 20, 2024, and the FTC moved to dismiss its appeal on September 5, 2025, in a 3-1 vote. A Federal Register notice dated February 12, 2026 removed the rule to conform to the court decisions. (Official, FTC.)

California. Business and Professions Code section 16600 voids contracts that restrain anyone from a lawful profession. Section 16600.5, added by SB 699 and effective January 1, 2024, makes a void non-compete unenforceable "regardless of where and when the contract was signed" and gives employees a private right of action with attorney's fees. Section 16600.1 required employers to notify affected staff by February 14, 2024 that such clauses were void. (Official, California Legislature.)

New York. There is still no statutory ban. Courts apply a reasonableness test from BDO Seidman v. Hirshberg (1999). Governor Hochul vetoed a broad ban on December 22, 2023. The 2025 bill S4641 never cleared the Assembly. Its successor, S9759, would ban non-competes for people under a $500,000 cash-pay threshold and, above it, cap them at one year with paid garden leave. It passed the Senate 40-21 on June 3, 2026, but the session ended without an Assembly vote. As of 2026-10-04 the Senate's bill page still shows it in the Assembly Labor Committee. (Official, NY Senate; law firm analyses from Sullivan & Cromwell and JTNY, 2026.)

Florida. Florida moved the other way. HB 1219, the CHOICE Act (chapter 2025-213), became law in July 2025 without the governor's signature. Bloomberg reported that Citadel, headquartered in Miami, backed it. Per the statute and law firm summaries, for covered employees earning more than twice the annual mean wage of the relevant Florida county:

• Non-competes and garden leave can run up to four years, and courts must preliminarily enjoin a breach unless the employee proves an exception by clear and convincing evidence.
• Garden leave must pay the same salary and benefits as the last month of work. After the first 90 days the employee does not have to work. Bloomberg noted employers are not required to pay bonuses.
• A non-compete period is reduced day for day by any non-working garden leave.
• Employers must give candidates at least 7 days to review the agreement and advise them in writing of the right to seek counsel.

eFinancialCareers reported in May 2025 that the law could reach staff of Florida-based firms working in other states, such as New York. How far it reaches remains open, for lawyers and courts to settle.

United Kingdom: reform still under discussion

Under current law in Great Britain a non-compete, like any restraint of trade, "is unenforceable, unless the employer can demonstrate it is reasonable." The government estimates around 5 million employees in Great Britain have one, with a typical duration of about 6 months. The Competition and Markets Authority found them in "over 40%" of contracts for people earning £100,000 or more. (Official, 2025.)

The timeline:

• May 2023. The previous government said it would cap non-competes at 3 months "when parliamentary time allows." No legislation followed.
• 26 November 2025. The Department for Business and Trade published a working paper with options: a statutory length limit (for example 3 months), limits by company size, an outright ban, a ban below a salary threshold, or a threshold ban combined with a 3-month cap above it.
• 18 February 2026. Responses closed. A week later the CMA backed a ban below a salary threshold with a statutory length limit above it.
• Industry reaction. Headlines in Bloomberg ("Hedge Funds Get Jittery on Prospect of UK's Non-Compete Ban," December 2025) and The Telegraph ("Hedge funds revolt over Labour's 'radical' plan to ban non-compete clauses," March 2026) show the pushback.

As of 2026-10-04, the GOV.UK page for the working paper lists no government response, and a May 2026 law firm update described the responses as "now under consideration." No new UK law limits non-competes today.

One detail matters for quants: the working paper mentions paid gardening leave only in passing, as something employers might use instead of non-competes, and none of its options are aimed at it. Any cap may therefore push London firms further toward long paid notice periods, keeping people out of the market by another route. This is an interpretation; the government has not said so.

Continental Europe: paid by law in the big markets

There is no single EU rule; each country sets its own. Two large markets show why European restrictions are rarely free for employers:

• Germany. Under the Commercial Code (HGB section 74), a post-employment non-compete must be in writing and pay at least half of the employee's last contractual remuneration for each year of restriction. Section 74a caps it at two years. (Official, German federal law.)
• France. Non-competes are governed by case law. The government's public guidance says a clause must protect a legitimate interest, be limited in time and space, and include financial compensation. Without compensation it is unenforceable, and "derisory" compensation counts as none. (Official, Service Public, 2023.)

The practical difference: in these countries a post-employment restriction usually costs the employer real money, which tends to discipline its length.

A practical checklist

Before signing, or before resigning:

1. Identify each mechanism. Notice period, garden leave, post-employment non-compete, deferred-pay forfeiture. Write down the length of each and whether they run back to back.
2. Pin down the pay. Base only, or bonus too? Benefits? Is any of it deferred and conditional?
3. Read the competitor definition. Is it every trading firm, or named firms and asset classes? Role-dependent definitions are what made the OpenAI moves possible.
4. Check the governing law and your place of work. California, New York, Florida, England, Germany and France produce very different answers for the same clause.
5. Negotiate before you sign. Terms are easiest to change before you join. eFinancialCareers' August 2026 guide to hedge fund contracts reported that one fund attempting unpaid non-competes "regularly allows people to negotiate their way out."
6. Plan the gap. A forum commenter noted visa holders can face complications with long periods off work (self-reported, 2022). Check immigration status before you resign.
7. Leave everything behind. No non-compete does not mean no lawsuit. eFinancialCareers noted in April 2024 that firms without non-competes can still rely on trade secret law, and code, data or research notes taken on the way out are the classic trigger.
8. Get advice where you work. An employment lawyer in the relevant jurisdiction is worth the fee for any restriction longer than a few months.

If a long garden leave is coming, it is also a sensible time to rebuild interview sharpness before the next round: the problem bank and mock interviews are designed for exactly that.

Sources, confidence, and corrections

This article is general information and does not constitute legal or tax advice. Laws change and contracts differ; consult a qualified lawyer about your own situation. QuantReady is an independent prep platform and is not affiliated with, endorsed by, or sponsored by any firm named here. All trademarks belong to their respective owners. If something here is out of date or wrong, tell us via /contact.

QuantReady is an independent prep platform and is not affiliated with, endorsed by, or sponsored by any firm we write about. All company names and trademarks belong to their respective owners. Read how we source our content.