FLASH BOYS, Employment Agreements, and Market Fairness

Michael Lewis’ new book on high-frequency trading, FLASH BOYS, is stunning. While free markets are based on the relatively fair flow of information between players, FLASH BOYS shows how profitable it can be to obfuscate and restrain that information.

Lewis describes one small group’s efforts to restore the fairness of information in the market. It’s a story that couldn’t happen in the traditional web of non-solicits and non-competes that decorate contracts like ornaments at Christmas. Thankfully the major actors in FLASH BOYS weren’t bound by them and worked to improve the market. Otherwise it would have been a short book - a few key people had an idea on how to restore fairness to the market but couldn’t.

These other, more common restrictions on the free flow of information within a market trouble me1. I understand and respect intellectual property but I cry foul when companies claim IP within their employees. It clearly hurts the market, but also wreaks havoc on the individuals caught up in it as well.

If a company can’t lazily leverage legalese for retention, they are forced to invest in their employees and in their culture. If each employee feels valued and empowered there is no incentive to leave the company to follow ideas and passions. Employers must make it absurd to consider leaving to compete against them. It’s a scenario where all parties benefit but it isn’t easy.

If you get the chance, FLASH BOYS is filled with insights like these and I can’t recommend it enough. A number of ideas have stuck with me from it and I continue to mull them over. You’re likely to see more of them within this space.


  1. particularly as I am currently bound by them.