‘Draconian, unethical’ and ‘soul-killing’: Citi takes leaf out of Goldman’s loyalty oath playbook

First-year Citigroup analysts will be required to complete an “attestation,” aimed to “foster a fair and transparent environment,” according to a memo reviewed by Bloomberg this week. The attestation is expected to be a one-time form, but may become an annual recurrence for these analysts, Bloomberg reported. Experts tell Fortune employment disclosures for future-dated offers are ethically dubious and have potential for legislative pushback. 

Citi’s effort reflects an industry-wide crackdown on talent poaching by private-equity firms that participate in “on-cycle recruiting,” Fortune reported earlier this month.

The recruiting frenzy has junior analysts penning future-dated buy-side job offers before they complete their investment-banking training, or even before they set foot on their job sites. The practice has frustrated banks unable to retain talented workers after their initial contracts end.

Last month, JPMorgan Chase told incoming graduates they’d be fired if they accepted future jobs elsewhere before completing their first 18 months. Goldman Sachs followed, introducing quarterly loyalty oaths, where junior bankers have to disclose if they’ve taken future-dated private-equity jobs. Now, it’s Citigroup’s turn.

But, job disclosure initiatives to dissuade junior bankers from taking PE offers come with their own risks, experts tell Fortune.

“I would call [employment disclosures] draconian, unethical … soul-and-motivation-killing,” Joshua Bienstock, a labor and employment attorney and associate professor of business law at the New York Institute of Technology, told Fortune.

Bienstock said he doesn’t “see anything positive about” the employment disclosure trend in investment banking—rather, he sees the loyalty oaths as a wedge to drive top talent away from the large firms as young employees have new priorities. 

A 2024 SHRM study found Gen Z prioritizes flexible work schedules over competitive work salaries. Bienstock said employment disclosures represent an “oppressive” employer that young workers are willing to leave now more than ever.

“The brightest of the best are going to look at these large, behemoth companies and say, ‘Why do I need you, Morgan Stanley, Goldman Sachs?’” Bienstock said. “I could go to other places where maybe I’m not going to make exactly the same amount of money, but I’m not going to be in this kind of onerous situation.”

Paul Webster, managing partner at Page Executive North America, a search and recruitment firm, told Fortune previously that investment banking loyalty oaths meant to retain top talent may have an opposite effect: diminishing company loyalty and increasing a worker’s willingness to jump ship.

“It’s going to really kill employee morale,” Bienstock said.

Possible legislative pushback 

New York State attempted to pass a law in 2023 to ban non-compete agreements for all employees regardless of wage or income level before ultimately being vetoed by Gov. Kathy Hochul. Bienstock warns employment disclosures could face similar legislative scrutiny to non-competes and other restrictive covenants in a state that harbors a deep “disdain” for these measures.

In February, New York state Sen. Sean Ryan introduced a new bill that would ban non-compete agreements except for highly-compensated workers, a main sticking point for Gov. Hochul in the previous bill.

“I see the same thing happening here, that there’s going to be a really, really quick reaction, particularly [by] New York City and New York state, to creating prohibitions or limitations” on the employment disclosures, Bienstock said.