What Working at the Fed Taught Me about the Integrity of Unwritten Rules

I wrote this as a letter to someone struggling with signing a non-compete, explaining the moral conflict of the discrepancy between written and unwritten rules. I share my story working at the Federal Reserve, and what I learned about picking my battles and how the world isn’t black and white.

We didn’t get to talk 1:1 but I totally related to where you’re coming from about the non-compete. The underlying concept — integrity in corporations is something very near and dear to my heart. I experienced a lot of pain coming to terms with it. I’d like to offer you part of that story. It’s a pretty long story, I totally got lost reflecting on my past. But perhaps it could offer some insight into what I’ve learned through years of pain and failure working in corporations. Feel no obligation to read the story, as it’s largely written out of a need to express myself. And I offer my silent support, whenever you need someone to just listen. I genuinely do. I’m a good listener and I enjoy doing it.

I absolutely see your concern for lack of integrity, and it’s a valid concern. As I learned from many first hand sources, during my tenure at the Federal Reserve Bank, such systemic lack of integrity between the “written” and “unwritten” rules caused the economic collapse of 2008. Yet, it’s a necessary evil. It’s a tough line to walk, but everyone must draw it somewhere if they expect to make a difference in the corporate world.

I had the same moral dilemma as you ~8 years ago, towards the beginning of my career. I just got an offer for working at the Federal Reserve Bank. I was so excited, but their contract was very dodgy. The Fed, of all places covers their ass, many times over. They have lawyers for their lawyers. Their non-compete basically said something along the lines of “Toli, once you join the Fed, we have your soul, your first born kid, and you may never work in tech again”. Well that last part, basically. I was in the same disbelief as you.

Luckily, I had a side job on doing tech support for some lawyers, so I got some free legal advice. The old head of the firm, who I kind of saw as a father figure, took the contract and after scanning it quickly told me “there’s no way they can enforce this. ignore it and take the job”. I replied something like you id “well shouldn’t they take it out, if they aren’t going to enforce it, why should they leave it in there” He just laughed, handing me back the contract saying “yeah that’s not happening, ignore it, take the job. Welcome to the real world, Toli”.

I learned a really important lesson about the corporate world that day. Integrity, especially in boilerplate contracts, is non-existent. Contracts are there for one thing — to cover their ass in case something terrible happens. There is the written law, and then there is the interpreted law. The two do not coincide whatsoever.

I like to think of these contracts as a social courtesy. When a relative stranger asks you “how are you doing” you reply “I’m fine thank you!” even if your dog just died, and your wife ran away with your best friend. However ridiculous, if you think of it, “It’s just what you do”. Nobody expects a real answer to that question, just like no one expects to enforce that non compete.

I grew up with Aspergers, so back then I didn’t get social conventions. I had a very strong and rigid integrity, and I fought for what I believed in, no matter how small. It worked through high school, but the Fed would soon beat that out of me.

Rule discrepancies are even worse inside of corporations. There is a whole unwritten rulebook of what to do and what not to do. For example, there was a policy not to use any software without an extensive review. While it was a well known fact, that most of the software we used never went through the process. And when I brought it up, they just laughed and held up their finger “shhhh”.

This lack of integrity is very dangerous indeed…it’s what led to the collapse of 2008. Auditors from the Fed would come over, be embedded into Lehman Bros. Have lunch with them, go to their kids’ baseball games. And little by little the written rules and the enforced rules diverged. Do we really have to check that document? It’s only a little discrepancy and it creates 80h of paperwork for everyone. It’s Friday at 5:00. We all wanna go back to our families. Just sign it. Jeffries, in P&L always signs it. Don’t be a stick in the mud. And the auditor thinks “ah come on it’s just a little discrepancy” and signs the audit. But you see, it adds up over time. If you signed for a $1000 discrepancy, what’s $5000, what’s $50,000, what’s $1m? Almost nobody means to break the law, they just keep making bigger and bigger exceptions. And before you know it major fraud is “just the way business is done”. And then you have the collapse of 2008, and you look back in horror at the damage you’ve caused.

We all see how this lack of integrity has dire consequences. And it’s easy in retrospect to blame the executives and auditors who committed these atrocities that cost thousands their livelihood, their homes, their families. The thousands that commited suicide, not knowing how to move on from this catastophy.

Well, let’s look at the other side of this coin. You hear of the few brave whistleblowers that made a difference. But the story that doesn’t get told is the thousands of whistleblowers that lost their jobs without anyone batting an eyelash. Many of these people’s lives were decimated. They were completely blacklisted from working in finance (an unwritten but very real practice). That’s the only skill they had, the only passion. They lost their house, their future, families were destroyed. Talk about your REAL non-compete ;) All because they tried to stand up for the right thing. And the people who blacklisted them, weren’t monsters either. You see, they had a company to run. Thousands of employees depending on their paychecks. All their friends at Goldman and WF were taking shortcuts and bending the rules. And it wasn’t about padding your pockets, it was about surviving. If you didn’t take those shortcuts, you’d be out of business. And thousands of people, depending on you would lose their jobs. What’s more important, some moral abstract moral high ground, or the livelihood of real people. It’s a no brainer.

I learned a very important lesson at the Federal Reserve. Like you, I was very by the book. One day, a coworker taped a gray square to my monitor, saying “Toli the world isn’t black and white”. Wise words, which I should’ve listened to. Another day, I got into a fight with an administrator who wouldn’t approve the dozens of requests I was sending her to “comply by the rules”. She stopped responding to my emails and I wrote an incredulous rant to her saying that it was her job to review these things, and I needed this for my project, and cited the minimum response time. She was livid, and wanted me fired. An SVP talked to her and made the situation go away, but told me “Toli you’ve got to pick your battles. Save them for when you really need something”. More wise words. Sadly, I didn’t take in either of that great advice fully while at the Fed, and finally fed up with all the inconsistency, quit.

Overall, the Fed was a terrible influence. It taught me many lessons about money, politics, and power and self worth that I needed to unlearn later on. But I did hold on to those 2 nuggets of truth, understanding their power only much later on in my career. The world isn’t black and white, and you have to pick your battles, so that you live to fight another day.

You see…to become someone who makes a difference in this corrupt system that we live in, you need to learn where to draw the line. It’s a tough skill…but if you start complaining about standard NDAs…you won’t have the clout to stand up when it really counts — where you actually can make a difference by putting your foot down.

Aaaanyways, that’s my story, hope it helps!

But on a more immediate note, one thing to consider would be to ask for a written exception when you actually find another side job. Once you’ve been working at a company a few months, you have significantly more leverage. You gain institutional knowledge…something that can’t just be replaced. So when (and if) the need arises, you can ask for that written exception to go work elsewhere. They will most likely grant it. Either way, it becomes a problem you don’t have to worry about now. A lot will change in the future, guaranteed.

I wish you luck. I know I just spewed a whole novel there, and admittedly, that was mostly out of a need for me to express myself. But I genuinely offer, if you need to vent, to talk to about these things, need someone to just listen, I’m here for you. I genuinely love supporting people, and I’ve been told I’m very good at it ;)