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CA Vs. MA In Battle Over Non-Compete Clause

kdawson posted more than 5 years ago | from the so-free-you-can-choose-bondage dept.

The Courts 248

Lucas123 writes "A case was filed with superior courts in California and Massachusetts involving a former EMC top executive who is trying work for HP. The case is throwing into relief Massachusetts's and California's differing approaches to non-compete clauses in employment contracts. California courts have argued that non-competes hamper a person's ability to traverse the marketplace freely for work, while Massachusetts courts say the agreements actually afford freedom to develop technology without the fear of IP theft."

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248 comments

non competes only make sense when... (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27839221)

you have someone who made enough money not to have to work again during the non compete period- otherwise what the hell are you supposed to do, work at burger king?

Re:non competes only make sense when... (4, Funny)

BGrif (1190941) | more than 5 years ago | (#27839305)

otherwise what the hell are you supposed to do, work at burger king?

I hear Burger King has really strict IP rules around the secret to why "The King" is so creepy.

Re:non competes only make sense when... (5, Insightful)

Hatta (162192) | more than 5 years ago | (#27839405)

Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.

Re:non competes only make sense when... (1)

evilbessie (873633) | more than 5 years ago | (#27839495)

This is legal, you just specify the notice period, and you can either stipulate in the contract or just do it later to force this to be leave, and include a non-compete whilst an employee. Because only when you pay me do you get to tell me what to do.

Re:non competes only make sense when... (4, Informative)

b4upoo (166390) | more than 5 years ago | (#27839545)

Florida pretty much does what you state. Generally the non compete clauses only hold water as long as the person remains employed. I do not know how a large lay off payment would effect this practice.
            The general idea being that a contract must continue to benefit both parties. When the employee is no longer paid the no compete is dead.

Re:non competes only make sense when... (4, Funny)

brian_tanner (1022773) | more than 5 years ago | (#27839561)

Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.

Sounds good, but it sets up the following far too easily:
1) Get hired by a company that has juicy IP
2) Sign a non-compete with "keep getting paid" clause
3) Quit
4) ???? (here the ??? means do whatever you want)
4) PROFIT!

PS: I don't support non-competes. I just always wanted an excuse to post a .... PROFIT! post on /.

Re:non competes only make sense when... (4, Interesting)

Abcd1234 (188840) | more than 5 years ago | (#27839701)

Uhuh. Or, alternatively, the company could hire lawyers who aren't complete morons, and they write up a contract which includes two termination options for the employer:

a) Termination with non-compete, including continued pay for the duration, or
b) Termination without non-compete

If the company believes you possess knowledge that would be truly beneficial to their competitors, they can go with option a. For your mythical con-man, he gets option b.

Re:non competes only make sense when... (1)

Skapare (16644) | more than 5 years ago | (#27840171)

No ... get paid the lesser of the current pay at the current company or the new pay at the new company based on its offer. The offering company would be obligated to pay that rate if the current company decided to not enforce the non-compete.

Re:non competes only make sense when... (3, Interesting)

Lord Ender (156273) | more than 5 years ago | (#27839697)

Well as a tech worker, I certainly do not want to work in a state where I can be sued for switching jobs! Driving away developers certainly isn't going to help Massachusetts foster technological development.

Your solution does seem to be the best of both worlds.

Re:non competes only make sense when... (5, Insightful)

chriso11 (254041) | more than 5 years ago | (#27839875)

Well, given how Silicon Valley is vastly more important than Boston (which used to have parity), you can see which approach is more useful for technological advancement.

Re:non competes only make sense when... (4, Funny)

jgtg32a (1173373) | more than 5 years ago | (#27839721)

That sounds like an intelligent solution, it'll never work.

Re:non competes only make sense when... (1)

Timmy D Programmer (704067) | more than 5 years ago | (#27839729)

I agree so long as its only when the first company is trying to enforce it. And only for as long as they choose to enforce it up to the term of the non-compete.

Re:non competes only make sense when... (1)

DragonWriter (970822) | more than 5 years ago | (#27839943)

Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.

That's actually already legal everywhere, I'm pretty sure; I don't think anyplace (at least, any US jurisdiction) outlaws non-compete terms in employment contracts that only apply while you are employed, which is what that amounts to.

Still a problem... (2, Interesting)

spiffmastercow (1001386) | more than 5 years ago | (#27840231)

That sounds great in theory.. Problem is, the non-compete still forces you to avoid any job that could in any way compete with the company you work for (which is to say, anything involving your skillset). So they can continue to pay you incredibly low wages to keep you from working for anyone else, even if you quit. This keeps you from looking for a better job, and in some cases would prevent you from getting a job after you're laid off (though you would at least get some amount of money for continuing the non-compete).

Re:non competes only make sense when... (5, Interesting)

_avs_007 (459738) | more than 5 years ago | (#27839737)

My wife went through a law suit a few years ago for this... The Non-compete was eventually deemed unenforceable.

Basically what they determined, is that the basis of a non-compete, is that the employee would be bringing something of value (which was obtained from the first employer) to a second employer, putting the first employer at a disadvantage...

However, since my wife was laid off, it was determined that by laying her off, the first employer essentially deemed that she was no longer of any value to the company... Therefore, since her status was classified as not having any value to first employer, her employment by second employer does not place the first company at a disadvantage, because they already deemed her services as being not valuable to them.

So basically that means, if you leave on your own accord, it may be enforceable.. But if you are fired or laid off, you cannot be held to a non-compete (In the state of Washington anyways), because by terminating your employment against your will, the company is admitting that you no longer possess anything of value to the company.

Re:non competes only make sense when... (2, Interesting)

Alien Being (18488) | more than 5 years ago | (#27840319)

I'm not trying to form an opinion about who was right in your wife's case, but wow, that's a really bogus interpretation of why a company would lay someone off.

Taking the employers pov...

Just because I don't have enough money to continue doing R&D, doesn't mean that my engineers don't possess valuable information that I already paid for and that is rightly my trade secret.

That being said...

Non-compete contracts are usually written in such an overly-broad manner that I consider them to be garbage. If a company has a legitimate cause of action against a former employee transferring proprietary info, then let them make the case and be subject to a penalty if they lose.

Re:non competes only make sense when... (1)

pleappleappleap (1182301) | more than 5 years ago | (#27839835)

The guy in this case made enough money to not have to work...

You can't compete (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27839223)

You cannot compete with a good goatse [goatse.fr] . A good live goatse, right in their faces, will show those fuckers.

Hey (4, Informative)

ta bu shi da yu (687699) | more than 5 years ago | (#27839229)

In Australia, non-compete clauses are classed as restraint of trade, and thus illegal. Sucked in ex-EMC executive!

Re:Hey (4, Insightful)

evilbessie (873633) | more than 5 years ago | (#27839445)

However if a company wanted you to take 6 months paid leave before you could leave I have no problem. But once you stop paying me you stop telling me what to do, that's mostly the way employment works.

Maybe they're both right (0)

Anonymous Coward | more than 5 years ago | (#27839233)

But which is more important? Or actually: which state really has jurisdiction in this case?

Re:Maybe they're both right (2, Informative)

rackserverdeals (1503561) | more than 5 years ago | (#27839269)

But which is more important? Or actually: which state really has jurisdiction in this case?

Probably the State in which the contract was executed or otherwise specified in the contract.

Re:Maybe they're both right (1)

morgan_greywolf (835522) | more than 5 years ago | (#27839367)

But which is more important?

I'm almost always in favor of more open markets over regulation and control, so, IMHO, non-competes are stupid and a restraint of fair trade. In addition,
"IP theft" can be dealt with in other ways, since that's what courts are for.

Or actually: which state really has jurisdiction in this case?

Since I'm not a lawyer, I can't really answer this part with any real authority, but most likely it depends what companies have a presence where, if there were any jurisdiction clauses in EMC's employment agreement, etc..

Re:Maybe they're both right (4, Insightful)

Xtifr (1323) | more than 5 years ago | (#27839607)

I'm almost always in favor of more open markets over regulation and control, so, IMHO, non-competes are stupid and a restraint of fair trade.

Sounds a little self-contradictory there. The non-compete was not part of "regulation and control"; it was part of a contract negotiated supposedly in good faith by both parties in an open employment market. If you think non-compete's are a restraint of fair trade, then I suppose your head asplode, because it's the regulations that forbid them and nothing else. Only government regulation is supporting fair trade here, not the open market.

Of course, those of us who aren't ideological fanatics and who realize that governments of the people are the only thing standing between us and outright slavery by corporate/military/religious/political overlords aren't a bit surprised. Governments that are too big or too small both lead to slavery, and finding a reasonable balance in between is almost impossible, which is why the phrase 'Situation Normal, All F***ed Up' was coined. :)

Re:Maybe they're both right (0)

Anonymous Coward | more than 5 years ago | (#27839763)

You're an idiot.

Re:Maybe they're both right (1)

pleappleappleap (1182301) | more than 5 years ago | (#27839869)

Pot
{
        Kettle.black();
}

Re:Maybe they're both right (1)

geekoid (135745) | more than 5 years ago | (#27839919)

"..., those of us who aren't ideological fanatics and who realize that governments of the people are the only thing standing between us and outright slavery by corporate/military/religious/political overlords aren't a bit surprised."

wow. actually believing that MAKES you a fanatic.

Non-compete are bad becasue when implemented in a state it become impossible to find work without signing one. So no, there isn't any free market or fair trade when forced to sign one.

Forced by practicality might be better.

When non-compete where enforced in CA, it was basically impossible to switch jobs. So no pay raises, bad working conditions. What are you going to do? leave and not work for 3 years?

Re:Maybe they're both right (1)

Geoffrey.landis (926948) | more than 5 years ago | (#27840085)

I'm almost always in favor of more open markets over regulation and control,

Since non-compete clauses are contracts voluntarily signed, then, you're in favor of enforcing them, right?

So, IMHO, non-competes are stupid and a restraint of fair trade.

Well, sure. But are you in favor of regulation prohibiting stupidity? Are you in favor of regulations enforcing fair trade?

Which is more important to you?

Re:Maybe they're both right (1)

broen (1197939) | more than 5 years ago | (#27840097)

I'm almost always in favor of more open markets over regulation and control, so, IMHO, non-competes are stupid and a restraint of fair trade. In addition, "IP theft" can be dealt with in other ways, since that's what courts are for.

I was thinking along the same lines. In this case, it seems like less regulation by government actually causes a reduction in freedom of employment. Seems a bit contradictory -- I'd like to hear someone well versed in Austrian economics to help work it out.

Firstly, I would say that the company implementing non-compete clauses would immediately have to increase salaries -- since each employee would doubtless prefer to work without, and given two equivalent positions always choose the non-competeless (competeful?) job. Secondly, in the long term a non-compete clause would create a reduction in labor available to a sector (as the employee is forced to work another area), which if it happened enough would lower the supply of labor and increase all salaries. Of course, this cost would be borne by an entire industry.

Anybody else with a libertarien/free market approach?

California is right (5, Insightful)

Anonymous Coward | more than 5 years ago | (#27839451)

Ask yourself this: which state has Silicon Valley? Which state is home to the vast majority of tech companies?

And which state is known for overreacting to animated LED characters by deciding they're bombs and evacuating the state capital over them?

By the way, this has already been answered in a previous Slashdot article. Someone has done the research: California's lack of non-compete agreements helped them become a center of technology in the US. Massachusetts' non-compete agreements helped ensure that no tech company prospered there. (The only company I can think of that was based in Massachusetts is Digital, and they died what, over a decade ago?)

Re:California is right (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27839563)

Ask yourself this: Are you retarded? Do you know how to use Google?

Regardless of the stupidity of this non-compete issue, Massachusetts one of the largest, most innovative and vibrant tech communities in the world.

Re:California is right (2, Insightful)

Grishnakh (216268) | more than 5 years ago | (#27839637)

Everyone here knows lots of tech companies that are located in Silicon Valley and elsewhere. As for Massachusetts, can you please list some? Other than perhaps EMC, I can't really think of any offhand. And no, MIT doesn't count, since it's a school.

Maybe you're the retarded one, since you like to throw terms like that around.

Re:California is right (4, Informative)

acomj (20611) | more than 5 years ago | (#27839755)

Lots of companies. Although since the PC beat the mainframe there are fewer computer companies.

We have large offices for Raytheon, Parametrics, Solidworks, Comverse, Sigmatel, ..... uswusf.

All the major "California" companies have large offices here in MA too:
Sun/Oracle
Microsoft
Lotus/IBM
Hp
Symantec
Akami

In cambridge/boston its more Biotech (Amgen Novartus, pfizer )etc...

google is your friend

Re:California is right (1)

Grishnakh (216268) | more than 5 years ago | (#27839837)

I wouldn't call Raytheon a "tech company". Defense contractors aren't like normal companies in any way.

Re:California is right (1)

Anonymous Coward | more than 5 years ago | (#27840067)

Defense contractors aren't like normal companies in any way.

Yes and no. The behemoths suck. However, there is no shortage of interesting tech going on that, by design, people will not know about for several years.

Re:California is right (1)

Grishnakh (216268) | more than 5 years ago | (#27840117)

That's true, but that stuff is usually done in very small companies that you'll never hear about. The behemoths simply aren't able to do anything innovative because of their internal structure.

Re:California is right (0)

Anonymous Coward | more than 5 years ago | (#27840327)

Agreed. That was part of my point. MA has loads of those kinds of little companies that no one ever heard of so it would make no sense to mention them but they add up and their significance is felt. An important one, though not so small, which you ruled out because of its affiliation with MIT, is Lincoln Labs. It does a ton of defense related projects.

Re:California is right (1)

pleappleappleap (1182301) | more than 5 years ago | (#27839931)

Let's not forget that DEC was a Massachusetts company. So was DG. So was Lotus. So is BBN. So are many other MIT-spawned entities.

Re:California is right (0)

Anonymous Coward | more than 5 years ago | (#27839885)

I throw the term retarded around when it is deserved, namely someone who should know better not using their brain.

Off the top of my head Akamai, Raytheon, Biogen, iRobot, Varian Semiconductor.

Re:California is right (1)

fuzzyfuzzyfungus (1223518) | more than 5 years ago | (#27839581)

It isn't as notable as Silicon Valley, to be sure; but MA actually does fairly well for itself (particularly per capita). "Route 128 [wikipedia.org] has some decent tech activity, as does the cluster of startups and research operations and things in and around Cambridge. Biotech is big as well.

Now, none of this means that I think "non-compete"s are anything other than a flaming pile of fail (They strike me as a textbook case of how the "freedom" to make certain sorts of binding contracts can sometimes result in substantially less free outcomes, in both the free-as-in-human-agency and the free-as-in-efficient-market senses). While they are bad, they haven't reduced us to producing nothing but salt cod and puritanism.

And about the whole LED thing; official response was hysterical, public response was sensible enough(ie. there wasn't one until the cops decided to be dickheads about the whole thing).

Re:California is right (1)

Chabo (880571) | more than 5 years ago | (#27839669)

Plenty of companies have branch offices, but EMC is one of the only ones I can think of with headquarters in Mass, along with Raytheon.

Branch offices in Mass that I can name off the top of my head: Sun, Intel, BAE, Cisco, Broadcom, Nvidia.

Re:California is right (0)

Anonymous Coward | more than 5 years ago | (#27839709)

They are more than "branch offices", which sounds like 4 guys handing out leaflets and going on sales calls. More like entire divisions.

Re:California is right (1)

gringofrijolero (1489395) | more than 5 years ago | (#27839967)

Yeah, but Massachusetts has MIT, and that other place?

Why compete? (-1, Troll)

cthulu_mt (1124113) | more than 5 years ago | (#27839285)

In socialist countries no one competes. The People's Republics of Taxaschusett and Kalifornia must be confused.

Do get the names right (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#27839317)

Do get the names right: it's "The Peoples Republic of Mexifornication" and "Mass-of-stupids".

Re:Why compete? (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27839325)

Ass!!! FUCKFUCK! Ass fuck bitch cunt ass fuck.

Re:Why compete? (0)

Anonymous Coward | more than 5 years ago | (#27839753)

Ass!!! FUCKFUCK! Ass fuck bitch cunt ass fuck.

In regards to non-compete clauses, my thoughts exactly.

Re:Why compete? (3, Interesting)

i.of.the.storm (907783) | more than 5 years ago | (#27839479)

Hehe, you keep on whining about socialism, we'll keep on educating the best minds in the world at the best universities in the world. Between California and Massachusetts, I think we've got the top engineering universities in MIT, Berkeley, Stanford, and Caltech, not to mention some school called Harvard in Mass which I hear is pretty good. Unless this was some sort of crazy sarcasm, but if it is it sucks.

Re:Why compete? (1)

Ogive17 (691899) | more than 5 years ago | (#27839595)

While I agree those are very prestigious schools, how is it relevant? Those schools predate the recent "omg socialism" trend.

Re:Why compete? (2, Informative)

Grishnakh (216268) | more than 5 years ago | (#27839713)

How on earth do schools have anything to do with socialism? Let me clue you in: schools are where people go to learn and get degrees. Companies are where people go to work after they get out of school. In the USA, in the tech sector, these places are rarely in the same places; instead, they're usually on opposite sides of the country. There's lots of great tech schools in places like Georgia, South Carolina, North Carolina, southwest Virginia, Cleveland Ohio, upstate NY, etc. How many big-name tech companies are located in these places? Approx. zero.

I went to school at Virginia Tech. Good school, but there weren't exactly a lot of jobs nearby. Most engineering students left the state as soon as they graduated. The state and local governments complained about it all the time, even trying to set up and promote some stupid "Virginia Technology Corridor" in the southwest for a while. It was funny driving along some rural road and seeing a sign proclaiming "Now entering Virginia's Technology Corridor" and seeing falling-apart trailer homes scattered around. I believe they finally gave up, after they realized that making up a silly name wasn't going to magically attract tech companies to backwoods Virginia. (For those unfamiliar with Virginia geography, this was in the southwest, about 6 hours' drive from Northern Virginia where there actually are some tech companies, especially ones that work with the government.)

Just because some place has great schools doesn't mean that students are going to stick around when they finish. They're going to go where the money and jobs are.

Re:Why compete? (1)

Courageous (228506) | more than 5 years ago | (#27839785)

State ownership of schools is by definition socialism (to wit: the public ownership of the means of production, in this case the production of educational services). State funding of private schools is something in the middle: kinda, not quite, almost, socialism. I suppose socialism is a bit of a bad word; that's somewhat here, and not quite there. :-)

C//

Re:Why compete? (2, Insightful)

Grishnakh (216268) | more than 5 years ago | (#27839867)

In that case, it appears socialism isn't working out too well for the east-coast states, since they're investing a lot of money into education, only to have all their graduates flee after they graduate.

Re:Why compete? (0, Flamebait)

pleappleappleap (1182301) | more than 5 years ago | (#27839969)

Upstate New York has a teeny weeny tech company called IBM.

Re:Why compete? (1)

californication (1145791) | more than 5 years ago | (#27839651)

Yes, these states should have a free market instead! And by free market, I mean a market where the only regulating done is by the private sector, I don't actually mean it's free from regulation. It's perfectly ok to regulate away competition, as long as its the private sector doing it.

IP (5, Funny)

Gat0r30y (957941) | more than 5 years ago | (#27839297)

It seems IP doesn't only belong to the company- but also at least to some degree to the person who actually developed said IP. As it is located in his/her intellect and it is sort of difficult to remove without destroying it.
Not that this argument about IP works in the first place - this guy is an executive.

Re:IP (1)

tomhudson (43916) | more than 5 years ago | (#27839351)

But there's no reason you have to use the knowledge you gained at your former employer. After all, if they're your FORMER employer, chances are good that there are at least a few thing you'd do differently, given the chance. Why would you want to repeat what you consider mistakes?

Re:IP (0, Flamebait)

dissy (172727) | more than 5 years ago | (#27839537)

But there's no reason you have to use the knowledge you gained at your former employer. After all, if they're your FORMER employer, chances are good that there are at least a few thing you'd do differently, given the chance. Why would you want to repeat what you consider mistakes?

If I at my last job learned MySQL. There is nothing in your argument above that follows my FORMER employer owns all that is IP regarding MySQL, nor can you convince me learning MySQL is a mistake.

At my current job I had to learn MSsql (Yea, I know), and if/when I leave there, you still won't be able to convince me that company owns all that is IP about MSSQL.

Anything specific to the company is fine. Sadly almost none of those contracts are worded that way.

My contract was worded with my past employer as so they own PHP, and Linux 2.6, oh and active directory. I learned all of those things while employed there. And this is OK with you? You consider learning those things a mistake? (Minding I already admitted learning MSSQL was)

You should be careful before defending something you clearly don't grasp the full ramifications of.

Re:IP (2, Interesting)

tomhudson (43916) | more than 5 years ago | (#27840021)

Since your former employer (unless they're SUN) doesn't own the IP to MySQL, it's not an issue. They can't claim ownership of your knowledge of MySQL since MySQL is already owned - by someone else - and the license that governs ownership of that knowledge is the license between YOU and MySQL (the gpl) unless your former boss had a separate agreement with MySQL that granted THEM ownership rights, which I seriously doubt, seeing as SUN bought them. Ditto for your other examples. What they DO own is the proprietary business methods, data structures, and implementations that you developed, the customer lists, etc.

They don't own general knowledge, such as how to write a query or design a database. They do own their implementation of a database, and the queries used to manipulate the data, to the extent that the database and queries are not part of generally accepted practices or obvious.

So, back to my point, using your statements as a jumping-off point. If you're going to re-implement something, you probably wouldn't want to do it the same as at a former employer, since you have a chance to do it better, avoid the mistakes you think they made, and you're probably doing it with a different set of design goals and customers (internal and/or external) in mind.

Copying their IP wouldn't just be wrong, it would be stupid and counter-productive.

Re:IP (1)

The Grim Reefer2 (1195989) | more than 5 years ago | (#27839443)

Not that this argument about IP works in the first place - this guy is an executive.

That was my thought when I read the summary too. He's a "top executive" at that. So the only IP he may have are the new buzz words EMC is planning to use in their next marketing campaign.

Re:IP (3, Funny)

BGrif (1190941) | more than 5 years ago | (#27839497)

Can someone tell me how people can use IP freely?

You know someone was going to do it!

Re:IP (1)

barzok (26681) | more than 5 years ago | (#27840251)

Not that this argument about IP works in the first place - this guy is an executive.

"Top executives" move around various companies in the same industry constantly. It's the good ol' boys club. When I worked at an insurance company, they brought in a new CIO from another insurance company to do a "slash & burn" job on the IS department - same thing he'd been hired by the previous company to do, and probably at least one company before that.

AC Vs. MAlda In Battle Over Non-First-Post Clause (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27839319)

Lucas123 writes

"A case was filed with superior courts in Christmas Island and Michigan involving a former AC top poster who is trying work for HP. The case is throwing into relief Michigan's and Christmas Island's differing approaches to non-first-post clauses in TOS's. Christmas Island courts have argued that non-first-posts hamper a person's ability to freely drop their pants and spread their anii for the camera, while Michigan courts say the agreements actually afford freedom to attempt first posts without the fear of a goatse redirect."

This question will be best settled in (0)

Anonymous Coward | more than 5 years ago | (#27839345)

Thunderdome!

Both arguments make sense (3, Interesting)

techno-vampire (666512) | more than 5 years ago | (#27839373)

To some extent, both positions are right. To me, the problem is in how broadly do you define competitor. As an example, let's say I was doing graphics work for an MMORG. Clearly, working for a different MMORG would be working for a competitor. Working on CGI for an animated feature wouldn't be, at least to me. Would working for a different company bringing out a first person shooter, or turn based strategy game be working for a competitor? Personally, I wouldn't think so, but again, that could be argued either way.

Re:Both arguments make sense (5, Insightful)

evilbessie (873633) | more than 5 years ago | (#27839469)

No. Once you stop paying me you don't have any right to tell me what to do. You don't want me to join a competing company for say a year, you can damn well pay me for a year to sit on my ass. I'm fairly sure that they are not allowed in the UK anyway, so I'm fine.

Re:Both arguments make sense (0)

Anonymous Coward | more than 5 years ago | (#27839733)

No, you don't get it. They're paying you NOW with one of the conditions being that you don't work for a competitor in a year. Also, there is no law requiring contracts to be logical, so I can, for example, agree not to paint my house red for 5 years in exchange for $1000.

Re:Both arguments make sense (0)

Anonymous Coward | more than 5 years ago | (#27839825)

Isn't it arguable that you've already been paid? Theoretically, if you didn't accepted the non-compete, you would have been offered a lower salary...

Further, although generally void as contrary to public policy, non-competes can be justified provided it is reasonable both as between the contracting parties and in the interests of the public.

Re:Both arguments make sense (1)

codegen (103601) | more than 5 years ago | (#27840239)

If they are not allowed in the UK, then why is one of the running jokes in the Alex comic (Alex Masterly) about gardening leave? If I understand the context right it is about non-competes, although in the 6 month to 1 year range.

Re:Both arguments make sense (0)

Anonymous Coward | more than 5 years ago | (#27840273)

Unless, of course, that was a condition of employment, in which case you were already paid for that. Which, dumbfuck, it is in states which allow non-compete clauses.

Re:Both arguments make sense (1)

archgoon (894518) | more than 5 years ago | (#27839499)

>>As an example, let's say I was doing graphics work for an MMORG. Clearly, working for a different MMORG would be working for a competitor Really? So World of Warcraft competes with Puzzle Pirates? Or the Kingdom of Loathing? I'd also argue that it's even debatable that WoW is in the same market as EVE Online.

Re:Both arguments make sense (1)

mpthompson (457482) | more than 5 years ago | (#27839505)

I agree that to a certain extent both positions are right, but I differ on the reasons.

Presumably, the executive was compensated (probably very well compensated) in exchange for his agreeing to not work for a competitor. With that in mind "a contract is a contract". If he didn't want to work under those conditions he should have simply refused to sign the non-compete agreement and let the chips fall where they may. No fair signing the contract, taking the money and then crying about it later when you are expected to live up to the contract.

On the other hand, companies are so willing to throw employees under the bus today that it is ridiculous to think they can interfere with you taking another job by claiming "IP" issues.

Re:Both arguments make sense (3, Informative)

AK Marc (707885) | more than 5 years ago | (#27840161)

No fair signing the contract, taking the money and then crying about it later when you are expected to live up to the contract.

In CA, they put non competes in contracts all the time, even though they are essentially illegal (and anyone writing them in CA knows that). You can force "non compete" in that someone may not take something owned by the previous company, like a product or such, and use that at the new company for a competitive advantage. An illegal contract does not need to be honored. You can't sign yourself into indentured servitude. And a contract that specifies you can't work in the field you are most qualified in is not much different. That the companies like to have them to badger former employees with illegal contracts is all find and dandy. But in some areas, you aren't given a choice. You sign, or you starve (figuratively). So, you sign and expect the illegal contract to not be enforced.

On the other hand, companies are so willing to throw employees under the bus today that it is ridiculous to think they can interfere with you taking another job by claiming "IP" issues.

The company isn't claiming IP. MA is. MA claims that forced unemployment is ok because the risk that someone might accidentally share info with a competitor is too high. CA says that forced unemployment is illegal regardless of contract, just like indentured servitude is.

Re:Both arguments make sense (1)

geekoid (135745) | more than 5 years ago | (#27839863)

Nope. A person should be able to work for whom they please and not be tied to a company while not getting paid.

First, it's graphics work, so it will need to fit the style of the MMORPG. So it's going to be different by it's nature. Your not going to take your WoW animatin and stuff it into age of Conan.

This is just used to make people afraid to look into the job market and feel trapped. If someon does leave it's used to extract punishment.

Yeah, if you want someone to sit for a period then offer them some money not to work. Of course, this would be more expensive then the normal salary since someone may be changing to make more money, and sitting a year out of an industry hurts your chances of finding employment.
So if you don't offer enough, they won't take t and still go to work.

Re:Both arguments make sense (4, Insightful)

Libertarian001 (453712) | more than 5 years ago | (#27840009)

Companies have no business telling people where they can and cannot work. Don't want to risk losing your people? I guess that means you value them. Maybe try not treating them like shit and then you won't lose them.

Re:Both arguments make sense (1)

fishbowl (7759) | more than 5 years ago | (#27840191)

>Companies have no business telling people where they can and cannot work.

In every one of these cases, both parties voluntarily signed the contract. The government has limited business telling people what they can and cannot agree to in a contract.

Re:Both arguments make sense (1)

cdrguru (88047) | more than 5 years ago | (#27840219)

The problem is, a "corporation" has no ethical base. So a competitor offers a key employee 3x their salary to come work for them. Knowing full well that the loss of this key employee will set back the release of a product their current employer is trying to get out.

They pay the guy 3x his former salary for four months and fire him. Nope, you don't fit in with our culture.

Competitor succeeds in torpedoing product launch so their product is the only one in the marketplace longer. Big win for them.

Former employer is screwed, perhaps justifiably so. You can never have "key employees".

Employee is really screwed. He is out of a job and has a history of jumping ship and leaving projects unfinished. He also just got canned for "not fitting in" and "not being a team player". Loser. Big loser.

The only way this doesn't play out every day is competitor is afraid of getting sued. And even so, it still happens.

Re:Both arguments make sense (1)

MobyDisk (75490) | more than 5 years ago | (#27840211)

What if the MMORPGs are in different markets with minimal crossover? What if the employee left because the other MMORPG sucks and they learned nothing useful?

Re:Both arguments make sense (1)

cdrguru (88047) | more than 5 years ago | (#27840253)

This example probably has no "compete" in it in any meaningful way.

Let's say you were doing graphics design for an ad campaign for a new product for Apple. Like all new Apple products, it is real secret. Microsoft offers you more money, better benefits, relocation to anywhere you want to live - just bring along samples of your recent work. Very recent work. Big, high-resolution samples.

Should they be able to do this with impunity?

The right to work. (3, Insightful)

Bellegante (1519683) | more than 5 years ago | (#27839457)

The freedom to seek gainful employment should not be infringed.

While not a specifically enumerated right of the people, it is both expected that we work in a productive manner, and beneficial to the society in which we live.

The only way I could possibly agree with the enforcement of such a contract would be through compensation - have them pay his salary for each of the 12 months they expect him to be employed.

Even then, it deprives society of the good work he could be doing. Why should the government agree to such a thing?

Re:The right to work. (0)

Anonymous Coward | more than 5 years ago | (#27839695)

So, people should not have the right to agree to sell certain rights? Ok, I can see that. "For $5000 I agree to drink cyanide," is a dumb enough and useless enough deal (and most importantly: outweighed by a "bad thing"), that I'm willing to have the government point guns at people to demand that neither party be allowed to make that deal. And if they resist and the government has to kill someone to save them from dying, well, the dumbass deserved it. Good riddance.

But is working really that important, that we think people shouldn't be allowed to negotiate it away?

Suppose someone were going to pay me 2 years worth of money, up front, for 1 year of work, in exchange for not competing for a year. I can survive that second year, thanks to the money (especially since I got 1 years worth of interest on it) and if worse comes to worse, I can always get employment in some other field. But you're saying I shouldn't have the right to take the 2x-paying job? You bastard! I wanted the money, dammit.

Re:The right to work. (2, Insightful)

NeutronCowboy (896098) | more than 5 years ago | (#27839905)

Suppose someone were going to pay me 2 years worth of money, up front, for 1 year of work, in exchange for not competing for a year.

That's not how it works. They pay you market rate for doing your job (possibly a bit above to make you leave). It certainly isn't twice as much or (years worked+noncompete term)/(years worked) extra.

That's really the problem.

Re:The right to work. (1)

Skapare (16644) | more than 5 years ago | (#27839991)

So, people should not have the right to agree to sell certain rights?

Did he FREELY sell those rights for an identifiable compensation? Or was he coerced into something that clearly takes away right, by not having a choice (e.g. sign this or no job)? If EMC's intent was STRICTLY to be sure trade secrets are not divulged, then why didn't they just ask him to sign an agreement for that? The reality is these clauses are abusive because they go beyond what the companies are claiming they protect. These clauses are intended to entrap people to keep pay levels lower, reducing the competition. EMC did not negotiate in good faith. EMC should pay him his full salary for the period (12 months in this case) it wants to control how he makes a living.

Suppose someone were going to pay me 2 years worth of money, up front, for 1 year of work, in exchange for not competing for a year.

That's not what EMC did in this case. It was continuing employment. What you are saying is the equivalent of EMC paying him 12 months of salary to sit out ... not in advance like your suggested situation, but at the end of the continuing employment. If we make the law require people to be paid their original salary for the period they are denied work where they otherwise could get work in their field, by the employer denying it, then that changes things. It's about the money.

Re:The right to work. (1)

Rakishi (759894) | more than 5 years ago | (#27840341)

If EMC's intent was STRICTLY to be sure trade secrets are not divulged, then why didn't they just ask him to sign an agreement for that?

Because no one would ever dream of lying and breaking a contract that is near impossible to enforce? Or do you have some magic ability that would let EMC know that someone divulged trade secrets and prove in court that a particular ex-employer did so?

Re:The right to work. (1)

DMalic (1118167) | more than 5 years ago | (#27840207)

I don't think companies are doing that. I think they're paying, say, 1.2 years worth of money. Maybe they're not paying anything extra. Hypothetically, this is based on their superior bargaining position as compared to the employee (he needs a job more than they need him, and most companies in his field want no-competes.)

Re:The right to work. (1)

Ammin (1012579) | more than 5 years ago | (#27839881)

I'd counter with the right to protect your business. Non-competes arise out of a number of valid reasons. They can be used to protect trade secrets. They can be used to protect customer relationships. Both of these cost a lot of money to create and maintain and there has to be some method of keeping your direct competitors from poaching them by bribing your employees.

That said, the law usually finds a balance and will usually strike down a non-compete that is too broad -- or in other words, defines "competitor" so expansively that it's impossible to find another job the utilizes your actual skills (rather than your former employer's trade secrets or customer relationships.)

Let EMC sue in Barbados (5, Insightful)

timeOday (582209) | more than 5 years ago | (#27839473)

It appears most of EMC is technically "located" in foreign tax havens [transnationale.org] (click Locations & Production). As such, I don't think the US Justice System should waste US taxpayer money enforcing EMC contracts. They like the low taxes in the Bahamas and Bermuda, let's see them protect EMC.

Re:Let EMC sue in Barbados (3, Insightful)

Speare (84249) | more than 5 years ago | (#27839823)

Do you really want to go down the "you only get the legal protections you pay for" road? Libertarianism is strong on this site, but let's just say... there are some pretty rich players who don't have your best interests at heart.

Re:Let EMC sue in Barbados (0)

Anonymous Coward | more than 5 years ago | (#27839973)

there is no road to go down, WE ARE TRAVELING ON IT and have been for some time. If this was just some schmoe wanting to get another job we wouldn't have heard about it, So if EMC is not a US based company they should stfu. IMHO - This being a hindrance of interstate commerce I see Mass. losing.

Re:Let EMC sue in Barbados (0)

Anonymous Coward | more than 5 years ago | (#27839843)

Written like someone who has never taken a contracts course. I can't believe mind numbingly stupid comments like these from armchair lawyers are "insightful".

IA(almost)AL.

Both arguments make sense but..... (2, Interesting)

Gravedigger3 (888675) | more than 5 years ago | (#27839577)

FTA:

"HP is no more guilty than EMC when it comes to wooing talent from competitors. EMC has hired several HP executives, including Mark Lewis, former vice president of worldwide marketing for HP's network storage solutions group, who is now EMC's president of Content Management and Archiving, and Howard Elias, HP's former senior vice president of business management and operations, who is now president of EMC's Global Services and Resource Management Software group."

Hahaha silly EMC. At first read I could see EMC's argument but if they aren't playing by the same rules they are trying to get enforced then I don't believe this glaring hypocrisy will go overlooked.

Silicon Valley exists because ... (0)

Anonymous Coward | more than 5 years ago | (#27839677)

Start-ups could hire the people they needed in California because there were no non-compete clauses hanging over their heads. That wasn't the case back east.

Basically the easterners squandered their first player advantage. Ain't capitalism great?

WTF (1)

alexborges (313924) | more than 5 years ago | (#27839779)

Is this "Intelectual" property?

Is it like owning a Sean Penn lookalike and flogging it with a ninetail until it stops squirmin'?

In MA it is known as (0, Offtopic)

geekoid (135745) | more than 5 years ago | (#27839793)

we own you, bitch.

So MA is bringing back slavery? (5, Interesting)

NeutronCowboy (896098) | more than 5 years ago | (#27839853)

Because that's what it really amounts to. Spend more than a few years at a company, get really good at what you do. Then, if the company pisses you off, you are faced with three options:
1) Bend over and take it.
2) Completely change your profession, and start from scratch. All knowledge you have acquired has been rendered useless.
3) Be unemployed for the term of the non-compete.

Alright, so it isn't quite slavery. You're not caned if you stop working for the master. But it's a damn risky proposition to actually stand up to any abuse.

Is any more proof necessary that overzealous IP laws will strangle our economy? As someone else pointed out, Silicon Valley is Silicon Valley because talent is free to move between companies.

Re:So MA is bringing back slavery? (1)

russotto (537200) | more than 5 years ago | (#27840051)

No, you're right; it's slavery. Not being caned just means the master isn't quite as brutal, not that he isn't the master.

At any job, if you're dissatisfied with your employer or your work, you can try any number of things, but if your employer isn't interested in working with you, you've only got one real recourse, and that's to leave. Works pretty much the same way the other way; if you're insistent on not doing the job, your employer can't compel you to do it, but he can fire you.

If your employer can, via a broad noncompete or other means, wipe out your ability to secure other employment, he's got you over a barrel. You're his slave.

Re:So MA is bringing back slavery? (1)

cdrguru (88047) | more than 5 years ago | (#27840135)

How about getting a job with a company that does not compete? How about the similar job for a company in a different line of business?

This doesn't help if your main attraction to a new employer is to bring over essentially trade secret information that they want to help them compete. This is clearly the case with a lot of Microsoft-Google job swaps. It has come up more than a few times with software companies that I have worked for. This should be actionable and in most cases, it is.

It gets a lot grayer if you have skills limited to a specific area. Let's say your knowledge is limited to programming complicated reports in RPG II and there are only four manufacturers left in the entire USA which use RPG II and the all compete with each other as well as one of the manufacturers being selected by most customers because of their excellent reports. Yup, I think you are screwed in any environment where a non-compete has any validity whatsoever.

But it is your own damn fault for over-specialization.

Re:So MA is bringing back slavery? (2, Interesting)

Chemoboy (1548401) | more than 5 years ago | (#27840153)

I would classify it more like being an indentured servant. They are attempting to strip away the workers right through a contract which should never be possible in the first place. Perhaps, the only exception being issues of National Security or the military. Is there any way to justify this when some (maybe all) fortune 500 companies have all of their employees under IP / non-compete clauses?

California is a FREE STATE! (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27839897)

California was admitted to the union as a Free State. I think that once you set a foot in California you immediately become free.

Companies use non-compete agreements to cement their monopolies, like Microsoft. I wonder why non-competes aren't attacked by the anti-trust lawyers.

Silicon Valley and California benefit from the lack of non-competes, people move around more and ideas are "cross-pollinated" to many locations.

So why are there non-competes in California? (5, Interesting)

PDG (100516) | more than 5 years ago | (#27840063)

I work for a California company, and they had me sign a non-compete. I asked them why considering that California courts will not enforce them. Response from the legal department--just in case the court changes their mind.
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