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Enforcing Non-Competes That You Didn't Sign?

CmdrTaco posted more than 13 years ago | from the allright-now-thats-pretty-slimy dept.

News 159

Kyaphas writes "Looks like even if you don't sign a non-compete agreement, you might still be barred from working somewhere similar. " Yet another example of tech companies being jerks because things aren't as pretty as they were a year ago. Screwing over your customers is one thing, but it sucks that they would jerk around employees too.

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So? (1)

rexmob (225442) | more than 13 years ago | (#347954)

I'm sorry, but I don't see what's so wrong with this. If I were a CEO, I wouldn't want an employee taking knowledge learned at our company to a similar company. Yes, I know there are ND agreements, but they don't hold as much weight as we'd like to think.

I do work for a company where we had employees join us with CDs full of information that had taken with them from their previous company, regardless of the non-disclosure agreements they signed.

We're gonna end up like Islands in the Net (2)

Hairy_Potter (219096) | more than 13 years ago | (#347955)

or Neuromancer, if you get lucky, you get locked into a megacorporation just out of college, and practically need a armed force to extract you.

If you get unlucky, you sell obsolete warez in teh subway.

Wait until dead dot.coms are bought out (1)

Anonymous Coward | more than 13 years ago | (#347956)

and the new owners realize all the intellectual capital that was let go had signed non-compete contracts.

Can you imagine getting sued by a closed down company because you left to work for a competitor?

If customer databases are worth money, how much money can you get from suing ex-employees?

Not really all that new... (1)

klmartin (80562) | more than 13 years ago | (#347957)

When I was in law school I read noncompete cases decided in the early part of the 20th century. The idea of noncompete is nothing new. The idea of enforcing noncompetition in the absence of an agreement is also nothing new. It's well-established that employees have a fiduciary duty to their employers which is not discharged by termination.

The cited article wasn't news; it was a policy analysis piece.

Two sides of the coin: (1)

Wordsmith (183749) | more than 13 years ago | (#347958)

It's understandable that employers don't want protected information being leaked by former employees to competitors, but that's what NDAs are for. If I were heading a corporation, I'd be more concerned about making it easy to loose the investment on an employee I paid to train. But it's unfair to expect an employee to switch fields every time he or she switches jobs. If he or she has an interest in a given subject, while should the employee be forced to make such a radical career change? A better solution: Enforce your NDAs. Have your employees sign contracts that say they'll stick around for X amount of time. Don't bully them around - its bad for them, and your HR department is going to hate you for it when they can't find new hires.

My Thoughts (1)

Rosonowski (250492) | more than 13 years ago | (#347959)

Even if someone does sign an agreement saying that they can't say anything about something if they stop working there, where do employers get off thinking that they should be able to tell someone where and where they can't work?

I've heard of something similar:
It's called slavery. When they say that you can't go somewhere, and that you can't work for this person, or this person, that's slavery.

Granted, you're getting payed, but nonetheless, they are stripping you of a liberty.
But saying that you can't do something without you agreeing is a facist dictatorship. It's funny how when you relate government to work, that there hasn't been any revolutions yet. Other then some postal workers, but that's another story, because the work for the government.

Karma...Police...
Arrest this man...
He talks in maths,
He buzzes like a fridge..

Re:So? (1)

Sc00ter (99550) | more than 13 years ago | (#347960)

Non-Disclosure is different then a Non-Compete. I fell that Non-Disclosures should stand up. But Non-Competes keep you from getting another job just because a company you want to work for does something similar.

Plus, if the company your ex-employee left for starts cranking out products that are very very close to yours you know there's something up.


--

This just should not be possible (1)

Ubi_NL (313657) | more than 13 years ago | (#347961)

On my old job, we had to sign an agreement that we were not allowed to work at a competetive company for 5 years after resigning. This means that, If I, for instance, left my job because my boss was being an asshole, I could not get a new job for which I was actually trained. Of course, nobody signed the agreement, after which the management decided to stop pay rises in total. This became my 'old job; pretty quickly after that...

Watch out slashdot! (4)

CBoy (129544) | more than 13 years ago | (#347962)

I hope none of you are thinking about going over to Kuro5hin ;)

is there a register somewhere (5)

joss (1346) | more than 13 years ago | (#347963)

It seems like an independent register to keep track of which companies are being assholes about this kind of thing would be useful.

Then just avoid working for those companies.

Perhaps a disgruntled former employee of somewhere particuarly nasty could set it up. Once the word got out, it would be a popular site.

Article refers to executives (and Microsoft) (4)

coyote-san (38515) | more than 13 years ago | (#347964)

If you read the article, there's a common refrain. A director of manufacturing was blocked. A new company's CEO and two other executives were blocked. These are not programmers, or even analysts and technical managers. These are senior people who would be highly knowledgeable about their former employer's business details.

The exceptions are a couple people in sales in a highly specialized market who were accused of taking a customer list (which was not properly protected by the former employee), and that case where Microsoft threw its weight around and forced a company to cut 1/4 of its staff, former Microsoft employees, to avoid spending all of its time in court.

While this isn't something we can ignore - with small startup staffs, today's grunt programmer may be an "executive" at tomorrow's startup - it's hardly a return to the days when companies tried to insist that "you learned C on this job, you can't use C for 2 years!"

Non-compete Clauses (2)

Jack9 (11421) | more than 13 years ago | (#347965)

Non compete clauses are not legal within the state of california under any circumstances as a barrier to trade. Non compete clauses are often found within agreements, but are as common as severability clauses, which is the point. Severability is a clause which states that an agreement is not invalidated if it is found to be unenforceable or unrecognized by the court...only that section of the agreement is affected.

Often wrong but never in doubt.
I am Jack9.
Everyone knows me.

Further tightening the noose (1)

coupland (160334) | more than 13 years ago | (#347966)

This is a step too far in protecting intellectual property, and is made the more frustrating when you consider that many countries don't even consider software patentable. So not only are the United States taking unreasonable steps to protect intellectual property, it's debatable whether these properties should be protected at all! Obviously stealing source code or hardware designs has to be prevented, but the tech. industry is no different from any other and people's freedom to switch jobs shouldn't be arbitrarily taken away.


---

HorseHockey (2)

HerrGlock (141750) | more than 13 years ago | (#347967)

Most of the non-competes are for exatly what they stated, that a person cannot use the inside information of a company to better another company. It is agreeable that should be restricted. What this and a lot of other 'non-compete' clauses look like any more is the company saying, "you cannot even LOOK for another job, so if we cut your pay/benifits/perks, there is nothing you can do about it because we'll sue the pants off you and you will lose."

This is BS. Just another way for companies to have 'at-will' employment but only the company has the ability to terminate the employment. The employee is stuck without even the ability to be able to leave due to a clause in the agreement.

Don't give me the 'you knew what the agreement was when you joined' because this whole thing is an employee who had the rules changed on him and got screwed for something that was not put out and signed by all the 'agreeing' parties. Sounds like some of these negative agreement mailings you get where if you do nothing you agree to whatever terms they give whether or not you actually received the notice.

DanH
Cav Pilot's Reference Page [cavalrypilot.com]

Re:How is this bad (1)

nolesrule (152898) | more than 13 years ago | (#347968)

That's non-disclosure, not non-compete.

Re:How is this bad (1)

Sc00ter (99550) | more than 13 years ago | (#347969)

That sounds more like a non-disclosure. A non-compete would keep you from doing the same job at another company that competes with Microsoft (who doesn't at this point).
--

Non-Compete Agreements (1)

Husaria (262766) | more than 13 years ago | (#347970)

Don't like it sign it.
This seems to be a simple soltuion but a man has to eat. But it doesn't really seem fair someone is going to make you sign an agreement which will put you possibly unemployed for an long time.
What's the difference one year or one week? I'll transmit the secrets out on the web after I get fired and let anyone look at them...Doesn't really matter does it?

Re:Article refers to executives (and Microsoft) (3)

Anoriymous Coward (257749) | more than 13 years ago | (#347971)

You missed the engineer who was forbidden to work on a particular kind of pump.

Here is a good example of trade secrets being used as patents. If the stuff was patented, then the ex-employee couldn't use that knowledge without his new company compensating you.

Come to that, if these employees are so valuable, why are you letting them leave in the first place?

--

Not nearly so alarming (2)

swordgeek (112599) | more than 13 years ago | (#347972)

OK, some of this sucks. Some of the implications DEFINITELY suck.

But ultimately, nearly all of the cases they're talking about fall into one of two categories:

1) A non-compete contract has been signed, and the question is one of geographica jurisdiction. (since competitors can now be halfway around the world)

2) Misappropriation of trade secrets, which is illegal regardless of non-compete contracts, and always has been. Furthermore, it should be remembered that companies are _required_ to aggressively protect trade secrets, or they lose them. If they let one employee go start up a company and ignore what might be misappropriation, then they lose the right to prosecute anyone else over the same claim in the future.

The inevitable disclosure concept is a fine line to tread, of that there's no doubt. Also, the nature of what defines a trade secret is a tough question. All this article really says, after you strip out the hype and paranoia, is that some judges are coming down harder than they might, while others aren't.

Is this worth an article in C|Net and another on /.? Maybe to make people aware of the issues, but it's not a particularly big deal.

Canada (2)

FigBugDeux (257259) | more than 13 years ago | (#347973)

Move to Canada. They won't stand up on court, so even if you do sign them, they are meaningless. A company does not have the right to take away your ability to earn money. If they don't want you to work for the competition, they have to pay you to sit at home.

Companies and employees need a clear understanding (1)

Daniel Dvorkin (106857) | more than 13 years ago | (#347974)

... of their rights and responsibilities. If employees sign NDA's and/or non-compete contracts, fine; then they're clearly bound not to go to the competition with what they know. But corporations which try to infer the existence of NDA's and non-compete contracts _where none actually exist_ are _evil_, and should be subject to severe antitrust penalties if they make any legal trouble for former employees at all.

Of course, we all know better than to expect any antitrust enforcement for the next four years, don't we?

What do you expect? (1)

JAVAC THE GREAT (239850) | more than 13 years ago | (#347975)

If you work in a bleeding-edge industry like web-development, you should know that any future employment may be jeopardized by the advanced knowledge you have of your current employer's technology. Obviously, it is legally questionable to begin employment at a competitor while you still have much of the knowledge garnered from your current employer. This is why companies are hesitant to hire employees who used to work at Intel or Microsoft -- they are afraid of lawsuits against them because you become a Trade Secret liability.
---

Having witnessed a non-compete battle... (3)

TWX_the_Linux_Zealot (227666) | more than 13 years ago | (#347976)

... I can honestly say that fo the most part I hate the things. a coworker of mine (when I worked at a computer field service company) was part owner of his brother's company, which was also a field service company. My coworker had been working for the same company as me for a long time, but only because his brother's company wasn't quite strong enough to provide the income he needed. Eventually our boss (the owner) asked my coworker to sign a non-compete, he said that he had to have his lawyer look it over, tensions grew, etc, until ironically conditions at the company I worked for grew so bad that he quit, went to work for his brother, and several of the customers willingly found him for their computer needs, on their own. My boss tried to sue, and lost, because of no non-compete, customers who explained their reasoning in court, etc, and he wasted several thousand in legal fees to enforce something that really can't be enforced very well in Arizona.

Because Arizona is a "right to work" state, there's not nearly as much that a company can do to bar someone from using their skills elsewhere, the former employer isn't even allowed to overly badmouth the employee when a new prospective employer call them, the old employer can be sued for slander. It's much more sane here for the worker.

"Titanic was 3hr and 17min long. They could have lost 3hr and 17min from that."

Re:How is this bad (1)

Hammer (14284) | more than 13 years ago | (#347977)

The problem is that they enforce non-compete without the agreement/contract. That is screwing your employees. I have signed a non-compete contract (and got paid for it) and have no problem with it. However, if I did not sign it and my employer tried to enforce it anyway I'd be really upset.

Well isn't that too fucking bad (2)

gelfling (6534) | more than 13 years ago | (#347978)

Was any IP infringed? No. Company secrets? maybe, hard to prove - perhaps they should pursue that in court. Barring somebody from working because of what they may or may not do is absurd. That's one of the risks you take when you run a business. If you do your own due dilligence then you will lock down legally whatever you can to give yourself an advantage. Blocking somebody from talking about what you as a business haven't had the time, inclination, interest or brain power to worry about is so fucking lame as to be laughable. If the knowledge is so unique why is it unprotected otherwise. You'd think that these assholes who can fire up a team of lawyers to go after SOMEONE could somehow get their pointy heads out of their asses long enough to protect the assets themselves.

I swear to god the number of lawsuits a company has against other people is practically an asset on the balance sheet.

How to kill inevitable disclosure - easy (3)

dbrutus (71639) | more than 13 years ago | (#347979)

Inevitable disclosure, if applied to high officials in government service could eliminate their ability to become lobbyists. File a few public interest lawsuits against Henry Kissinger, George Stephanopolous, and anybody else who trades on their inside government info.

I think you would be amazed at how politically unpopular inevitable disclosure would become, and very quickly too.

DB

Re:Not really all that new... (1)

pete-classic (75983) | more than 13 years ago | (#347980)

employees have a fiduciary duty to their employers which is not discharged by termination.

That's nice. Maybe I can get the company that just layed me off to make some of my mortgage payments.

Oh, nevermind, it only goes one way.




"There is no number '1.'"

This reads like dystopian fiction (2)

eXtro (258933) | more than 13 years ago | (#347981)

In the Ciena case the article says that the one year prohibition on working for a competitor was in the contract. In this case the manager loses through his own stupidity, you should never sign a contract like that. Maybe he had some personal justification for it, such as he expected his stock options to earn him a retirement, but assuming that they'd play nice and not apply it isn't a bright expectation.

What is really frightening are the cases where no non-compete agreement was signed yet companies managed to enforce one after the fact. This can only happen with a collusion between a corrupt company and an equally corrupt government. In the doubleclick case the accusation was that these workers stole information. If that really was the case go for a prosecution. Alleging this and getting an injunction preventing them from working is criminal though.

Companies now seem to have the power not only to force you to sign your rights away as a requirement for employment but also to make up new rules after the fact if their legal teams didn't put the thumb screws on hard enough initially.

If you're a fan of science fictions set in a dystopian future, welcome to the future for the future is now.

Re:Canada (1)

revin (191651) | more than 13 years ago | (#347982)

I think the same appllies to all countries in the European Union. At least in Belgium, ... this smells like a human right!

Hmmm. (1)

pallex (126468) | more than 13 years ago | (#347983)

"It's called slavery. When they say that you can't go somewhere, and that you can't work for this person, or this person, that's slavery."

No, slavery is when you are taken from where you live, sold to someone else, forced to work for them for no money, beaten, raped, killed etc.

Ever considered studying history?

Well put (2)

graniteMonkey (87619) | more than 13 years ago | (#347984)

I agree that NDAs should protect an employer from having their information carted away, but most of the stuff that can be taken is intractable. How do you keep someone from taking the experiences with them, like "x was a bad design choice because look what happened when we did it here, y worked better as a solution, and I'd do it that was from the beginning if I had another chance." Forcing an employee to switch fields may get that job done, but it's overkill.

If I'm an engineer at a database company, and I don't like my work environment or I think my company's management structure is severely flawed, I'd definitely want to work for another company doing the same thing. It wouldn't be the subject that I dislike, just the particular people working on the problem. But being forced to go do something like bag groceries for a year while my NDA expires makes it potentially risky to leave my workplace. Can you say "trapped"?

Maybe your suggestion of a contract is the best way to go, but it should be the responsibility of the employee to look for that kind of work. The structure's already there for a lot of jobs. Get a contract to do some project with a company you're interested in. At the end of the contract, say 6 months, if you both like each other, then you move on to a permanent position. Kinda like dating. Then, maybe you lower the risk of getting yourself into the situation in the first place. Plus, you don't have to change the way things work already. Maybe they sound like they might suck a little, it's probably the best we're going to get for years to come.

Re:How is this bad (2)

Wansu (846) | more than 13 years ago | (#347985)

I don't understand how you people somehow feel that you have any right to release proprietary information about a previous employer.

I don't believe anyone has advocated releasing proprietary info about a previous employer. The problem is this "inevitable disclosure" concept being used to justify depriving workers of their livelyhood. Combine that with the tendancy of some people to define common knowledge as intellectual property and this becomes kinda jack-booted.

Funny (1)

onepoint (301486) | more than 13 years ago | (#347986)

As funny as your statement is, It could hold up in court. I have seen recently the non-compete agreement is also signed with a non-disclosure agreement. So any tech-advancements that you created might also belong to the dead dot com. Giving the dead dot come another avenue of assest to exploit.

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Most "secrets" really aren't all that secret (5)

sjbe (173966) | more than 13 years ago | (#347987)

This article is somewhat frightening to me. While most companies I've worked at attempt to keep quiet about information that could potentially benefit the competition (and rightfully so), most of the time what is regarded as "secret", really isn't very secret.

In most industries and with most products, it is not very hard for anyone with sufficient expertise in the field to understand what a competitor is doing. Heck, if you want to sell a product, you have to tell someone about it. After that your business model and products are pretty open to analysis.

My company makes car parts. There is really very little we have that our competitors don't also. We often pretend like what we are doing is something secret that will give us an advantage, but in reality our competitors are doing the same things. We know what they are doing (generally) and they know what we are doing (generally) so this veneer of secrecy is really just that. Our engineers aren't significantly more (or less) capable and our manufacturing capabilities are comperable. The only real differences are in how we handle our finances, and what intellectual property we happen to own.

The industry of competitive intelligence really isn't so much about finding "secret documents" and industrial spying. (though certainly some of that occurs) Most of it is simply doing a thorough analysis based on publicly available information. You'd be amazed how little really is secret if you are interested enough and willing to spend the time with the info to put the pieces together.

The only time I think a company might have a case for "inevitable disclosure" would be for very high up employees with access to strategic plans or for engineering personel working on not yet released projects (where an attempt at secrecy was maintained) going straight to a direct competitor in a position where that information would be a significant competitive advantage. Other than that, it's none of the company's business. Ever.

Re:So? (2)

cybrthng (22291) | more than 13 years ago | (#347988)

Its not like you as a CEO had anything to do with X employee learing something new at X company.

Of all the education, training and learning i have done at every job i have had, NO CEO or NO COMPANY was responsible for it. Zilch.

I was the one who bought the books, paid for classes, did the testing and put the time in. Just because i used my abilities to excell in any business doesn't mean i can't take them elsewhere.

Trade secrets on the other hand should be protected. If i know secrets and took them to a competitor then that in itself is just wrong. On the other hand, if company X fears your going to scew them then they have problems to begin with.

But simply learning, or even being trained by a company doesn't mean they own you. Employment is a right NOT a law.

Taken to extremes... (2)

meckardt (113120) | more than 13 years ago | (#347989)

Your non-compete agreement requires you to not work in the programming field for the next five years. After that, you may again program. Have a nice day.

Lawyers and judges are NOT... (2)

Nidhogg (161640) | more than 13 years ago | (#347990)

technical people. And that's one of the biggest problems here.

And if you take a step back it's really hard to blame them for this. We can't expect them to understand everything about everything. (Well alright we can expect it but sorry.. it's really not feasible.)

The article even mentions this. The only way to truly determine "inevitable disclosure" would be to extend the case until the judge and/or jury can examine the practices and basis of the 2 companies involved to see if there would be a conflict. So let's say they do that. The person will still be unemployed during all that time as well as being saddled with rising legal bills.

Ah but I hear you say the phrase "testimony from Friends of the Court" regarding the technical issues. In an ideal world that would certainly help. But you're assuming that these "Friends" would be impartial. Not to sound too cynical here, but it's always seemed to me that impartiality is a pretty subjective thing.

What's the answer? I haven't a clue.

Do I like that it's happening? No.

Do I think the courts are doing the best they can? Maybe.

It seems like a bad situation all around that really has no cut and dry answer. I'd say the courts aren't the best venue to decide this sort of thing... but it's all we've got.

Re:So? (3)

CrackElf (318113) | more than 13 years ago | (#347991)

But that means that if I, as an employee, feel that I am underpaid for what I do, and someone else offers me more, I may be barred from taking it, even if my current employer is ripping me off.

I think that if a company wants to keep an employee they should match or beat offers. If an employee is really that vital, perhaps, they could find the money / incentives instead of refusing to meet the market value for skills.
-CrackElf

Non-Compete often unenforcable (2)

The-One1 (267407) | more than 13 years ago | (#347992)

The article certainly raises warning flags. What it doesn't mention is the other side of the coin.

Non-compete clauses are often ruled uneforceable.

I was sued by a company based on a ND/NC clause for a job I took. I fought the case, and won. The court ruled that the clause was overbraod and uneforceable. I am happily emplyed in a very similar job at my new company.

Re:So? (3)

McSpew (316871) | more than 13 years ago | (#347993)

That's a nice theory, but it's unfair to prevent an employee from working in his chosen career simply because he knows things about your company that you'd rather not have going to your competitors. If your employees are so valuable, then you as an employer should treat them as such. If your employees are repositories of valuable information, then you should compensate them accordingly.

IANAL, but a friend who was once asked to sign a fairly restrictive non-compete was told by his attorney to go ahead and sign it because it was completely unenforceable in my state.

I live in a "right to work" state, which means that employers can't require me to be in a union to get a job, and I can be fired without cause or quit without notice without any risk of compensatory damages being awarded to the other party.

We live in a time when companies are increasingly looking to contract law to regain control over their employees. Most modern non-compete agreements are simply an attempt to reinstate indentured servitude, albeit in a more sanitized form.

Corporations are currently working every angle they can to gain all sorts of inappropriate legal protections and tools (see UCITA, DMCA, et. al.). At some point, voters will revolt and Congress will be forced to provide more and better civil liberties protection.

Or perhaps the revolt won't happen until bloodshed becomes the only serious chance to achieve meaningful change.

I hope not.

Losing Millions (1)

MarkusH (198450) | more than 13 years ago | (#347994)

In addition to losing his job, the former Ciena employee lost out on "millions of dollars in potential stock profits when Lucent Technologies bought Chromatis for $4.5 billion in May," according to the Journal.

So can the former employee sue for lost wages? If I lost a few million dollars because of this, I would definitely be talking to a lawyer.

The Real Issue (1)

jjr (6873) | more than 13 years ago | (#347995)

Companies are thier to make money. Like it or not they are going to protect what ever they seem valuable. On the other side is the employee who needs a job and want to do what ever they can to do well at the new place of employment. I seen have this happen before. It is not a nice thing to go through on either side.

Re:is there a register somewhere (1)

kirkb (158552) | more than 13 years ago | (#347996)

I propose "f*ckedemployee.com"

unions... (2)

kevin lyda (4803) | more than 13 years ago | (#347997)

well gee, maybe unions aren't the terrible monsters people thought they were.

Re:Not really all that new... (3)

cyber-vandal (148830) | more than 13 years ago | (#347998)

Do they really? What a joke. When corps are loyal to their 'human resources' then they can expect reciprocal loyalty. While they lay people off because the profits were only $1.8BN instead of $2BN they can stick it.
After all, it wasn't just the board that put Cisco, for example, where they are today, but there's no suggestion that the board should tighten their belts a little and do without that third home or Lear jet.

Know How vs. Trade Secret (3)

parabyte (61793) | more than 13 years ago | (#347999)

I had to deal with such situations several times and on both sides under German Law and Jurisdiction, and from the talks with many lawyers I learned:

Know How is yours, and you can do with it as you please. Trade Secrets are confidential, but only for a limited time (how long depends, but rarely longer than two years).

In general the difference between a trade secret and Know How seems to be that trade secrets will be worthless after a short time.

The IMHO correct ratio behind (German) law favouring the individual labourer is that you can not rip out a part of your brain if you leave, and a company is not allowed to own a human beeing or even parts of it, at least in Germany.

In Germany the courts also refer to "inevitable disclosure", but they interpret it that you can not be held liable for something inevitable.

It is also ruled that any non-compete clause must be compensated with at least 50% of the last monthly salary for every month it shall be valid.

So here the rule seems to be simple: You can base your career on know how, but you should be very careful with short term gains you achieve just because you have fresh insider information from you previous employer.

Re:Article refers to executives (and Microsoft) (2)

Alien54 (180860) | more than 13 years ago | (#348000)

Come to that, if these employees are so valuable, why are you letting them leave in the first place?

What you miss is the proverbial pointy haired boss/corporation.

In other words, "since you have a noncompete, we can now treat you like dirt. If fact we will treat you so badly that the days we treated you like dirt will be fondly remembered as the golden years. And you can't ever leave without ruining your life."

The next step in the process is to make the employee liable for the compensation, so that if they leave they pay their former employer a severance package.

Re:This is a non-issue for smart employees. (1)

hburch (98908) | more than 13 years ago | (#348001)

Read the article. It discusses in detail the idea of inevitable disclosure, which would mean that even if you didn't sign an agreement, you could be barred from taking a similar position at another company.

You must be mistaken (1)

Sheepdot (211478) | more than 13 years ago | (#348002)

Why is everyone rambling about non-competes? This is an article regarding trade secrets and reasons why you can work at a competitor.

What I like about trade secret arguments for you not leaving one job to work at another is that they put the responsibility of proof on the previous employer. Where non-competes can only be disolved if you take the initiative.

Trade secret stuff is a no brainer for those that have jobs in IT. You can't take PHP code from one business and goto a competitor to work on it. Even if you are fired and are really pissed at your boss.

Anway, saying "looks like you can get screwed even if you don't sign a non-compete" is a very inappropriate thing to put in a news blurb on here. Especially since this has been around for a while and was intended to stop unethical business pratices.

(I will admit though, I won't put it past corporations to *use* this law as if it was a non-compete, possibly saying you were let in on specific info that could damage the company if you worked at a competitor)

Regulations are finally starting to trickle their way down to the middle class. It sucks.

Not what this is about (2)

Christianfreak (100697) | more than 13 years ago | (#348003)

This isn't about employees not releasing proprietary information and you are right. No employee should do that. But this is about companies preventing employees from getting new jobs unless they change their entire field, that's stupid and a violation of rights, I for one will never sign any agreement that says I can't work for whoever would hire me.

"One World, one Web, one Program" - Microsoft promotional ad

Re:is there a register somewhere (1)

blindbat (189141) | more than 13 years ago | (#348004)

Then you get more companies like Amazon writing clauses into employment documents that say you can't say anything bad when you leave.

Noncompetes (1)

Galen Wolffit (188146) | more than 13 years ago | (#348005)

Obviously it's a common practice for employers to ask/require employees to sign noncompete agreements before they begin employment. I was recently offered a position at another company (an offer I turned down, by the way) that had such a clause in their standard employee agreement. I informed them that I would not be willing to sign such an agreement, they responded that they would talk to their lawyers about removing it. All that aside - if you don't want to have to worry about noncompete agreements, move to a "Right to Work" state like Virginia, where such contracts are difficult if not impossible to enforce.

They've gone too far (2)

TopShelf (92521) | more than 13 years ago | (#348006)

You right - the courts here have basically made up a non-compete clause where one never existed. The only justification I could see would be to what extent there was indeed evidence that they were going to use confidential DoubleClick information in their new position.

If this became more widespread, however, it would basically give employers way too much power to restrict the mobility of their workforce.

Re:HorseHockey (2)

Ronin Developer (67677) | more than 13 years ago | (#348007)

In most states, non-compete agreements will not hold up in a court of law. They have ruled that a company can not stop another individual from earning a living in their chosen profession (thus depriving them of their rights).

You can not prevent someone from learning, either. But, depending upon how you are hired or what agreements you may have signed, you may be prevented from disclosing closely guarded information (i.e. trade secrets...like taking the Col. Sander's secret recipe to Cluck Cluck Chicken or something). However, if the receipe became common knowledge, then there is no basis for the non-compete and it would falter.

Unfortunately, it's a thin line and many of us don't have the resources to defend ourselves in court. Most companies are banking on this proposition. Others are smart enough not to even try as the losses for depriving an individual of their constitutional rights can be staggering.

More typically, you will find non-disclosure agreements. These must be limited (unless your a spook) as an all inclusive one will not hold up either.

A bigger problem is that as you progress up the management chain and disclose trade secrets, you may find your next job harder to obtain (or retain). And, what company would seriously trust you after you reveal the secrets of another? They'd hire you, get the information, and then let you go (can you say downsized?). Then, you're screwed as you're unemployed and not trusted...Not a good position to be in.

Whether the law says its legal or not, perspective employers still obtain more information about you from prior employers...They won't do it in an official capacity, but maybe over a beer or at an informal gathering.

small company defenses (1)

fayd (143105) | more than 13 years ago | (#348008)

I had a consulting firm try to recruit me a while back. Their non-compete agreement (which was the deal breaker) claimed that their "unique consulting process" was how they differentiated themselves from their competitors. Therefore, I couldn't go to work for any competitor of theirs for fear that I would divulge the secrets of their process and unduly aid them.

There are a couple of kickers here: first, they posted the meat of their process on their web site, because their "unique process" is also the main selling point when marketing their services.

Secondly, their process was developed by experienced software consultants, who didn't get their experience at said company (because it's a fairly new company), but at previous companies. One has to wonder what NCAs were violated in the development of "the process".

It occurred to me that since the NCA didn't make much sense, I could only conclude that the company had little long-term economic incentive for me to stay, so it compensated by putting up legal barriers to keep me from leaving. Thinking about it further, it seems pretty clear that for small companies, the key threat is not an employee giving "valuable intellectual property" to a competitor, but the fact that an employee with "valuable intellectual skills" walked out the door. The damage done to a small company just by a key employee leaving can be huge.

At this consulting company, I looked around at the developer side and saw a very small core. It later became obvious that they couldn't afford to hire too many good geeks and had to use every trick in the book (besides paying them more) to keep them on. Specifically it became obvious three months after they tried to get me when they ran out of money and went under.

Carefully Word Your Resume (2)

robbway (200983) | more than 13 years ago | (#348009)

I'm afraid this puts the burden on the employee to track his skills. Carefully word your Resume to show exactly what skills you went in with. Keep close documentation of the training you learned that is not specifically your corporation, like learning an operating system or new programming language. Separately maintain that training which is trade secret. Make sure you avoid using training from the trade secret list. Strong documentation of your skills is very valuable in lawsuits, especially with dates, hours, who paid for it, what was learned, and whether these skills are publicly taught.

Unfortunately, non-competition clauses are very bad and very legal by precedence. Relative newcomers don't have the choice, usually, so know your own contract. Once you are free of that first contract, don't ever sign a non-compete again.

One more word of advice: contracting yourself out to a company is not being employed by that company. This primarily applies to government workers who wish to apply their skills and avoid a contract violation ("inside information").

----------------------

Bah.. Ask a lawyer (2)

cmowire (254489) | more than 13 years ago | (#348010)

IANAL, but I have one in the family.

The best thing to do with annoying contracts is to X out the part that is too strictly worded and replace it with something that is ethical, fair, and non-restrictive.

And don't argue the point with the company lawyer. Just get your boss to sign it. The lawyers are paid to screw you over with contracts. Your boss is just there to work you to death.

I mean, a good example was my IP agreement. It said that anything I did in my spare time was their property. I replaced it with anything done in my spare time with no company resources, with the specific example of my 3D engine, belonged to me. The wording was a little vauge, so I might have not needed to do that, but it was a good measure of safety.

The same thing goes for non-compete clauses. You adjust the meaning to something that is fair. Because, face it, it's not exactly fair to your employer if they pay $10,000 training you in SAP or some similar valuable skillset and you quit the day after you are finished being trained. It isn't fair for you to take proprietary company information with you when you leave.

I don't look upon it as planning to quit. If your employer is free to fire you at will, you should be free to quit at will and not be burdened by unnecessary restrictions. Your employer should entice you to stay with benefits, not slavery.

Re:Most "secrets" really aren't all that secret (1)

haystor (102186) | more than 13 years ago | (#348011)

The only time I think a company might have a case for "inevitable disclosure" would be for very high up employees with access to strategic plans or for engineering personel working on not yet released projects

Add sales to that. What I noticed from the article was that most of the examples were about sales positions. Even if a salesman doesn't take confidential information when they go to a new company, they will still be using a valuable relationship with clients. This relationship was developed while the first company paid for it. This is roughly theft of the contact list, whether its written down, or not.

This is all a little different from a sysadmin going to a different company and being barred from inevitable disclosure of unix skills.

i left with my puppet... (1)

simpl3x (238301) | more than 13 years ago | (#348012)

legal action was threatened against me when i left a porn dot com with my personal puppet. this puppet was for my "personal" research, yet X company felt that this puppet could be "used" for business advantage. they seemed to feel that since it was used in for professional purposes that it was company intellectual property.

Re:You must be mistaken (2)

Zal42 (311906) | more than 13 years ago | (#348013)

"Trade secret stuff is a no brainer for those that have jobs in IT. You can't take PHP code from one business and goto a competitor to work on it. Even if you are fired and are really pissed at your boss. "

Your example isn't a Trade Secret example -- it's an example of theft. Trade Secrets only have the most nebulous legal definition -- and traditionally, once other people know the "secret", then it loses all of it's Trade Secret status. In other words -- if you didn't agree to keep quiet, you're under no legal obligation to keep quiet. If you did agree to shut up, and the secret gets out through no fault of yours, then you can make a strong case that you're now free to talk.

A more appropriate variation of your example is "You can't take knowledge of internal processes and procedures from one business and goto a competitor to work on it." Except of course, that under traditional legal intrepretation, you can! Unless you're contractually barred from doing so. You can never steal _code_, even if such activity isn't specifically mentioned in your contract.

I guess, in light of this article, I'll have to be a little more cautious in my contractual arrangements. When I do work-for-hire, I'll have to insert verbage into the contract that the contract represent the whole and complete agreement, and if I'm not prohibited from doing in the contract or by statute, then I'm free to do it.

Screwing Customers vs Employees (3)

FFFish (7567) | more than 13 years ago | (#348014)

"Screwing over your customers is one thing, but
it sucks that they would jerk around employees too."

Now, if *THAT* doesn't explain why the whole tech industry is falling to pieces, I dunno what does.

Those lowly customers, boy, are what *KEEP YOU FED.* You can replace the employee easily enough, especially in this market, but it's damn difficult to replace a customer: once a customer walks, you've lost him -- and a dozen others that he talks to -- for life. And winning a new customer is dozens of times more expensive than keeping an existing one.

If Taco's attitude is prevalent, I suggest that everyone sell off their tech stocks and invest in, say, Sears, because there is *no hope* for the industry.

Sheesh.

--

Re:Not really all that new... (2)

geomcbay (263540) | more than 13 years ago | (#348015)

It's well-established that employees have a fiduciary duty to their employers which is not discharged by termination.

While that might have been true at one time, this is changing quite rapidly. Its clear to anyone that follows business news these days that we're shifting to a completely "at will" employment arrangement. There's virtually no loyalty left on either side of the fence -- employees will jump from job to job and employers will layoff thousands just to get a couple percent boost in their market cap. As this becomes more and more than norm, old ideas about non-compete are going to have to change...

Clearly it is still wrong to take non-vague IP (source code, specific documents, etc) from one job to the next, but the idea that you can't work for a competitor for X number of years is just not going to cut it these days, especially considering how loosely 'competitor' is often defined as post-dot-com.

Though its rare, I agree with Taco on this one -- its getting to be yet another example of how tech companies are trying to stay afloat by using the legal system rather than by having any sort of sane business plan. Since it doesn't apply to me personally (right now) I must say I find all of this dot com implosion and the legal aftermath pretty amusing...Its just too bad its going to help drag the US economy into the shitter.

Tony Lee (2)

_ganja_ (179968) | more than 13 years ago | (#348016)

This kinda makes me wonder... There's a guy called Tony Lee who wrote most of the BGP implimentation for Cisco, this guy is good, his software handles the routing for 90% of the Internet. He left Cisco and went to work for Juniper networks and did the exact same job; he wrote Junipers BGP implimentation. Having a strong BGP implimentation enabled Juniper to compete head on with Cisco for the core router market. He has now left Juniper and is doing the exact same thing for a start-up router maker...

Is this Tony who is smarter than the average bear for avoiding such non-compete clauses or is it because Juniper and Cisco both rely on the stock options to retain key members of staff?

Contractor tactic - don't sign agreements (2)

Anonymous Coward | more than 13 years ago | (#348017)

I haven't signed an employment agreement for my past three jobs. It's very easy - take advantage of bureaucracy. Generally this is how I did it...

1) You have an interview and accept an offer. This is generally over the phone. Don't sign anything.

2) You land at the client site and do the stupid hand-shakes and the undergo the first day's round where they show you the coffee machine and where the restrooms are.

3) After you work for a few days, you get a call from the HR dept. of your contracting agency asking you to sign and mail your contract. Just ignore them.

4) You fax your timesheets, you get paid.

5) Once in a while, you get a reminder that you haven't sent your signed contract. Ignore them.

6) Quit when you're bored.

The reason this works is that, generally, contracts (for programmers, at least) are total crap. They aren't going to actually fire you over it, because they are making $$ every week off you. The worst thing that can happen is that they'll pester you, but if you manage your phone calls and emails properly, you can ignore them.

This is not just theory, I've done this for years. Trust me - they are too stupid and slow to catch up 90% of the time, because they have a shitload of paperwork to do every week to follow up on some contractor. For once, take advantage of bureaucracy, instead of being a victim.

In the worst case, they catch on to you, you just say you lost your paperwork, and sign it if they pester you too much.

Unless, of course, if you're too ethical. But then, is your agency? If they can fuck you, you can fuck them.

Re:Not really all that new... (1)

BAM0027 (82813) | more than 13 years ago | (#348018)

I'm not laughing. In fact, down deep in my heart, I'm dismayed by the prevalence of this thinking.

When I consider this from a social perspective, it's no wonder I feel less compelled to pursue "meaningful" relationships with people in the workplace. This is not across the board, but it represents a very capitalistic mindset, one that undermines a "handshake" agreement or a "verbal" promise.

You state that corps "can expect reciprocal loyalty" and I hold that true for myself, but I'm skeptical of the next person, and that's unfortunate.

I view this as one of the unexpected effects of today's burgeoning technologic society. People are increasingly interested in the "bottom line" of dollars more than the committment to relations. This is not everyone, but it is a dynamic that we struggle to acknowledge.

Re:Tony Li (2)

_ganja_ (179968) | more than 13 years ago | (#348019)

Opps.. Tony Li and he now works at Procket.

Re:unions... (2)

sql*kitten (1359) | more than 13 years ago | (#348020)

well gee, maybe unions aren't the terrible monsters people thought they were

Unions typically exist to prevent non-members working. That makes them half protection racket, half cartel. In effect, they're enforcing a non-compete which you didn't sign.

Let them try (2)

dswan69 (317119) | more than 13 years ago | (#348021)

I owe my employer nothing. I brought skills with me and I'll take other skills away. I won't copy their source code and I won't steal their algorithms developed through months of painstaking research, but if they try to cripple my ability to work I'll make sure their secrets are spread worldwide.

Most business idiots don't realise the stupidity of non-compete agreements and fortunately the people I work for know they'd be unable to hire anyone with any skills if other companies used these stupid things - the whole industry they work in would collapse in a year if we had non-compete clauses because no-one would be able to hire anybody with any skills, they'd have to hire janitors to do their coding.

Contracts (2)

AntiNorm (155641) | more than 13 years ago | (#348022)

#include <ianal.h>

Last time I checked, if you didn't sign a contract, you can't be held liable for its contents. And non-competes are contracts.

---
The AOL-Time Warner-Microsoft-Intel-CBS-ABC-NBC-Fox corporation:

Re:Not really all that new... (2)

Ronin Developer (67677) | more than 13 years ago | (#348023)

Bullshit.

Correct me if am wrong, but unless your position dictates that you have fiduciary responsibility, then you have no such responsibility. That's like saying you can't quit working at McDonald's to work for Wendy's because McDonald's will take a loss because they aren't flipping enough burgers.

As an employee, you do have the responsibility to protect your company's assets. But, upon termination, only protected information (trade secrets), are legally protected.

RD

Re:Not nearly so alarming corrections (1)

Lumpy (12016) | more than 13 years ago | (#348024)

rade secrets have no protection under US law. If you didn't patent it or apply the other IP protection systems to it then you are fudged when someone walks off with it. Got the recipie to Cocacola? start your own company.

Trade secrets are grey areas, you protect them from escaping. The law doesn't protect them because you passed on the legal protection schemes available.

Patents, yes you have to agressively protect them, or lose them. (This country rules when you look at the old laws, make the company do the work if they dont then it becomes public domain! it's the new laws that are written by morons and corrupt/bought poloticians.)

Re:unions... (3)

cyber-vandal (148830) | more than 13 years ago | (#348025)

Now you've done it. You'll get half a dozen posts about how union bully boys broke their dad's windscreen when he refused to join in the '50s. Or maybe about how unions keep crap people in jobs, forgetting of course that they also keep very good people from being crapped on by bad management. Or perhaps posts saying, if you're job's crap then get another, an option for everyone with school age children.
But remember, Time says unions are bad and Ted Turner wouldn't have a vested interest in keeping this particular opinion alive, now would he?

Keep your skills transferrable (1)

decesare (167184) | more than 13 years ago | (#348026)

IMO, it is reasonable to expect that an employer will not want you working for a competitor, regardless of whichever side ends the employer/employee relationship, and regardless of whether a NDA or NCA was signed or not. And even if it wasn't reasonable, if a former employer decides to sue you for working for a competitor, it's going to cost you money to fight it (unless you were savvy enough to get the new employer to agree to pay any legal bills that might arise from the situation), which makes any victory over that employer a pyhrric (sp?) victory at best.

That is one reason why it pays to not get too wedded to one particular problem domain. Each job that I've had, I've been working in a different problem space, and have learned something from each one. It's easy to do in software; I don't know how easy this is for other professions. In my experience, knowing the details of a particular language or OS seems to be more important to prospective employers than the specifics of the kind of work you've actually done in the past.

Re:Carefully Word Your Resume (1)

robbway (200983) | more than 13 years ago | (#348027)

Clarification: Make sure you avoid using trade secret training in your new job.

Also, In the contracting yourself thingy, you are self-employed, and anyone can hire you. It changes the type of corporation you work for and may or may not violate the non-competition clause. I have seen it used repeatedly by retiring military and government employees successfully.

----------------------

Inevitable disclosure... (1)

markmoss (301064) | more than 13 years ago | (#348028)

seems to apply mostly to people who can walk out of one company with the customer list and marketing plans in their head and go right to work in marketing for a competitor. Since I consider most executives and salesmen to be ethically impaired ;) to begin with, I can hardly disagree with the courts that they would mis-use their inside knowledge to the detriment of their former employer.

The only case cited where this concerned a technical job was the Allis-Chalmers case at the end of the article -- and that court simply enjoined the engineer from working on the same device he had been developing for the previous employer. Not too unreasonable...

Re:Not really all that new... (1)

PenguinDude (27312) | more than 13 years ago | (#348029)

When corps are loyal to their 'human resources' then they can expect reciprocal loyalty

I'd just like to say, this is entirely true. The company I work for practices this, and as a result I've stayed with them for the last five years (and look forward to many more). I enjoy working for the company, and I enjoy speaking highly of it. I could make more money elsewhere, but I feel that working for a company that respects it's employees, and treats them like people instead of "assets" is more valuable.

For a company to be successful, it must have good employee relations. Especially tech companies. It's unfortunate that so many companies don't believe in this simple concept, we'd all be much better off.

Re:Not really all that new... (2)

cyber-vandal (148830) | more than 13 years ago | (#348030)

It is sad, but that doesn't stop it being the truth. Corporations will do anything they can get away with in order to up the stock price or the bottom line. This is the problem, the stock market decides who has value and who doesn't. No CEO can afford to treat his/her workers as people if it impacts the bottom line, as the shareholders will crucify him/her. Until there's another way for corporations to raise money, this will always be the case.

Re:So? (1)

dswan69 (317119) | more than 13 years ago | (#348031)

This whole non-compete thing is ridiculous. I'm sure that same CEO wants to hire people with specific skills, preferably someone who has worked in a similar industry - where do they expect to find these people? I expect my company to treat me fairly, that means I won't divulge their trade secrets that they've spent time and money developing, I won't steal their source code (although I take my reference examples with me from job to job - since I brought many with me they'd have to be pretty underhanded to try to stop me taking with me further ones I've created during my employment) and I won't steal their customers, but if they try to screw me over I can hurt them and I will. My knowledge and skills go with me and I'll use them wherever and however I choose.

Now on the other hand if they wish to compensate me suitably that's a different story - my standard annual pay increase of 20% per annum, at least 1.5 times pay per year and an upfront payment of one year's salary, to make up for time and skills lost when unemployed, seems fair. If they're not willing to pay proper compensation then their real intent is to control and screw over their employees and I won't stand for that.

This Is How Unions (2)

zentec (204030) | more than 13 years ago | (#348032)

... get a footing in an industry. Not sure which is the lesser evil, but if these tech companies keep this crap up, their employees will be drawn to unionize and then they'll be dicked. I worked in a union tech shop for years. Talk about a productivity loss...

Re:Article refers to executives (and Microsoft) (1)

markmoss (301064) | more than 13 years ago | (#348033)

"trade secrets being used as patents" Not exactly. As far as I could tell from the article, the pump was still under development. Once they had it working, it would have been patented. But if a competitor was working on the same thing, getting a long list of "things we tried that didn't work" could have given them a six-month advantage.

Non-Compete agreements... (1)

scharkalvin (72228) | more than 13 years ago | (#348034)

Thanks to the NASDAQ's fall I was recently laid off from a job where I had signed a non-compete clause. Now in the letter that they had me sign in order to receive my severence they had me acknowledge that this clause was still in effect. IMHO if I leave on my own free will I SHOULD be bound by such an agreement. BUT if they let me go without cause (downsizing), well that agreement should be null and void. I have a right to earn a living. Now in my case I am sure that their interpertation of a competing firm is quite narrow, and I'd have to relocate to work for one of them (which I won't) so the agreement isn't going to haunt me. But I don't think an employeer should be allowed to have his cake and eat it too. If they don't want you walking out with the company trade secrets fine, but then they have to keep you employed, unless you are caught red handed in the cookie jar so to speak.

Courts and employees (3)

OmegaDan (101255) | more than 13 years ago | (#348035)

I'm glad to see the court system has found another way to fuck the citizenry in favor of corporations. It must have taken alot of vasoline to slip this one in. Is "protecting business" REALLY this important to us as a society? I've never seen as much crap as this -> Business needed a way to control employees who *DIDN'T* sign non-competes, and the court system responded by immagining a law and making it so.

What was most offensive to me was the suggestion that companies could pay some kinda fine or levy to make everything equal ... I'm some kind of *PRODUCT* that can be bought and sold? Didn't we have a civil war about that already?

Re:So? (1)

twinpot (40956) | more than 13 years ago | (#348036)

As others have said, non-disclosure agreements should be enforced. But, the only way any company has any right to stop me working in my chosen field, is to PAY ME for the time period during which they do not want me to work for the competition.

I have deleted non-competition clauses and never been questioned. However, in the countries I have worked in, these are unenforceable anyway (funnily enough, all of those which had NC clauses were US based companies).

Re:Not really all that new... (1)

klmartin (80562) | more than 13 years ago | (#348037)

While that might have been true at one time, this is changing quite rapidly. Its clear to anyone that follows business news these days that we're shifting to a completely "at will" employment arrangement.
Shifting TO? "Completely at will" has been the status quo in employment for quite a long time now. As my labor law prof was fond of saying, "You can fire someone for a good reason, a bad reason, or no reason at all." It's just that companies are being more ruthless in enforcing their rights (and employees' lack of them) than they used to be.

Re:Non-compete Clauses (California) (2)

CyberDawg (318613) | more than 13 years ago | (#348038)

Non-compete clauses do hold up in California under certain circumstances. A former employer wanted me to sign a non-compete that would prohibit me from working in the same field for two years. That won't hold up in CA, according to my attorney.

IANAL, but as I understand things, to be valid in CA, a non-compete agreement must have some form of compensation (the company offered a cash bonus if I'd sign it, so they were covered there), and must leave you with a reasonable way to make a living using your skills and knowledge.

They can't tell you, for example, "Sorry, Bubba, but you can't write code in Java for two years." They can, however, tell you, "You can't create a directly-competing transaction system compatible with our interface formats that would be sold to the same customer base."

Re:Most "secrets" really aren't all that secret (1)

fprintf (82740) | more than 13 years ago | (#348039)

But us sales/marketing guys still need to make a living, just like you techies. And we can't help that our memories are pretty good for remembering client details - like names, addresses, client relationships etc.

Essentially everything that the tech world complains about w/ regard to non-competes applies to everyone else. In many cases, the only living I can make is as a salesperson for a competing company -- sure, sales can be considered a portable talent, but many years are often wasted getting to know a particular industry, and that knowledge is not translatable.

Waht's so bad? (2)

Chacham (981) | more than 13 years ago | (#348040)

Screwing over your customers is one thing, but it sucks that they would jerk around employees too.

Sure, some overplay it, but some employee's *are* out to get their employers. I want some real numbers. What is the actual ratio to employee's who left any tech companies that were barred from any other job?

As the article mentioned, the real problem is not the law, its the non-technical judge applying them. We're in a new era, judges will catch up sooner or later. In the meanwhile, advocate knowledge of what does, and what does not infringe, but don't say the laws are bad.



---
ticks = jiffies;
while (ticks == jiffies);
ticks = jiffies;

move to california (1)

dbrower (114953) | more than 13 years ago | (#348041)

This has been discussed before, in the context of non-compete clauses. Turns out that the best state to live in is California, where such things are explicitly non-enforceable, as written into the California Code. Obtaining one of these "inevitable disclosure" injunctions would be much harder in CA because of this. Note that none of the cases cited in the article was from California. More reasons not to move to Seattle.

-dB

Cf. Football Transfers (2)

hattig (47930) | more than 13 years ago | (#348042)


This can be compared to Football Transfers in Europe (and presumably in the USA). In those cases the player is worth the money, in this case it is the employee.

Rival clubs can purchase the contract for a player from a club, and the player can play for that rival club instanty, even against their former club. There is no 'non-compete' clause, although it is possible for clubs to come to agreement between them during the transfer talks.

This is clearly another step towards corporate ownership of employees, and a step away from employee freedom of choice, in return for increased wages. However, we are in a knowledge based economy now (cf. skill in football), so the value is in the knowledge.

Imagine working for your current company, halfway through a contract, when a rival company approaches your company and offers them $100,000 for you (and your knowledge). If the company accepts, and you accept the wage terms of the new company, then kazow, new job. Former employer has recompense for losing your knowledge, you get the wages you want.

If you are wanted, that is!

In Europe, in football, a footballer, Bosman, left his club in order to join another club midway through his contract. His former club did not give up the contract though, so he could not play for the new club. This is how non-compete agreements were enforced by sly clubs who didn't want to lose their employees. However, the EU ruled eventually that footballers have the right to leave their club whenever they want, etc. Lots of mess, resulting in transfer fees now being "Training Recompense", etc to the new club. I don't know all of the details, I am sure someone else does though.

This is a GOOD thing. (2)

startled (144833) | more than 13 years ago | (#348043)

If employees could just move around at will, they might find better jobs with higher salaries and managers that don't treat them like shit. It could result in companies having to spend more money on the most valuable people to keep them happy. And the ones that weren't kept happy would start competing companies that would drive the costs of goods and services down, hurting the profits of the company that didn't treat their employees well.

Wait-- what's that you say? I'm NOT posting in the Large Corporate Shareholders forum? Slashdot? What's that? Hackers? Damn! Alright, where's the button to cancel this post, I can't let them see what a greedy, immoral asshole I am-- excuse me, dedicated capitalist, I mean. Ah, that looks like it, the "submit" button will erase this...

Re:Most "secrets" really aren't all that secret (2)

ChuckDivine (221595) | more than 13 years ago | (#348044)

As sjbe states, most "secrets" aren't. How to keep an business secret? Don't tell anyone about your business.

There's a funny story that has been passed around by science fiction fans that illustrates the folly of most "secrets." Back in the 40s, the U.S. developed the first nuclear weapons. The Manhattan Project was an extraordinarily well guarded secret. Harry Truman wasn't told about it until he became President.

Now, research into nuclear physics had been ongoing for some decades -- all in the open. The first laboratory chain reaction was observed in 1938. Scientifically oriented people were speculating about the possibilities of nuclear technologies (including weapons) for some years before the Manhattan Project started. But, when the project started, everyone who worked on it stopped making public comments about their work. But not everyone who knew something about nuclear physics went to work on the project.

In 1944, the magazine Astounding Science Fiction ran a story by an engineer/writer named Cartmill about a project to develop nuclear weapons. Cartmill (probably in cooperation with friends) independently discovered some "secrets" of the Manhattan Project. The open publication of these "secrets" caused quite a stir. The FBI even investigated. Fortunately for all involved, it was easy to show that the "secrets" could be easily discovered by any reasonably intelligent person who knew something about nuclear physics. The FBI eventually even approved newstand distribution (copies had already gone out to subscribers) so as to not draw attention of enemy spies to the magazine.

Incidentally, the U.S. government gave away the biggest technological secret of the 20th century -- that nuclear weapons could work. The U.S. government gave away that particular secret at Hiroshima.

Personally, I think secrets have a very short useful life. Things kept secret aren't some kind of magic that no one else can discover. "Secrets" are a part of nature that others can learn about just as easily as the original discoverer.

NDA's and Bagging Groceries (1)

daBum (191224) | more than 13 years ago | (#348045)

How do you keep someone from taking the experiences with them, like "x was a bad design choice because look what happened when we did it here, y worked better as a solution, and I'd do it that was from the beginning if I had another chance."

Maybe it's just me, but that sort of thing can't be prevented by either NDA's or non-competes. That's typically referred to as "experience", having learned from past mistakes... Everyone goes through that, and I don't think companies should be allowed (or even try) to stop such.

I agree that ex-employees shouldn't leave a company and take everything (or the vital core components) with them, but at the same time, there are some elements of "I wrote it, this is mine" involved. If you worked as a programmer for a company, and when you left you took a copy of the source code YOU wrote, especially if those are non-industry specific (i.e. screen formatting utils, disk retrieval bits, etc), there shouldn't be anything wrong with that. However, if you took the entire source code, including documentation (or, in some cases, all the documentation), that would be a problem.

Now, I understand that there is some middle ground in here. Your mileage may vary, see dealer for options.

But of course, that's not even my opinion, so I could be wrong.

Correction to Not nearly so alarming corrections (1)

O'Bunny (325700) | more than 13 years ago | (#348046)

Patents, yes you have to agressively protect them, or lose them.

No, patents are patents. You can choose to not protect them, protect them vigorously, only chase certain offenders, or even wait ten years and then go after infringers (can you say GIF?).

Trademarks, on the other hand, must be vigorously protected.

Re:How to kill inevitable disclosure - easy (1)

xantho (14741) | more than 13 years ago | (#348047)

Yeah, but then you'd get a law that excludes that situation. Companies both want the non-compete contracts, and they'd want their lobbyists with inside information, and I'm sure they're willing to pay for those two.

--Xantho

Re:Most "secrets" really aren't all that secret (1)

angst_ridden_hipster (23104) | more than 13 years ago | (#348048)

True. Even for government classified information.

Back in the day, if you needed to take some classified document home to work on it (which was pretty much impossible to do), you'd just have to go to the newsstand and buy a copy of Aviation Weekly (which everyone called aviation leakly). They'd have classified stuff in there all the time.

To get back on subject, companies tend to use the words "proprietary," "secret," and "intellectual property" in non-compete documents much as Microsoft uses the words "innovate" and "enterprise." It's when they're desperate, but don't know how to stop the pain.
bukra fil mish mish
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How narrow is your skill set? (1)

Anonymous Coward | more than 13 years ago | (#348049)

On my old job, we had to sign an agreement that we were not allowed to work at a competetive company for 5 years after resigning. This means that, If I, for instance, left my job because my boss was being an asshole, I could not get a new job for which I was actually trained.

Unless you elaborate on your specific training and job, I can't really take this seriously. There's a hysterical assumption here that any software job is classified as "competing" when it's not. Not one single example in the article dealt with a situation where there wasn't a direct market competition between the companies involved. So if you work in secure digital transactions, you don't get another job developing secure digital transactions. But you can go out and get another job, using the same programming languages you've been working with doing just about anything else in this huge rich market we call software.

The common thread that the article gave lip service to (without actually stopping their hysterical tone) is that non competes cannot (and mostly do not) stop you from getting a job in your field. If your field is computing, there are more jobs out there that DON'T fight for market share with your old one than those that do.

The marketing exec who they talked about leaving pepsico could do the marketing for almost any damn product in the world, but they got an injunction against him working on the marketing for two single product lines within a multi product company because those two product lines would be marketed in competition with the product marketing he had previously designed for Pepsico. Marketing expereince is pretty flexible, especially if you're way up in a major company. The non compete action was not going to stop him from working, it wasn't even stopping him from working "in his field". It didn't even stop him from putting his training and expereince to future use to be a more valuble employee to someone else. Just not in direct market opposition to them.

Kahuna Burger posting AC cause I killed all my cookies on this box and don't remember my password. :(

Re:Article refers to executives (and Microsoft) (2)

aburnsio.com (213397) | more than 13 years ago | (#348050)

This stuff really depends on state law, not federal law. I don't know about other state's laws, but I can speak for Texas (other states are broadly similar), and an example that happened at my last company.

A top executive at my last company had an in-row with the CEO and the CEO came out on top. While I won't go into the details, the executive was incensed enough that he went to work in a key position for a well-known and disliked competitor.

There are two legal issues involved in this case: the executive contract, and trade secrets. The executive contract didn't have a non-compete clause, and the executive was in his power to leave the company and work for someone else. No problem there. Trade secrets wouldn't be a problem because he just has to not reveal anything secret from the last company, right? Wrong.

In Texas there's something called the Law of Inevitable Disclosure. It means that if you work in a similar situation as a job involving trade secrets, as a part of doing your job you will inevitabley, even subconsiously, use the trade secrets and thus violate the law. It doesn't matter if you agree not to use the trade secrets; if you work in a similar job where those trade secrets would apply, you loose. And since trade secrets don't have an expiration date, you can never work in a position where the trade secrets would be put at jeporady. You could work in a different position, say if you knew the Coke recipie you couldn't work in Pepsi recipies but maybe in Pepsi sales. This applies to an executive, engineer, regular employee, contract worker, anyone employeed and exposed to trade secrets.

The moral of the story is: know the law. Get a good lawyer before you tick off people with good lawyers. If you're just an engineer and you work for a non-competitive company you're probably okay, but if you're an executive or if you're going to work in a key position at a competing company, you'd better watch out and cover your bases.

Why is screwing customers okay? (2)

firewort (180062) | more than 13 years ago | (#348051)

Taco writes at the end of the story,

<quote>Yet another example of tech companies being jerks because things aren't as pretty as they were a year ago. Screwing over your customers is one thing, but it sucks that they would jerk around employees too. </quote>

Why is screwing customers okay?

And if it's okay for the company to screw customers, do you really expect the same company to hold it's employees in higher regard?

A host is a host from coast to coast, but no one uses a host that's close

Livelyhood (1)

iplayfast (166447) | more than 13 years ago | (#348052)

If you program for a living, then they must prove that you are using their secrets in your programming. A company cannot deprive you of your livelyhood, just because they think you are using their secrets. Most courts would find that unacceptable. On the other hand, IANAL and if you are looking at slashdot for legel info, you might want to ask a lawyer for information about programming.

Re:Most "secrets" really aren't all that secret (1)

Topgun1 (261377) | more than 13 years ago | (#348053)

I agree. In actuality, it is very common for companies (I can't speak for the software industry) to get competitors products and reverse engineer them to see how they tick. How then is this different than leaving company A to work for company B? They both know what each others products are capable of because they have already deconstructed them, analyzed them and learned from it. That being said, what information can honestly be gained from hiring another companies' engineer?
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