Slashdot Mirror
Non-Competing With Microsoft
MrWeird writes: "I just found this and this over on Yahoo News. Apparently, Microsoft has been threatening a startup called Crossgain to sue them about noncompete agreements of former MS employees they had hired. The company had to let go 25% of their staff including CEO and two founders, all former MS employees. The second Yahoo article has a good point about how to MS, "the competition" is almost every software company out there." I don't think Microsoft's actions make much difference in the larger scheme of things, but I found this interesting because so many people sign non-compete agreements without really thinking about the consequences. Have you signed one? What do you expect to do when you leave your current job?
First, always read employment contracts before signing them. If an employer doesn't want to give you a chance to carefully review the contract or have your lawyer look over it, assume they're trying to pull something sneaky. If you think you really must sign a non-compete, make sure it's very limited in scope.
If you work with computers, chances are that it's very hard to find a job doing the same thing you do now without it competing at some level.
For instance, most of my work over the past several years has been building stuff for use on websites. With a broad non-compete, that means the competition is any company that has any kind of website at all (since the competition is for user attention). There's no way I'd sign an agreement to not work for companies with websites for 2 years after leaving a company; I'd be out of work for 2 years.
Currently I happen to work for a dating site. If the offer to work at this dating site had been attractive enough, I might have been willing to agree not to work for another dating website for 6 months after leaving.
Also, overly broad non-compete agreements probably won't stand up in court because they can restrict you from working in your chosen field at all. So MSFT may not be able to win this suit since they're regarding all software companies as competition. That kind of employment law can vary a lot between states, though; I'm most familiar with California's and I am not a lawyer.
Assume any contract you sign can be upheld.
Most of the time, non-compete clauses are -ignored- by the company that secured them. They know as well as anybody does, that one year out of the marketplace is like never having been there in the first place
however, in this case MS decided to pursue their contracted rights with these people... why? Is it because Crossgain actually produces something that MS fears? No, because Crossgain doesn't do anything audible yet.
my vague guess is it's because Crossgain is so quiet about what they do, they were actually hoping to get Crossgain to stand up in court and say "we're not competing... look what we do is XYZ what they do is LMN, there's no overlap, let our people go." Unless of course MS got some inside information about what they DO do, and know that it is serious competition, then it's more old bag...
I don't appreciate predatory corporate practice, but I also don't think that a company the size of MS has the -time- and -energy- to pick on start-ups for sheer orneriness. I guess the 3rd option is that one of these employees parted with MS on REALLY bad terms and somebody wanted to stick it to that person... *shrug*
Usually a non-compete that is that strict is not enforceable. This problem has been around in my field (electrical engineering) for a long time and in court they usually don't hold up. They can't keep you from making a living in your profession no matter what you sign. In the case of microhole, if virtually every software company is a competitor then you cannot earn a living in your field under that no-compte. About the only time I have seen no-competes upheld is when you leave to work for the other company and you are doing exactly the same thing for that company with a similar technology. Then what is usually upheld is the use of what is deemed proprietary information (other than IP which is inforced by non-disclosure and patents). That would be like you develop a technology for company A and then go work for company B that wants to same technology on their process. You would not be able to use any knowledge gained by your experiments or mistakes to develop the same technology at company B. Everything you learned at company A from you work (remember, not counting IP) basically never happened. It is very hard to prove and enforce. Unfortunately, that little company of 80 employees probably can't afford the court fight against microshaft, which is sad.
Oh, that's just a myth. The legend is that it was an Italian architect who had his eyes gouged out. In any case, it didn't happen.
--
--
The internet is the greatest source of biased information in the history of mankind.
After a while, Microsoft just really ticks me off
Why don't they do something like patent pollution? Then they could sew all the polluters on the planet for patent infringement. And make a mint on the licensing fees
I swear, every time I start to relax about MS, they go and do something to wind me all over again
[/rant]
Standard Disclosure: IANAL
Excellent tutorial on non-disclosures here, and here
Non-disclosures are different from noncompetes:
Excellent discussions on noncompetes here
Special Note: In some states, including California, noncompete agreements generally can't be enforced against employees. The problem is that because noncompete agreements come in so many shapes and sizes, and because you've got very conflicting societal interests, the courts tend to analyze these things on a case-by-case basis, which means predictability is very low.
There is also this interesting site:
www.breakyournoncompete.com
which has an agreement on the front end.
I am sure there are others out there as well.
"It is a greater offense to steal men's labor, than their clothes"
I could tell you if I have a non-compete agreement with my employer, except that I'm under non-disclosure. Actually I don't know if I'm allowed to disclose the fact that I can't disclose anything. Hope the boss doesn't read /.
What got me from reading the article is that yahoo didn't have any idea what they were doing. So if it isn't know what they are building...how does M$?
If M$ is snooping into "corporate secrets" could M$ be taken to court for theft or something. I have a non-compete agreement with my employer, but it only appllies to things I do for them. And it was modified to stipulate that previous work I did was exempt from this agreement. With a small company that does not do allot of different projects I saw this as no problem. I don't think I could bring myself to ever work for the borg though..ehhe
If ignorance is bliss, the world is full of blissful people
This is not Microsoft expecting to win a legal challenge - this is Microsoft banking on the knowledge that their lawyers are bigger and scarier than yours.
This isn't law, this is legal intimidation. This is abuse of a position of power.
... and today's pet project has
The head geek at a notorious gaming company I used to work at got a BIG FAT kiss off. They gave him pretty much everything he asked for, and he asked for a LOT. He even asked for the hundred-odd AAA batteries he had in his office (I think it was for a Palm or something).
A not-so-31337 geek left the same company about a month later. They sat down and asked him what he expected in his severance package. He said "I think I'm worth around half of what [head geek] got."
They laughed him out of the room. Laughed out loud. I believe he got SFA for a package, as a matter of fact.
What have we learned here? That people who can help you the most, that are the most valuable to you as partners, are the ones you try REALLY hard to keep happy when they leave. Because they know your secrets. And they probably went to school on how NOT to run a company by watching you (the management) fuck up over and over again...
Yes, you have a point that you need to read contracts before you sign them. However, the situation is not nearly as as simple as you make it out. Often a individual worker (yes, even a technical worker) negotiates from a position of weakness.
The company will get along just fine without you, but you may find yourself in serious difficulty without work. There are things you can do to lessen this equality, such as look for new jobs before you've left an existing one, but the fact remains that large numbers of people do not have the luxury of negotiating employment contracts.
There aren't any strong unions or even trade organizations in the technology sector, as their are in other more mature industries, to overcome this fundamental inequality. So yes, it's a noble idea that you don't have to sign a contract you don't agree with, but it doesn't always work that way in practice.
Just because some people are temporarily enjoying high salaries and a scarcity of competition for their jobs doesn't mean the system actually works.
I haven't let myself get bound by non-compete agreements yet, but doing that has meant making sacrifices on my part and in many cases it would have been easier for me to just go along with things and maybe live by the agreement or just assume "they'll never know". It's a tough decision to make, and one I'm certain most techies (who often lack sophistication business and legal wise or more accurately do not care about it as much as they do the tech) have not put enough thought into.
Crossgain was not your normal startup. It was started by a couple of heavy hitters from M$FT. Basically some of the chief architects of ther XML/.NET strategy. They built it for Microsoft, then left and took a bunch of thier developers. Basically they were (are?) building an outsourced XML integration server (kinda like BizTalk server) on Sun/Java/Oracle kit. Not real Microsoft friendly! Bill said NIMBY (Not In my Back Yard) and squished them like a bug. They have about $10m in funding and unless they get more from Sun the well has dried up. No VC fund will touch these guys with a 10 foot pole.
I joined a startup this summer and got a pretty good deal with lots of stocks and didn't have to sign any non-compete contract. But as the company grew the board suddenly saw the risk and when it was time for handing out stock options to all employees they added a 6 month Non-competing clause (after quitting) for receiving the options.
The options deal weren't that good (compared to the stocks I already had) so I was close to not signing it. But as I realized I would be the only one saying no to "free" options I signed it just to not look disloyal and likely to leave. Just to not rock the boat, I guess. Still not sure if I did the right thing.
I worked for a company that hit me with an n-c a few months after I started. (Which, btw, violated the terms of my contract, but anyway). The sad thing was it had like 27 different points on it, of which 3 were totally illegal, and were actually case examples from one of my first year law courses. Let's just say head office was still living in the sixties.
The main point of n-c's these days is the threat factor. It may be illegal ... but what individual has the money to fight M$ in court?
I've worked at MSFT, through a contracting firm, and MSFT is part and parcel of this problem. If they insist on non-compete agreements themselves, either directly or with a sub-contractor, then they have only themselves to blame for the problem.
That said, I think non-competes are pretty much a waste, as opposed to non-disclosure agreements, for anyone other than senior execs. You just shoot yourself in the foot for future referrals and good will.
--- Will in Seattle - What are you doing to fight the War?
The way it was explained to me, your employer has a right to expect you to not give confidential information to a competitor, even after you are no longer employed by them. But no contract can take away your right to an honest living in your trade.
For instance, if you take code or business plans with you to a new employer, that's a no-no. But if you just take your Mad Perl Kung Foo, well, there's nothing your former employer can do about it, even if you are going to a competitor. And even if they paid for training to develop your skills. You own the general skills; your employer owns the actual work that you did for them. (Well, there is one thing they can do -- pay you your salary for the length of the agreement, so you can sit on your ass and do nothing...)
And if they threaten nasty stuff, get a lawyer and give it right back to 'em: in most cases, those agreements aren't worth the paper they're printed on.
From what I learned then, such clauses have two competing features. First, its difficult to enforce them. A contract which takes away a persons ability to earn a living is invalid. That's the good news.
The bad news, as pointed out by my attorney, is that the threat of legal action itself may be a deterrent to getting hired. No matter how narrowly the clause is written, it might be construed by a potential employer as a lawsuit waiting to happen, and whothehellwantsthat.
What's a sig?
Don't have a fax? Maybe the local copy shop downtown will allow you to receive faxes for a fee. I've known drug stores where I received faxes regularly.
Read the contracts thoroughly. You want my best advice, no matter what it says, take it to an attorney.
Make it clear to your new employer that you're going to be paying to have an attorney review their contracts, and if they make any changes later you're going to have to consult an attorney again. If they give you a hard time about this let them know that you'll be billing them for the additional expense.
Now, it's very important that you've asked up front for your contract. If the contract hasn't arrived before the day you're to start work, call in and say you can't show up because you haven't had an opportunity to see the contract. Tell them, as earnestly as you can, that a contract is a serious commitment between you and them and you wouldn't dream of signing one without reading it first, at home, without them watching you, and having access to an attorney.
If they give you a contract you haven't seen before when you arrive, inform them that you'd made clear your desire to review any contracts ahead of time and walk out.
If they're really worth working for, they'll get you the contract to review. If you're the kind of person for which it would really be an issue to have a non-compete agreement at all (exec, high-level engineer etc.), then they're not just going to let you go work for someone else after you've made it clear they insulted you and tried to deprive you of your right to make informed decisions about your own future.
Did you get the job through a headhunter or contract employment agency? You should know that they're paying, at minimum, 30% of your first year's salary for the headhunter's fee to hire you, or 30% of your hourly rate to the agency for the entire time you work (not just the first year). Consider how valuable you must be if they're paying this much for you, so really it's not that much to ask that you be completely informed before showing up to work.
To make it crystal-clear: Your decision to accept the job or contract should be based in part on full information about the contracts you will be signing. Do not make this decision until you've read the contract. Tell them that acceptance of their offer letter is conditional on reading their contract first.
I'm not kidding about this and this is not a troll. I really mean this and I'm speaking from hard experience. I've been a software engineer for thirteen years now and have been running my own independent consulting business for almost three years (by independent, I mean I don't work through agencies, so I'm on my own when I sign a contract).
You think you really need a job? Tired of flipping burgers - or think that's what you'll be doing if you don't sign? Thimk of the months or years of misery that will result if you make a rash decision right from the start. Not only will you regret it, but you may lose tens of thousands of dollars as a direct result of taking this job, rather than turning it down and finding another, or negotiating a better contract.
There's something called "opportunity cost" that many managers know about but not a lot of regular employees. It is the cost of losing the opportunity to do something else. You may think you've gained by getting a job, but you may have lost far more by not turning it down and taking a different one, or getting rid of that noncompete so that when this job is done (and no high-tech job lasts forever) you can get the rewarding job of your choice.
Michael D. Crawford
GoingWare Inc
-- Could you use my software consulting serv
After Posnik Yakovlev completed Saint Basil's Cathedral in Moscow, Ivan the Terrible had Yakovlev's eyes poked out so he could never build another building to compete with St Basil's beauty. Now there's a real do-not-compete clause. You kids these days have it easy.
Read the rest of this comment...
Carousel is a lie!
I'm currently working at a real estate place, just. When I started I had to sign something saying I wouldn't steal any clients when I left. I'm the IT Manager.
In Georgia, we have a 'right to work' statute. It boils down to that non-competes essentially are meaningless, as no one can restrict your right to work for whomever you wish. I signed one at the first place that I worked in the IT field, and even the company's layer, who was one of the owners, admitted that it wouldn't hold up in court.
Of course, the flip side is that a company can fire you for any particular reason, as long as it doesn't violate any Federal statutes.
If you can't beat them, embrace and extend them.
My advice to all the young people I meet today is: don't sign anything. They'll come after you with big words and pretty ladies, but don't give in. Don't ever let them take your signature. Once they have your signature, they can start extracting things from your bank account, and soon you won't have anything but your social security check to fall back on. And then where will you be?
I haven't signed anything in over thirty years. When the UPS guy comes to my front door with a package slip for me, I hide in the shrubbery. When bill solicitors show up demanding compensation for overdue ballances, I pretend I'm Swiss and don't speak the language. They've cut off my gas and water a couple times, sure, but that's the price you pay for true freedom in this country.
Don't sign anything. Just trust me on this one.
Read the rest of this comment...
I refused to sign my contract for ~3 months when I was temping at MS.
They nagged but I still got paid.
Eventually I found a better job.
Never did sign the new contract.
It asked me to waive all rights to take legal action against MS.
--Shoeboy
This is so bogus given that while I worked at Microsoft as a contractor several years ago, it was common knowledge that MS poached talent from competing companies by offering the lead developer money to leave that company with no notice and taking as much of their work with them as possible so as to cripple the company's marketability.
- tokengeekgrrl
"The spirit of resistance to government is so valuable on certain occasions