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Enforcing Non-Competes That You Didn't Sign?
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.
I hope none of you are thinking about going over to Kuro5hin ;)
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.
http://rareformnewmedia.com/
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!"
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
... 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."
IBM had PL/1, with syntax worse than JOSS,
And everywhere the language went, it was a total loss...
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
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.
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
"Blake is an idealist, Jenna. He cannot afford to think." - Kerr Avon, Star One, Blakes 7
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.
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.
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.
Without order, nothing can exist. Without chaos, nothing can be created.
"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.
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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?
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?
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Unions typically exist to make sure no worker is screwed thoroughly by management. In effect, they make sure you'll never be affected by a non-compete since you are very difficult to fire.
The reasons why unions prohibit non-members from working somewhere is to make sure that EVERYONE is PROTECTED by the union.
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A number of companies have tried to reduce consultants to employees and employees to serfs.
EDS was one. It hired people out of high-school, trained them in an "information tech boot camp", and charged them something like $5K (a couple decades ago) for that "training" if they left within six months. They paid them peanuts and no stock options, but picked up their medical expenses. Result: They'd be unemployable and at risk to life and limb if they left. Then EDS cut an exclusive - and finally merged with - GM, throwing thousands of contract programmers out of work there (unless they signed on with EDS, of course). Serfdom.
Ross Perot (EDS' founder) lobbied until the "safe harbor" provision of the tax code was changed, with the net result that if consultants (or their families) owned controlling interest in firm they worked through - even if it was incorporated - it would be treated as a front for direct employment. That combined with a tax court ruling treating their clients as "employers", making them liable for the consultants' income tax if the consultant screwed up on paying quarterlies. The result was that consultants HAD to be employees of corporations they didn't have significant control over to be employable in the auto industry. Near serfdom - you get to change farms and lords, but can't run your own show.
(I understand some of this has changes since then.)
Now we have Microsoft. If you are granted access to their internal code while working with their partners you have to sign a non-compete that takes you out of most of the software business for years afterward. If you work directly for them you get little or no experience with non-Microsoft software and if you leave they'll enforce non-competes - even terms you didn't agree to - to keep you from working anywhere in their space.
Who in their right mind, knowing this, will ever sign on with them?
I know there's a stereotype around here of Bill Gates as devil. But this makes it look like their employment papers grant them your soul.
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