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Seagate Says Ex-Employee Can't Work For Competitor

Posted by simoniker on from the knows-too-much dept.

deweller writes "According to a story at MacCentral, Hard drive maker Seagate Technology LLC is seeking a court injunction to prevent a former employee, Pete Goglia, from going to work for Western Digital Corp. any time in the next 2 years, saying Goglia knows too much about Seagate's hard-drive reading and writing technology to work for a competitor."

6 of 585 comments (clear)

  1. Non-Competes.... by Hanna's+Goblin+Toys · · Score: 5, Interesting

    These exist on the very fringe of legal contract law. I would be very surprised if any of them have withstood a jury trial. Can a legal agreement which prevents a worker from working to feed his family be legal? Non-competes are valid even if you are fired, meaning they can fire you and prevent you from working for a competitor, which is basically contractually enforced unemployment. This would seem to be highly UnAmerican(tm) and I think the courts would frown on it.

    What is the case law precendent?

    1. Re:Non-Competes.... by hendrik42 · · Score: 5, Interesting

      In Germany, this kind of contract is valid but your former employer has to pay the difference between the salary in your old job and the one in your new job for the 2 years. So, if you have a contract like that - be happy, quit your job and go back to school :-) If the contract does not contain a salary-difference clause like that, you can either sue the company into paying it anyway or you can just ignore the whole thing and work for anyone.

    2. Re:Non-Competes.... by Aneurysm9 · · Score: 5, Interesting

      Actually, I think in most states continued employment is not sufficient consideration for a non-compete clause. The theory is that it's unduly coercive because of the unequal bargaining power of the parties when one party controls the ability of the other to earn a living. Now, if you don't already have a contract and are employed at will, then your employer certainly could require a contract as a condition of continued employment and a non-compete clause as a condition of a contract, but if you already have a contract then some additional consideration is required for a non-compete to be valid and refusal to agree to a non-compete will not likely be viewed as justification for the employer to breach the existing contract and terminate your employment.

      --
      There was Cowboy Neal at the wheel of a bus to never-ever land.
    3. Re:Non-Competes.... by abb3w · · Score: 5, Interesting
      Non-competes are valid even if you are fired, meaning they can fire you and prevent you from working for a competitor, which is basically contractually enforced unemployment.

      I crashed a college engineering class where a contract lawyer was giving a guest lecture on the subject of NDAs and non-competes. He presented a compromise that several of his clients have used to modify the non-compete agreement to be more equitable to both sides. (I've got the boilerplate handout somewhere in my papers.)

      In the event an employee leaves his job, voluntarily or involuntarily, the non-compete kicks in. But the company must continue to pay his full salary so long as he submits to the company each month:

      1) Proof that the ex-employee is actively seeking employment in their chosen profession.
      2) Evidence (EG, a job offer from a competitor) that the non-compete agreement is the only thing keeping the employee from current employment.
      Each month you're looking for work and the non-compete keeps you from taking it, the company must send you your a check. If they decide they're sick of paying you, they may opt to include with the check a letter releasing you from your non-compete. You spend the month surfing in Australia instead of looking, you don't get paid for that month, but the checks resume afterwards.

      If what you and what you know are worth squat, your salary is worth the slight expense to keep you and your knowledge out of the hands (or brains) of the competition. If the company is worth squat, they'll be willing to pay this as reasonable compensation.

      Not all will--refusals generally come from the same ones whose HR trolls make you sign over every idea you've ever had or will have on anything relevant or irrelevant. Ethical companies will accept, or make a reasonable counter-offer-- so avoid the slimeballs, stick with the ethical companies.

      --
      //Information does not want to be free; it wants to breed.
    4. Re:Non-Competes.... by Rumor · · Score: 5, Interesting

      That doesn't mean that such clauses are not legally enforceable in Canada, or in the UK. There's a solid foundation of case law supporting the validity of non-competition clauses in both countries. Put very simply, the restrictions must be for a reasonably limited time, and must restrict using the specific knowledge gained from the former employer, but typically not restrict a person from using their general expertise in the area of research/development.

      The fact that your former employer dropped the suit could mean a lot of things, such as: they didn't think it was worth following through, even if they thought they could win; or, they realized there was a good chance a judge would find your non-competition clause to be unreasonable.

      But that doesn't mean it can't be done at all. These kinds of contracts do exist and may be legally enforceable.

  2. Strange... by Hanna's+Goblin+Toys · · Score: 5, Interesting

    When you say "horning in on your resources", do you mean that when GM fires a CAD engineer, they have the right to keep that CAD engineer from doing CAD for the next two years, thereby ruining his resume?

    That seems odd... thanks for the case law info though!