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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."

18 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 CountBrass · · Score: 5, Informative

      In the UK such contractual clauses are explicitly null and void: it's called restraint of trade.

      --
      Bad analogies are like waxing a monkey with a rainbow.
    2. Re:Non-Competes.... by dcgaber · · Score: 5, Informative

      I know in California, except for very limited circrumstances, these contracts are indeed unenforceable. Specifically, I refer to:
      CAL. BUS. & PROF. 16600 "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."

    3. Re:Non-Competes.... by BJH · · Score: 5, Insightful

      So... someone who's spent the last however many years designing new hard drive technology is supposed to throw that experience away and get a job at McDonalds or something for the next two years?

      Why don't you just all sign yourselves into voluntary slavery. Oh sorry, it seems that you already have...

    4. Re:Non-Competes.... by bjschrock · · Score: 5, Informative

      From what I read from the article and from what I remember about signing my previous non-compete agreeement with Seagate (if his was worded the same way), they aren't trying to prevent him from working at Western Digital, just the read/write head division of WD. The way I understood the clause and had it explained to me was that you can't go to work for a competitor and work on the same exact thing you were working on at Seagate. So I don't think they would have a problem with it if he went and worked for WD in some other division, say firmware development or testing.

      I think WD should hire him and put him somewhere else for the two years, then move him over to read/write if they want. I think it's fairly reasonable that Seagate wouldn't want him working on the same stuff he was doing for them just a few weeks ago. It's almost impossible to expect that at least some confidential information won't be disclosed.

    5. 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.

    6. Re:Non-Competes.... by Jack9 · · Score: 5, Informative

      I believe one of the requirements for a valid CA non-compete is the specific listing of the companie(s) you agree not to seek employment with. A self-restraining order, in effect.

      --

      Often wrong but never in doubt.
      I am Jack9.
      Everyone knows me.
    7. 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.
    8. 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.
    9. 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. Pete signed a confidentiality agreements by usefool · · Score: 5, Informative

    According to this article, he did sign something.

    --
    Uselessful technology (Air-Charged
    1. Re:Pete signed a confidentiality agreements by Todd+Knarr · · Score: 5, Insightful

      He signed a non-disclosure agreement, not a non-compete agreement. If he'd signed a non-compete, Seagate is entirely in the right here. With just an NDA, though, the burden's on Seagate. Without a non-compete, they can't prohibit him from working for WD period. All they can do (and it sounds like what they are doing) is claiming that if he works for WD then violation of the NDA is inevitable. The burden's on them to demonstrate that, but that may not help him.

  3. Re:Valid in California? by TrumpetX · · Score: 5, Informative

    I know in Indiana they have what is known as "at will employment." While companies can make non-compete clauses, the employer can not make it stick.

    My old company sort of worked around this. They had their customers sign "non-compete" clauses. We had a guy quit and apply for a posision at one of our customers. My old firm found out, sued the company, not the individual, and won.

    I think they settled though, the company agreed to continue purchasing a support contact for XX years (i.e. to show that they weren't hiring this guy to replace their contract.)

    Don't know if CA is "at will" or not *shrug*

  4. 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!

    1. Re:Strange... by ultranova · · Score: 5, Insightful

      Why not? Why shouldn't private parties be allowed to enter freely into contracts, and be allowed judical recourse to enforce them?

      Because one party (the employer) is much more powerfull than the other (the employee), enough so to be able to force any kind of contract. The corporation can survive for a long time understaffed, but the employee cannot survive long without eating.

      Consider this:

      Suppose you've been to an accident and badly injured. There's a number of people around, and they offer to call an ambulance if you agree to be their slave. What will you do ? Not much choice here - you either become their slave or die.

      Then, when Slashdot publishes a story, someone comments that "hey, he agreed to that contract freely, no one forced him, and if he thought it unfair he should have asked someone else for help !". Never mind the fact that no one else offered anything better...

      Should this contract be enforced ?

      Developed economies' success centers around contracts and their enforcability. Without contracts, there is chaos.

      Developed societies are based on the rule of law. If contracts take precedence over law, law has no meaning (because someone will always be strong enough to coerce others to sign). Therefore, a developed society cannot allow the stronger to oppress the weaker without any limits on the excuse that the stronger managed to force the weaker into signing a contract. To allow this to happen would be to switch the rule of law into the rule of strongest, which be a huge disbenefit to most members of the society (everyone but the rich and powerfull).

      No matter how difficult this might to for some people to realize, the society does not exist to help them profit. It exists to protect it's members. This means the real people, not corporations. Therefore, it is the function of the society to protect the real human beings from the predations of corporate overlords, not to protect the profits of corporations by allowing them to prey on humans. Enforcing a non-compete deal means helping a corporation prey on human beings (its own employees) to protect its profits from its competitors, and is therefore unacceptable.

      A government should always prefer real human beings over corporations or any other organizations. If it does not, then it is corrupt, and should be removed from office, by force if neccessary. Because the courts simply interpret the laws made by the government, having the courts pass decisions favoring corporations over humans is equal to having the government do so.

      Economy exists to benefit the people, not the other way around.

      The height of dishonesty is people who sign contracts that contain clauses they disagree with with the attidude "its unenforcable, so why do I care." If you don't agree with the contract and agree to abide by its terms, don't sign it.

      The bottom of the cesspool are the people who use the weaker position of others to get them to agree on outrageous agreements just for a few dollars more, and then call them dishonest when they try to free themselves from this bondage.

      By the way, I am in a technical field, in a senior position, and I did refuse to sign the non-compete. My reason? Nothing about it appeared in my offer letter, they sprung it on me during the orientation process. So, I didn't sign, and said that it was never part of my employment agreement. They never agreed with my point, but didn't fire me (which they knew would land them on the wrong end of a wrongful termination suit, since the non-compete was never mentioned in my offer letter), and the whole matter dropped (over a year ago).

      Then you are either lucky that your employer is such and idiot that he didn't do things in the proper order, or unlucky that your employer is smart enough to realize that the courts will propably enforce a noncompete clause even if you didn't sign any. In either case you have no moral high ground to stand on and condemn those less lucky than you.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

  5. I'm bad by vurg · · Score: 5, Funny

    I was such a bad employee that my ex-employer forced me to work for their competitor.

  6. Re:Why only in IT? by MmmDee · · Score: 5, Informative

    I belive a non-compete clause, such as ones alluded to here, exist in a number of industries. Speaking as a physician and member of the medical community, most of our contracts have non-compete clauses that state, in effect, "Upon leaving The Practice, you will not practice within your specialty in a similar hospital/clinic located within 5 miles of any of The Practice's locations". Of course, in this field it's so as not to "steal" patients (and therefor business) rather than technology.

    --
    No man's an island, unless he's had too much to drink and wets the bed.
  7. Re:Non-Competes.... completely wrong by mqx · · Score: 5, Informative

    In the UK such contractual clauses are explicitly null and void: it's called restraint of trade




    You are completely and utterly wrong. The circumstances in the UK are similar to most of the rest of the western modern world: appropriately scoped non-compete agreements are allowable and enforceable. What "appropriatley scoped" means all depends upon the circumstances and nature of the work, but for R&D employees working on new technologies, 12 months is not uncommon.