Slashdot Mirror
CA Vs. MA In Battle Over Non-Compete Clause
Lucas123 writes "A case was filed with superior courts in California and Massachusetts involving a former EMC top executive who is trying work for HP. The case is throwing into relief Massachusetts's and California's differing approaches to non-compete clauses in employment contracts. California courts have argued that non-competes hamper a person's ability to traverse the marketplace freely for work, while Massachusetts courts say the agreements actually afford freedom to develop technology without the fear of IP theft."
In Australia, non-compete clauses are classed as restraint of trade, and thus illegal. Sucked in ex-EMC executive!
XML is like violence. If it doesn't solve the problem, use more.
But which is more important? Or actually: which state really has jurisdiction in this case?
Probably the State in which the contract was executed or otherwise specified in the contract.
Dual Opteron < $600
It seems IP doesn't only belong to the company- but also at least to some degree to the person who actually developed said IP. As it is located in his/her intellect and it is sort of difficult to remove without destroying it.
Not that this argument about IP works in the first place - this guy is an executive.
Prediction: The real iPhone killer is going to be sex robots from Japan. Think about it.
I hear Burger King has really strict IP rules around the secret to why "The King" is so creepy.
To some extent, both positions are right. To me, the problem is in how broadly do you define competitor. As an example, let's say I was doing graphics work for an MMORG. Clearly, working for a different MMORG would be working for a competitor. Working on CGI for an animated feature wouldn't be, at least to me. Would working for a different company bringing out a first person shooter, or turn based strategy game be working for a competitor? Personally, I wouldn't think so, but again, that could be argued either way.
Good, inexpensive web hosting
Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.
Give me Classic Slashdot or give me death!
Ask yourself this: which state has Silicon Valley? Which state is home to the vast majority of tech companies?
And which state is known for overreacting to animated LED characters by deciding they're bombs and evacuating the state capital over them?
By the way, this has already been answered in a previous Slashdot article. Someone has done the research: California's lack of non-compete agreements helped them become a center of technology in the US. Massachusetts' non-compete agreements helped ensure that no tech company prospered there. (The only company I can think of that was based in Massachusetts is Digital, and they died what, over a decade ago?)
The freedom to seek gainful employment should not be infringed.
While not a specifically enumerated right of the people, it is both expected that we work in a productive manner, and beneficial to the society in which we live.
The only way I could possibly agree with the enforcement of such a contract would be through compensation - have them pay his salary for each of the 12 months they expect him to be employed.
Even then, it deprives society of the good work he could be doing. Why should the government agree to such a thing?
It appears most of EMC is technically "located" in foreign tax havens (click Locations & Production). As such, I don't think the US Justice System should waste US taxpayer money enforcing EMC contracts. They like the low taxes in the Bahamas and Bermuda, let's see them protect EMC.
Hehe, you keep on whining about socialism, we'll keep on educating the best minds in the world at the best universities in the world. Between California and Massachusetts, I think we've got the top engineering universities in MIT, Berkeley, Stanford, and Caltech, not to mention some school called Harvard in Mass which I hear is pretty good. Unless this was some sort of crazy sarcasm, but if it is it sucks.
All your base are belong to Wii.
Florida pretty much does what you state. Generally the non compete clauses only hold water as long as the person remains employed. I do not know how a large lay off payment would effect this practice.
The general idea being that a contract must continue to benefit both parties. When the employee is no longer paid the no compete is dead.
Sounds good, but it sets up the following far too easily:
1) Get hired by a company that has juicy IP
2) Sign a non-compete with "keep getting paid" clause
3) Quit
4) ???? (here the ??? means do whatever you want)
4) PROFIT!
PS: I don't support non-competes. I just always wanted an excuse to post a .... PROFIT! post on /.
"HP is no more guilty than EMC when it comes to wooing talent from competitors. EMC has hired several HP executives, including Mark Lewis, former vice president of worldwide marketing for HP's network storage solutions group, who is now EMC's president of Content Management and Archiving, and Howard Elias, HP's former senior vice president of business management and operations, who is now president of EMC's Global Services and Resource Management Software group."
Hahaha silly EMC. At first read I could see EMC's argument but if they aren't playing by the same rules they are trying to get enforced then I don't believe this glaring hypocrisy will go overlooked.
All you touch and all you see is all your life will ever be. -PF
I'm almost always in favor of more open markets over regulation and control, so, IMHO, non-competes are stupid and a restraint of fair trade.
Sounds a little self-contradictory there. The non-compete was not part of "regulation and control"; it was part of a contract negotiated supposedly in good faith by both parties in an open employment market. If you think non-compete's are a restraint of fair trade, then I suppose your head asplode, because it's the regulations that forbid them and nothing else. Only government regulation is supporting fair trade here, not the open market.
Of course, those of us who aren't ideological fanatics and who realize that governments of the people are the only thing standing between us and outright slavery by corporate/military/religious/political overlords aren't a bit surprised. Governments that are too big or too small both lead to slavery, and finding a reasonable balance in between is almost impossible, which is why the phrase 'Situation Normal, All F***ed Up' was coined. :)
http://techdirt.com/articles/20071204/005038.shtml
Well as a tech worker, I certainly do not want to work in a state where I can be sued for switching jobs! Driving away developers certainly isn't going to help Massachusetts foster technological development.
Your solution does seem to be the best of both worlds.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
Uhuh. Or, alternatively, the company could hire lawyers who aren't complete morons, and they write up a contract which includes two termination options for the employer:
a) Termination with non-compete, including continued pay for the duration, or
b) Termination without non-compete
If the company believes you possess knowledge that would be truly beneficial to their competitors, they can go with option a. For your mythical con-man, he gets option b.
How on earth do schools have anything to do with socialism? Let me clue you in: schools are where people go to learn and get degrees. Companies are where people go to work after they get out of school. In the USA, in the tech sector, these places are rarely in the same places; instead, they're usually on opposite sides of the country. There's lots of great tech schools in places like Georgia, South Carolina, North Carolina, southwest Virginia, Cleveland Ohio, upstate NY, etc. How many big-name tech companies are located in these places? Approx. zero.
I went to school at Virginia Tech. Good school, but there weren't exactly a lot of jobs nearby. Most engineering students left the state as soon as they graduated. The state and local governments complained about it all the time, even trying to set up and promote some stupid "Virginia Technology Corridor" in the southwest for a while. It was funny driving along some rural road and seeing a sign proclaiming "Now entering Virginia's Technology Corridor" and seeing falling-apart trailer homes scattered around. I believe they finally gave up, after they realized that making up a silly name wasn't going to magically attract tech companies to backwoods Virginia. (For those unfamiliar with Virginia geography, this was in the southwest, about 6 hours' drive from Northern Virginia where there actually are some tech companies, especially ones that work with the government.)
Just because some place has great schools doesn't mean that students are going to stick around when they finish. They're going to go where the money and jobs are.
That sounds like an intelligent solution, it'll never work.
My wife went through a law suit a few years ago for this... The Non-compete was eventually deemed unenforceable.
Basically what they determined, is that the basis of a non-compete, is that the employee would be bringing something of value (which was obtained from the first employer) to a second employer, putting the first employer at a disadvantage...
However, since my wife was laid off, it was determined that by laying her off, the first employer essentially deemed that she was no longer of any value to the company... Therefore, since her status was classified as not having any value to first employer, her employment by second employer does not place the first company at a disadvantage, because they already deemed her services as being not valuable to them.
So basically that means, if you leave on your own accord, it may be enforceable.. But if you are fired or laid off, you cannot be held to a non-compete (In the state of Washington anyways), because by terminating your employment against your will, the company is admitting that you no longer possess anything of value to the company.
Because that's what it really amounts to. Spend more than a few years at a company, get really good at what you do. Then, if the company pisses you off, you are faced with three options:
1) Bend over and take it.
2) Completely change your profession, and start from scratch. All knowledge you have acquired has been rendered useless.
3) Be unemployed for the term of the non-compete.
Alright, so it isn't quite slavery. You're not caned if you stop working for the master. But it's a damn risky proposition to actually stand up to any abuse.
Is any more proof necessary that overzealous IP laws will strangle our economy? As someone else pointed out, Silicon Valley is Silicon Valley because talent is free to move between companies.
Those who can, do. Those who can't, sue.
In that case, it appears socialism isn't working out too well for the east-coast states, since they're investing a lot of money into education, only to have all their graduates flee after they graduate.
Well, given how Silicon Valley is vastly more important than Boston (which used to have parity), you can see which approach is more useful for technological advancement.
No, I don't trust in god. He'll have to pay up front, like everybody else.
I work for a California company, and they had me sign a non-compete. I asked them why considering that California courts will not enforce them. Response from the legal department--just in case the court changes their mind.
"Where is my mind?"
That sounds great in theory.. Problem is, the non-compete still forces you to avoid any job that could in any way compete with the company you work for (which is to say, anything involving your skillset). So they can continue to pay you incredibly low wages to keep you from working for anyone else, even if you quit. This keeps you from looking for a better job, and in some cases would prevent you from getting a job after you're laid off (though you would at least get some amount of money for continuing the non-compete).
I'm not trying to form an opinion about who was right in your wife's case, but wow, that's a really bogus interpretation of why a company would lay someone off.
Taking the employers pov...
Just because I don't have enough money to continue doing R&D, doesn't mean that my engineers don't possess valuable information that I already paid for and that is rightly my trade secret.
That being said...
Non-compete contracts are usually written in such an overly-broad manner that I consider them to be garbage. If a company has a legitimate cause of action against a former employee transferring proprietary info, then let them make the case and be subject to a penalty if they lose.
I believe silicone valley is a bit south of where you were intending to refer. And they're not really into tech, but the IP is pretty entertaining nonetheless.
(Sorry, that one was just too easy)
Is it just my observation, or are there way too many stupid people in the world?
Look at it another way. The company choose to stop paying your wage... therefore the information or job you hold was not worth enough for THEM to keep paying for so it shouldn't stop you from getting another job with those skills. And again... they stopped PAYING you for your information so why can't you go elsewhere too.
Courts are usually very civil on these things in terms of keeping a person working. Even in the case with IBM and Apple, Apple was able to give the guy a token job "on the couch" for 9 months to fulfil the non-compete obligations...but again the guy still got a paycheck during the time and that's what keeps the judge happy.
Just because I don't have enough money to continue doing R&D, doesn't mean that my engineers don't possess valuable information that I already paid for and that is rightly my trade secret.
Sucks to be you. You either keep them on the payroll or deal with losing them.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
If a company has a legitimate cause of action against a former employee transferring proprietary info, then let them make the case and be subject to a penalty if they lose. Do not confuse a non-disclosure agreement with a non-compete agreement :)
That being said, if you elect to keep some engineers on staff, you are admitting that those engineers have higher value to you, than the ones you let go...
When you let them go, the services they provide to another company is worth less to you than those that you kept employed. It is not the employees fault that you don't have the money to pay them, that is your problem. That essentially what was ruled. Employee has a right to work, you cannot deny them that right.
I know people hate car analogies, but that attitude is like saying, "I can't afford to buy this Vette, so therefore NOBODY will be able to buy it"
If you don't want "secrets" to leave the company, that's what non-disclosures are for.
Which is why housing is so cheap in Massachusetts and California.
It brings to mine Yogi Berra: "no one goes there anymore. It's too crowded."
Trade secrets are actually another area of law, and are already covered by various laws and penalties.
I was going to moderate on this discussion, but the hell with it.. I agree most non-competes are garbage. However, I have always signed someone else's name when requested to complete one (at least half a dozen times). No one ever checks the signature! I wonder how that would work out in court - "Hey, I didn't sign this! Someone named Frank Drakman did!".
What was once true, is no longer so
Yeah you make a VERY important distinction. I have no problems with a non-disclosure agreement and in most situations no problem with non-solicitation agreements, but I think almost ALL non-competes should be invalid. Unless you are selling your company and signing a non-compete with very specific criteria I really think the idea of a non-compete is unfair on its face. Unfortunately I learned the hard way that Ohio is very pro-employer when it comes to interpreting non-competes and because they almost put out on the street once I will NEVER sign another one. At my current employer I don't even have a formal non-disclosure agreement, just some vague language in the employee handbook that I have to sign each year.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Here's a car analogy: your company buys a car and is happy with it, but a bit later times are tough and it can't afford to own the car anymore, so it puts it on the market. Somebody else buys it, and when they want to drive it, the company lawyer claims they can't drive it, because it's the company's car...
It's the same with people. When your engineers are let go, they go on the market and whoever buys them, so to speak, can drive them. If you argue against this, then you are effectively arguing that people have no right to go on the market, which certainly goes against their human rights in any civilised country.
ever since my wife's fiasco with non-competes, we make sure to not sign them to avoid the hassles. My wife has since moved on to another company, and they did not flinch when she declined to sign the non-compete. (They didn't even ask her to sign the non-compete until like a week or two after she started)
A part of me wonders if someone did sign it, and if a company states that signing it is a requirement for continued employment, if that's considered signing an agreement under duress?
A part of me wonders if someone did sign it, and if a company states that signing it is a requirement for continued employment, if that's considered signing an agreement under duress?
That depends on the appropriate labor laws. If they're "at-will employment", then no. Employees can quit or be terminated at any time, for pretty much any reason.
Yeah, because MITRE, Raytheon, Biogen, EMC, iRobot, Akamai, Analog Devices, Tyak, Varian, Millipore, Textron have all fled Boston for Silicon Valley.
Several of them are defense contractors, so if you aren't in the defense industry, they're not going to be household names. Many of them produce foundational tech or infrastructure--you never heard if it because it's not a consumer brand name, but your house or car or computer would be so 19th century without it.
It's not a great claim for MA, though--many of those companies have satellite offices all over the country and just keep the corporate HQ in MA. The work is done elsewhere.
---dragoness