Re: Crossgain Fires a Quarter of Its Employees

From: Chris Olds (
Date: Tue Jan 16 2001 - 11:48:45 PST

On Tue, 16 Jan 2001, Gordon Mohr wrote:
> Does Washington state look more kindly upon non-compete clauses than
> California?

Yes, much. California does not allow this type of enforcable non-compete
agreement, and Washington does.

> Seems like there must be more to this story, to explain Crossgain's
> capitulation. Something along the lines of (though I don't know any
> of these to be true):
> (1) Washington state's more pro-employer laws in this matter.
> (2) MSFT's especially clever employment/confidentiality contracts.

I can only talk about these two, but WA allows the enforcement of these
clauses, and Microsoft has done this before (and won). The case that
comes to mind first was a marketing manager in the language group that
went to Borland (back when this seemed like a good idea); MS sued to
prevent him from working there, and got relief in the form that he
couldn't work in Borland's language marketing until the non-compete
expired (which may have been two years, not one, IIRC).

When I worked at MS, I crossed out the part of the employee NDA (yes, it
was 'just' a clause on the second page of the NDA 12 years ago) that said
that I agreed not to work in a business that MS 'competes in, of
contemplates competing in' for a period of (I think) 2 years. They never
said anything, but I'm not sure they noticed either. I've seen more
recent versions that also preclude taking a financial interest in
competing companies, so someone must believe that these are enforcable.
OTOH, who has the money to fight MS in court on something like this?
Crossgain could have found itself in the position of having to fight 20
separate legal actions against a company that has delayed a persistent
antitrust prosecution for a couple of years now...

I hope this doesn't become a trend...


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