RE: Crossgain Fires a Quarter of Its Employees

From: Lisa Dusseault (
Date: Tue Jan 16 2001 - 12:36:24 PST

OK, so there's two problems here.

First, these kind of agreements are distressingly common, leading to
complacency. Even in companies that don't want to insist on these kind
of clauses, sometimes sources of funding insist: "you won't get your
funding unless all your employees sign this agreement."

A company may also be pressured by legal advisors to have this kind of
clause "just in case", not intending to be enforced at any time, or only
in case of an employee really trying to screw the company over (even on
an unrelated issue, I assume) it may give the company some leverage.
Unfortunately, attitudes may change. The CEO who promises "don't worry,
that's just part of a template to protect us from liability, we don't
intend to enforce it" may be replaced by a CEO who hasn't made the same

Second, is that if 95% (rough guess) of employees are willing to sign
these agreements (due to how common they are, the complacency effect),
it's _very_ hard to be the minority that objects. It leads companies to
stand firm, knowing that they're unlikely to lose employees over even a
blatantly unreasonable clause. Even of the 5% that object, how many are
willing to stick to their point? By the time an employee sees the
non-compete clause, they have probably accepted the offer, left their
old job, maybe even moved to a new city, and on their first day of work
it's going to be pretty tough to turn around and say that it won't
stand. Commitment inconsistency is a very strong psychological factor,
and the commitment to the new job on day 1 is likely to be higher than
the commitment to some abstract principle, or the thought of some
possible situation years in the future. Although Whore's answer is
correct, I don't think it's feasible. In practice, most people will
sign these.

The free market seems to fail here. You'd think competition between
employers would reduce the incidence of these kinds of agreements, but
the complacency effect means that competition isn't on this basis. In
reality, it's $$ and the kind of work being done that employees look at
when choosing an employer. Even employers with a principaled stand
against these kind of agreements get sucked into having them, by
responsible legal advice (limit your liability!) and pressure from big

The CA alternative, to legislate what can and cannot be part of
employment agreements, is artificially limiting the kind of contracts
you can enter into. In the abstract, why should the government take
responsibility for individuals signing employment agreements?
Particularly well-educated "knowledge workers", whom this applies to?
(MacDonald's doesn't prevent its burger-flippers from taking their
skills and working for Burger King, AFAIK)



> -----Original Message-----
> From: Tom Whore []
> Sent: Tuesday, January 16, 2001 12:13 PM
> To: Matt Jensen
> Cc: Gordon Mohr;; Rohit Khare
> Subject: Re: Crossgain Fires a Quarter of Its Employees
> --]So, *assuming* non-competes in general are acceptable (I
> know, I know),
> --]what part of this case am I not understanding?
> Two parts here.
> Part the First.
> Do you dance with the devil in the pale moon light? If so then your
> ass is his, bend over. If you signed a contract you are bound
> and in this
> case gaged. Lets just hope they were wise enough to have a
> pay for no play
> clause in there.
> Moral of this section of the story, Sont sign something unless you
> willing to live with it. You can moral high horse all you
> want becuase the
> company you dealing with is the supposed Public Enemy Number
> One of the
> whole of Free Thought in the universe (pull the other one
> please) but if
> you are dumb enough to slam dance with the demon dont pussy out and
> complain you got your toes steped on.
> Part the Second.
> Are these noncompetes legal? If the ppular myth mouthing is
> to be heard
> they are simply things you dont have to worry about signing
> because they
> cant be enforced whcih raises the question Why the fuck ar
> they in there
> in the first place?
> Becuase in smae cases they might have some effect, if not the
> full effect,
> of exactly what they say on paper.
> Moral here, none. Just that lawyers are scum chasing thier own paper
> trails and idiots who dance with them...ah go read part one
> its the same
> outcome.
> "Pop musics lost its taste
> so try a differnt flavor" AA
> /"\ [---=== WSMF ----]
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