[FoRK] Google vs. MSFT: Non-Competes

Justin Mason jm
Wed Jul 20 10:24:45 PDT 2005

Hash: SHA1

as far as I know, they're still legal in CA under certain circumstances,
depending on the circumstances of the employee's hire.

- --j.

Mike Masnick writes:
> Non-competes are already illegal in the Valley (and, actually, in all of 
> California).
> They're legal in most other places, though... and since this argument is 
> about China (and filed in Washington state) it has little to do with the 
> state of non-competes in the Valley.
> Mike
> At 08:22 AM 7/20/2005 -0700, Ian Andrew Bell \(FoRK\) wrote:
> >This case is the right one to set a precedent, and potentially
> >(officially) invalidate Non-Competes in the Valley -- simply because
> >both parties have the bucks to ride this through a long case.  If
> >Google truly isn't evil, they'll fight this one for all of us..
> >
> >-Ian.
> >
> >----
> >http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/ 
> >2005/07/20/BUGO2DQIC21.DTL&type=business
> >
> >Microsoft sues over hiring
> >Former exec joins Google to open lab
> >Verne Kopytoff, Chronicle Staff Writer
> >Wednesday, July 20, 2005
> >
> >Microsoft's rivalry with Google spilled into the courts Tuesday after
> >the software giant sued Google for hiring one of its former
> >executives to open a research lab in China.
> >
> >The suit, filed in King County, Wash., Superior Court, accuses the
> >executive, Kai-Fu Lee, of violating a non-compete agreement with
> >Google's assistance.
> >
> >"What we are interested in is making sure that our confidential
> >information is protected and that Dr. Lee isn't in a position where
> >he could compromise, even inadvertently, our confidential
> >information," said Tom Burt, Microsoft's deputy general counsel.
> >
> >In a statement, Google denied the accusations, saying "we have
> >reviewed Microsoft's claims and they are completely without merit. We
> >will defend vigorously against these meritless claims and will fully
> >support Dr. Lee."
> >
> >Google and Microsoft are engaged in an intense battle for users. Each
> >has unveiled a series of new features in an effort to cement user
> >loyalty and increase adverting revenue.
> >
> >Google leads the race, which also includes Yahoo and IAC/ 
> >InterActiveCorp's Ask Jeeves.
> >
> >Microsoft's suit highlights a common business practice in some
> >states. Companies routinely require workers, particularly executives,
> >to sign contracts that prohibit them from joining competitors after
> >resigning.
> >
> >Protecting company secrets is the goal. The fear is that employees
> >will reveal important information about products and strategies to a
> >rival.
> >
> >In California, non-compete agreements are unenforceable, according to
> >Michael McCabe, an employment law attorney in the San Francisco
> >office of Reed Smith. Workers can join any firm they want, even a
> >rival, he said. But as part of an employment contract, employees can
> >be prohibited from sharing trade secrets and trying to steal
> >customers after changing jobs, he said.
> >
> >"A big battle, when you have companies in different states, is whose
> >law will apply," McCabe said. "The battle then becomes is it
> >appropriate to enforce, is it overbroad or really necessary to
> >protect an employer?"
> >
> >Google announced Lee's hire Tuesday morning as president of the
> >Mountain View search engine's China operations. His job is to open a
> >research and development lab in China, a nation that Internet
> >companies covet because of its huge potential market.
> >
> >Lee was previously a vice president for Microsoft, starting in 2000.
> >Prior to that, he founded Microsoft's research lab in China and was
> >involved in such technologies as multimedia and voice recognition
> >software.
> >
> >Microsoft argues that Lee signed a non-compete agreement when he
> >became a vice president five years ago. Provisions block him from
> >working on certain kinds of projects for a rival for a year after his
> >resignation.
> >
> >In its court filing, Microsoft said that Lee was closely involved
> >with Microsoft's efforts in search, including the products the
> >company is currently developing and its future business plans in
> >China. Microsoft said he was given access to proprietary information
> >that would give any competitor a strategic and economic advantage.
> >
> >Burt said that Lee notified Microsoft that he was leaving for Google
> >on Monday. He added that Lee and Google never tried to negotiate a
> >deal to avoid the conflict.
> >
> >Lee could work for Google, Burt said, but on projects unrelated to
> >what he did at Microsoft. Or he could simply be paid to do nothing
> >for a year, he said.
> >
> >Burt said it is rare for Microsoft to file suit over non-compete
> >agreements, preferring to cut deals beforehand. However, Microsoft
> >was involved in a high profile episode in 2000 and 2001, when several
> >former employees left for Crossgain, a startup that allowed business
> >software to work on the Internet.
> >
> >Those workers eventually left Crossgain after Microsoft pressured the
> >company. They rejoined its successor company, BEA Systems, after
> >their non- compete agreements had expired.
> >
> >E-mail Verne Kopytoff at vkopytoff at sfchronicle.com.
> >
> >_______________________________________________
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> >
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