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CA Vs. MA In Battle Over Non-Compete Clause
Posted by
kdawson
on Tue May 05, 2009 05:42 PM
from the so-free-you-can-choose-bondage dept.
from the so-free-you-can-choose-bondage dept.
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."
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Hey (Score:5, Informative)
In Australia, non-compete clauses are classed as restraint of trade, and thus illegal. Sucked in ex-EMC executive!
Re:Hey (Score:5, Insightful)
Parent
Re:Hey (Score:5, Informative)
This is, as far as I know, not true. Non-compete clauses are legal, but not universally regarded as valid — they are evaluated on a case-by-case basis. Here is an interview [bnetau.com.au] with Peter Townsend [townsendslaw.com.au], a lawyer specialising in business law, describing the state and enforceability of these clauses in Australia.
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IP (Score:5, Funny)
Not that this argument about IP works in the first place - this guy is an executive.
Re: (Score:3, Funny)
You know someone was going to do it!
Re:IP (Score:4, Funny)
Bart: "Is Mister Freely there?"
Moe: "Who?"
Bart: "Freely, first initials I. P."
Moe: "Hold on, I'll check. Uh, is I. P. Freely here? Hey everybody, I. P. Freely! Wait a minute... Listen to me you lousy bum. When I get a hold of you, you're dead. I swear I'm gonna slice your heart in half."
Parent
Re: (Score:3, Interesting)
Since your former employer (unless they're SUN) doesn't own the IP to MySQL, it's not an issue. They can't claim ownership of your knowledge of MySQL since MySQL is already owned - by someone else - and the license that governs ownership of that knowledge is the license between YOU and MySQL (the gpl) unless your former boss had a separate agreement with MySQL that granted THEM ownership rights, which I seriously doubt, seeing as SUN bought them. Ditto for your other examples. What they DO own is the propr
Both arguments make sense (Score:4, Interesting)
Re:Both arguments make sense (Score:5, Insightful)
Parent
Re:Both arguments make sense (Score:4, Insightful)
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Re: (Score:3, Informative)
The government has limited business telling people what they can and cannot agree to in a contract.
There are many statutory rights you cannot invalidate with a contract.
Here are some examples in California:
1) Your landlord cannot put a clause in your rental/lease agreement that they can enter the property at anytime to check its condition.
2) An employer cannot place conditions on a severance in regards to suing for back wages or filing a complaint to the state.
3) Because California is a no-fault divorce state, both pre and post nuptials cannot use faults of character or behavior as conditions.
Re:Both arguments make sense (Score:4, Informative)
In CA, they put non competes in contracts all the time, even though they are essentially illegal (and anyone writing them in CA knows that). You can force "non compete" in that someone may not take something owned by the previous company, like a product or such, and use that at the new company for a competitive advantage. An illegal contract does not need to be honored. You can't sign yourself into indentured servitude. And a contract that specifies you can't work in the field you are most qualified in is not much different. That the companies like to have them to badger former employees with illegal contracts is all find and dandy. But in some areas, you aren't given a choice. You sign, or you starve (figuratively). So, you sign and expect the illegal contract to not be enforced.
On the other hand, companies are so willing to throw employees under the bus today that it is ridiculous to think they can interfere with you taking another job by claiming "IP" issues.
The company isn't claiming IP. MA is. MA claims that forced unemployment is ok because the risk that someone might accidentally share info with a competitor is too high. CA says that forced unemployment is illegal regardless of contract, just like indentured servitude is.
Parent
Re: (Score:3, Interesting)
That's apples and oranges (no pun intended). It's one thing to bring your knowledge with you, but bringing work product along should be strictly verboten. Your current employer paid you to create those items, it would be unethical to give them to someone else.
The right to work. (Score:3, Insightful)
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?
Re: (Score:3, Interesting)
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?
I think confidentiality is a better concept to employ in this scenario than blanket non-compete clauses. I.e., fine, work for whoever you want, but your previous employer should (and does, at least in Australia) have a right to require you to keep secret any confidential information you gained during the course of your employment with them.
I am no fan of governments or companies controlling my life either. But I can see that there is a bargain to be made whereby you are paid to work on potentially sensiti
Re: (Score:3, Insightful)
Suppose someone were going to pay me 2 years worth of money, up front, for 1 year of work, in exchange for not competing for a year.
That's not how it works. They pay you market rate for doing your job (possibly a bit above to make you leave). It certainly isn't twice as much or (years worked+noncompete term)/(years worked) extra.
That's really the problem.
Let EMC sue in Barbados (Score:5, Insightful)
Re:Let EMC sue in Barbados (Score:4, Insightful)
Parent
Noncompete agreements are the DRM of human capital (Score:3)
So MA is bringing back slavery? (Score:5, Interesting)
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.
Re: (Score:3, Insightful)
How about getting a job with a company that does not compete? How about the similar job for a company in a different line of business?
The more highly educated and specialized you become, the more likely it is that the situation you describe simply doesn't exist.
I can say with a high degree of probability, my skills and experience pretty much lock me into the industry I am now, and given the diverse areas in which my company does work, anyone who would hire me could be considered a competitor.
It's not re
So why are there non-competes in California? (Score:5, Interesting)
Re: (Score:3, Insightful)
They really should be abolished nationwide. It's just another way of asserting control over you even when you're receiving no compensation for the restrictions they're forcing on you.
Re: (Score:3, Interesting)
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.
Wouldn't the law at the time of the signing apply?
Re:So why are there non-competes in California? (Score:5, Interesting)
Parent
Re: (Score:3, Informative)
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.
California is right (Score:5, Insightful)
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?)
Parent
Re: (Score:3, Insightful)
Everyone here knows lots of tech companies that are located in Silicon Valley and elsewhere. As for Massachusetts, can you please list some? Other than perhaps EMC, I can't really think of any offhand. And no, MIT doesn't count, since it's a school.
Maybe you're the retarded one, since you like to throw terms like that around.
Re:California is right (Score:5, Informative)
Lots of companies. Although since the PC beat the mainframe there are fewer computer companies.
We have large offices for Raytheon, Parametrics, Solidworks, Comverse, Sigmatel, ..... uswusf.
All the major "California" companies have large offices here in MA too:
Sun/Oracle
Microsoft
Lotus/IBM
Hp
Symantec
Akami
In cambridge/boston its more Biotech (Amgen Novartus, pfizer )etc...
google is your friend
Parent
Re: (Score:3, Informative)
Huh? ATI was based in Markham, Ontario.
Re:Maybe they're both right (Score:5, Insightful)
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. :)
Parent
Re:non competes only make sense when... (Score:4, Funny)
I hear Burger King has really strict IP rules around the secret to why "The King" is so creepy.
Parent
Re:non competes only make sense when... (Score:5, Insightful)
Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.
Parent
Re:non competes only make sense when... (Score:5, Informative)
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.
Parent
Re:non competes only make sense when... (Score:4, Funny)
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 /.
Parent
Re:non competes only make sense when... (Score:5, Interesting)
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.
Parent
Re:non competes only make sense when... (Score:4, Interesting)
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.
Parent
Re:non competes only make sense when... (Score:5, Insightful)
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.
Parent
Re:non competes only make sense when... (Score:5, Funny)
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Still a problem... (Score:3, Interesting)
Re:non competes only make sense when... (Score:5, Interesting)
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.
Parent
Re: (Score:3, Interesting)
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 mon
Re:non competes only make sense when... (Score:5, Insightful)
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.
Parent
Re: (Score:3, Insightful)
Re:non competes only make sense when... (Score:4, Funny)
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Re: (Score:3, Interesting)
Re: (Score:3, Informative)
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 com
Re: (Score:3, Insightful)
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.
Re: (Score:3, Funny)
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."
Re: (Score:3, Funny)
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)