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CA Vs. MA In Battle Over Non-Compete Clause 248

Posted by kdawson
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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CA Vs. MA In Battle Over Non-Compete Clause

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  • by Anonymous Coward on Tuesday May 05, 2009 @06:44PM (#27839221)

    you have someone who made enough money not to have to work again during the non compete period- otherwise what the hell are you supposed to do, work at burger king?

  • by Hatta (162192) on Tuesday May 05, 2009 @07:01PM (#27839405) Journal

    Easy solution. Legalize non-competes, but require the company to pay the employee while bound by the non-compete.

  • Re:Hey (Score:5, Insightful)

    by evilbessie (873633) on Tuesday May 05, 2009 @07:04PM (#27839445)
    However if a company wanted you to take 6 months paid leave before you could leave I have no problem. But once you stop paying me you stop telling me what to do, that's mostly the way employment works.
  • by Anonymous Coward on Tuesday May 05, 2009 @07:05PM (#27839451)

    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 right to work. (Score:3, Insightful)

    by Bellegante (1519683) on Tuesday May 05, 2009 @07:05PM (#27839457)
    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?
  • by evilbessie (873633) on Tuesday May 05, 2009 @07:07PM (#27839469)
    No. Once you stop paying me you don't have any right to tell me what to do. You don't want me to join a competing company for say a year, you can damn well pay me for a year to sit on my ass. I'm fairly sure that they are not allowed in the UK anyway, so I'm fine.
  • by timeOday (582209) on Tuesday May 05, 2009 @07:07PM (#27839473)
    It appears most of EMC is technically "located" in foreign tax havens [transnationale.org] (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.
  • by Xtifr (1323) on Tuesday May 05, 2009 @07:23PM (#27839607) Homepage

    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. :)

  • by Grishnakh (216268) on Tuesday May 05, 2009 @07:25PM (#27839637)

    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.

  • by Speare (84249) on Tuesday May 05, 2009 @07:41PM (#27839823) Homepage Journal
    Do you really want to go down the "you only get the legal protections you pay for" road? Libertarianism is strong on this site, but let's just say... there are some pretty rich players who don't have your best interests at heart.
  • Re:Why compete? (Score:3, Insightful)

    by Grishnakh (216268) on Tuesday May 05, 2009 @07:45PM (#27839867)

    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.

  • by chriso11 (254041) on Tuesday May 05, 2009 @07:45PM (#27839875) Journal

    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.

  • by Anonymous Coward on Tuesday May 05, 2009 @07:47PM (#27839897)

    California was admitted to the union as a Free State. I think that once you set a foot in California you immediately become free.

    Companies use non-compete agreements to cement their monopolies, like Microsoft. I wonder why non-competes aren't attacked by the anti-trust lawyers.

    Silicon Valley and California benefit from the lack of non-competes, people move around more and ideas are "cross-pollinated" to many locations.

  • by NeutronCowboy (896098) on Tuesday May 05, 2009 @07:48PM (#27839905)

    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.

  • by Libertarian001 (453712) on Tuesday May 05, 2009 @07:58PM (#27840009)
    Companies have no business telling people where they can and cannot work. Don't want to risk losing your people? I guess that means you value them. Maybe try not treating them like shit and then you won't lose them.
  • by gilbert644 (1515625) on Tuesday May 05, 2009 @08:59PM (#27840495)
    Corporations aren't people.
  • by tom's a-cold (253195) on Tuesday May 05, 2009 @09:35PM (#27840737) Homepage
    They do it to intimidate you, even though they know that they're not legally binding. Also, companies that operate in multiple states will try to impose terms of employment that can be enforced in whichever states are most anti-employee. If they're not enforceable somewhere else, they hope the employee won't realize that.

    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.
  • by Fulcrum of Evil (560260) on Tuesday May 05, 2009 @09:50PM (#27840857)

    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.

  • by _avs_007 (459738) on Tuesday May 05, 2009 @10:22PM (#27841035)
    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.
  • by Mr. Underbridge (666784) on Tuesday May 05, 2009 @10:50PM (#27841205)

    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 reasonable to tell someone to find a complete different industry or you can't work.

  • by Vektuz (886618) on Tuesday May 05, 2009 @10:50PM (#27841209)
    Trade secrets are actually another area of law, and are already covered by various laws and penalties.
  • by martin-boundary (547041) on Wednesday May 06, 2009 @02:45AM (#27842549)

    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.

    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.

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