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Judge Blocks Former Microsoft General Manager From Working For Salesforce

from the noncompetes dept

A few years ago, we covered some of the research on the impact of noncompete agreements on innovative industries. Basically, noncompetes are effectively a form of DRM on human capital. They diminish the pace of innovation in that they get in the way of idea sharing and the free flow of talent to where it can be most effective. Not surprisingly, California refuses to recognize noncompete agreements as enforceable. So, it's a bit strange to see, as pointed out on Slashdot, that a former Microsoft General Manager, Matthew Miszewski, cannot work for Salesforce.com "in a marketing role in salesforce.com's public or commercial sector anywhere in the world." It's that "anywhere in the world" part that has me scratching my head. If Miszewski moved to California, where Salesforce is based, could the Washington court actually do anything? The Slashdot post also points out Microsoft's hypocrisy on this issue, in that it's happy to restrict the "flow of talent" from its own staff, but on immigration always argues about the importance of the free flow of talent to American innovation...


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  1.  
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    FUDbuster (profile), Apr 19th, 2011 @ 7:30pm

    If Miszewski moved to California, where Salesforce is based, could the Washington court actually do anything?

    Sure. He'd not only be breaching his contract, he'd be violating a court order. Moving to California wouldn't change that.

     

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  2.  
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    Bill Bliss (profile), Apr 19th, 2011 @ 7:37pm

    Courts will enforce Washington state employment contracts

    Microsoft has successfully used its non-compete clause to prevent people from taking jobs at California-based competitors before.

    Perhaps the most famous example of this was when Kai-Fu Lee left Microsoft to run Google China. Microsoft sued and Google counter-sued. They eventually settled out of court, but the court most definitely did not dismiss Microsoft's claims out of hand.

     

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  3.  
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    Jay (profile), Apr 19th, 2011 @ 7:42pm

    Re:

    Ok...

    How do they enforce it?

     

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  4.  
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    Anonymous Coward, Apr 19th, 2011 @ 7:44pm

    Re:

    It doesn't look like it was a federal judge that made that decision, so the decision wouldn't have mandatory precedent in California.

     

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  5.  
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    Anonymous Coward, Apr 19th, 2011 @ 7:48pm

    The anywhere in the world part is only valid in jurisdictions where such a clause is legal. Everyone knows that contract clauses don't apply in places where they are invalid but contract makers make contracts as restrictive as possible so that it can cover as many restrictions as whatever jurisdiction the contract happened to be signed in allows.

     

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  6.  
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    Robert Shaver, Apr 19th, 2011 @ 7:53pm

    It's simple to me/for me ...

    In my 30 year career as an engineer I never signed a non-compete. Once, when one appeared in my hiring package of documents, I just left it unsigned and nobody said anything.

    The only other time I refused to sign the non-compete ... they waved it.

    Maybe it's that I'm not much of a threat but I decided I would never sign one. If everyone did that, they would disappear, don't you thing?

     

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  7.  
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    FUDpacker, Apr 19th, 2011 @ 8:21pm

    Re:

    litigation and settlement

     

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  8.  
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    Frankz (profile), Apr 19th, 2011 @ 9:17pm

    Non-competes are against CA state laws.
    He could move to CA, then sue M$. CA Court ruling, since he now lives there, would trump the previous court ruling.

    Not exactly an infallible source, but the Wikipedia article on non-competes specificly mentions this exact situation.
    A CA court ruled that an out of state non-compete isn't enforceable in CA:
    http://en.wikipedia.org/wiki/Non-compete_clause#Out_of_state_agreements_are_not_enforceable

     

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  9.  
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    Anonymous Coward, Apr 19th, 2011 @ 9:24pm

    Washington non-competes are fairly broad right now, All the law says is that it must be reasonable in duration, location, scope. More Info

    Since Microsoft filed in Washington state (because the contract was signed in WA state and Employment was in WA state) and because Microsoft filed first they basically got to choose a venue that was favorable to them. I am sure there was a clause in the contract that said all lawsuits will be held in WA state as well. However a declaratory lawsuit in CA finding the statement in the contract is invalid in the state of CA may help others in the same situation.

    However this contract fails at one of the basic requirements of the WA state non compete agreement, Location of "the world" is overly broad, most commonly in actual state case law a range of 100 - 200 miles is about as much the court is willing to accept and over 500 miles (outside the state) shows the employee tried to work with an overly broad contract. Winnings in court would be minimal if this was pushed to trial. If I recall correctly salesforce also has an Asian branch the guy could work at and then there would be no way he could be found in breach of contract.

    Oregon state has much more strict non-competes and CA has almost none (you must sell a business basically). In Oregon for a non-compete to be acceptable you MUST be Upper management or an officer, make at least ~60k / year, have access to company secrets, and the company has to pay half your salary as long as the agreement is in effect.

    Just some fun background for Oregon, the harsh non-competes started when fast food joints started putting them in the hiring agreements for min wage jobs. Then, when a worker would go to a different food job (McDonald's -> Mom & Pop) McDonald's would sue the business that hired its staff away in an attempt to drive away the business's it did not like away.

     

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  10.  
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    Pixelation, Apr 19th, 2011 @ 9:47pm

    Non-compete, it's like a patent on your employee. We're not willing to do what it takes to keep our employees but we'll pay our overpriced lawyers whatever they want to prevent you from hiring them.

    Non-compete defined...Similar to a patent, we have something great but we don't want to have to do anything to maintain it's value, we just want to rake in the cash.

     

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    Griff (profile), Apr 19th, 2011 @ 10:56pm

    Free flow of talent

    I think it's a bit of a stretch to compare a dislike of having your employees spill your secrets to the competition with supporting talented foreign programmers entering the country.
    Not the same thing at all.



    I was once asked to sign a non compete with a small specialised company. No biggie, their competition was a joke and I'd never want to go work for them.

    But my employer got bought by a behemoth who supplied a vast array of products to the life science industry. It was once claimed to me that the non compete now applied to the competition of the new owners. This would force me to leave the entire industry if I ever left.

    I think in the UK you cannot remove someone's means of earning a living. So a court judgement that confiscated a carpenters's tools, or a non compete that ruled out any way to practice the trade the person was qualified for, would be illegal.

    Most of us see non compete's as almost irrelevant because we're simply not important enough.
    - noone would spend the money suing for ordinary folks like us
    - most HR depts wouldn't even know we had gone to the competition if we weren't in mega high profile jobs.

    But in most cases, "forgetting" to sign it from the outset is the easiest policy, because at the beginning they are happy to have you there and don't make a fuss and thereafter it gets forgotten due to HR incompetence.

     

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  12.  
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    Anonymous Coward, Apr 19th, 2011 @ 11:02pm

    Re:

    But that's dumb, it will only lead to employee vandalism. Corporations should be careful not to trap their employees because they just might get what they want.

     

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  13.  
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    LookinAtTheLaw, Apr 19th, 2011 @ 11:04pm

    Issue of Law

    The judgment could be recognized in California through constitutional analysis. This is pretty problematic, as a judgment in one state is usually recognized in another state. The attorney should have removed the case to California.

    Still, the entire world provision is pretty broad. I can see this being appealed easily, as jurisdiction doesn't extend that far.

     

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  14.  
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    Anonymous Coward, Apr 19th, 2011 @ 11:08pm

    Re: Re:

    (oops!!! I don't know how that data got corrupted. Musta been a computer glitch or something).

     

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  15.  
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    G Thompson (profile), Apr 20th, 2011 @ 12:27am

    Re:

    That might be true of him moving to another State of the USA (though I think supremacy problems regarding a civil court in one state telling another state that their STATUTE is not relevant)

    It would not be relevant if he then moved internationally to another country where the Washington court has NO jurisdiction to enforce its order whatsoever if the law (or civil precedents) of that country negated the court order.

    In fact I'm personally sick and tired of US CIVIL courts stating "anywhere in the world" when they know full well that that is a tortuous, eronious, and bordering on nonfeasance statement.

    As for breaching his contract, that noncompete part of the contract would be instantly voidable, if not unconscionable, in most places in the world. The only caveat that can be really placed on anyone moving from one place to another in form of work/service is that they do not void any non disclosure agreements or remove data from old place. Otherwise as most countries have stated a non-compete could be classified as a form of ownership of the individual ie: slavery

     

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  16.  
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    Fun in Vegas, Apr 20th, 2011 @ 6:57am

    Forgot one

    Everything listed in this article is accurate, except suppression of salaries has been left out as is strongly prevalent in Vegas due to the lack of any real industry. You can change jobs here, but the requirement is 3 to 6 months of lost income, since you are barred from competing, and there is really not other place to work, except leaving town.

     

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  17.  
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    Anonymous Coward, Apr 20th, 2011 @ 7:53am

    Anywhere in the world its also here...

     

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  18.  
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    CowardTruth, Apr 20th, 2011 @ 8:34am

    Left and Right

    The truth is this - as long as you are an underdog company we want everybody to be fair to you and everybody like yours. But once you reach the commanding heights (Google, Microsoft etc)you want to secure your rights and snuff out the underdog, because you are secure in the knowledge that any underdog if not prevented is going to come and eat your lunch, dinner and what have you...!

    This rat race is on as long as Congress is blind to this!

     

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  19.  
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    Matthew A. Sawtell, Apr 20th, 2011 @ 8:38am

    Hasn't this been a "Standard Practice" for years in the contracting job market?

    Hasn't this been a "Standard Practice" for years in contracting job market? Hell still remember the practice of OEMs in Detroit in the early 90's requiring folks to sit a month unemployeed as they switched to better positions - to reduce "jobhopping". Caveat emptor, it is always going to be up to the individual person to review the contracts (and selectively sign those that could bite them in the butt later on).

    It is a wonder that folks like Huffington Post (and other 'new paradigm' companies) haven't been trying this sort of crap with its "employees" yet. I see it now... "you can 'volunteer' your work to me, but not get paid by anyone else."

     

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  20.  
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    Bill Bliss (profile), Apr 20th, 2011 @ 10:34am

    Not signing the noncompete wouldn't have worked at Microsoft

    Obviously the "don't bother signing it" tactic works elsewhere, but it wouldn't have worked at Microsoft. As far back as 1987, when I started there, they wouldn't have let you leave the onboarding room without having signed it. They were as picky about it as they were about proof of citizenship.

    Moreover, they give you a copy of it during your exit interview to remind you of your obligation.

    During Kai-Fu Lee's lawsuit between him, Microsoft, and Google, Google definitely argued California jurisdiction but they also threw in the fact that since he was taking a job in China, Washington court rulings didn't apply there.

    Clearly neither Google nor Microsoft didn't think they had a slam-dunk case, or at least one that would be resolved quickly, because they settled. Either way there was a cloud over his ability to start his job.

    It all depends on the employee in question, the company being moved to, and Microsoft's corporate mood at the time. But I can say that as an employee in the state of Washington, it's pretty well known that your company may choose to enforce a non-compete and that it may well work.

     

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  21.  
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    btr1701 (profile), Apr 20th, 2011 @ 3:44pm

    Re: Precision

    > He'd not only be breaching his contract,
    > he'd be violating a court order. Moving to
    > California wouldn't change that.

    The question wasn't whether he was in violation of either contract or court order.

    The question was whether the Washington court could *do* anything about it in a jurisdiction which doesn't recognize this sort of agreement in the first place.

    Honestly, it scares me that you're supposedly becoming a lawyer when you consistently have such problems identifying and addressing the actual issue under discussion.

     

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  22.  
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    FUDbuster (profile), Apr 20th, 2011 @ 4:11pm

    Re: Re: Precision

    Dramatic much? I understand that the issue is comity, and I answered, "Sure." He couldn't escape the contract or the court order by simply moving to California.

     

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  23.  
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    btr1701 (profile), Apr 20th, 2011 @ 10:22pm

    Re: Re: Re: Precision

    > Dramatic much?

    Just tearing a page from your own book. Amusing that you didn't even realize that.

     

    reply to this | link to this | view in thread ]


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