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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Filed Under: matthew miszewski, noncompetes, working
Companies: microsoft, salesforce.com
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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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Courts will enforce Washington state employment contracts
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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How do they enforce it?
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It's simple to me/for me ...
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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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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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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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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Free flow of talent
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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Issue of Law
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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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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Forgot one
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Left and Right
This rat race is on as long as Congress is blind to this!
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Hasn't this been a "Standard Practice" for years in the contracting job market?
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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Not signing the noncompete wouldn't have worked at Microsoft
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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Re: Precision
> 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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Just tearing a page from your own book. Amusing that you didn't even realize that.
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