Kinda sounds like MS has a case here, to my non-lawyer eyes. What would make the non-competition agreement not applicable?
Generally, non-competition agreements are considered enforceable unless they are excessive, such as effectively denying someone a livelihood. They’re generally considered reasonable if the term in question is a year or less.
This is a contract matter, though, so it’s not really possible to tell anything without seeing the actual language of the contract.
Non-compete agreements are banned in California, by state statute, so it depends on the state. I think Colorado and North Dakota also ban non-compete agreements. Since Microsoft is headquartered in Washington state, I would think that state’s law governs this agreement, but the fact that it was a position in a foreign country may also have some bearing.
The last time I heard something this diabolical was when Microsoft was able cause the defection of Borland’s C++ Builder Team leader and put him in charge of the Visual C++ department at Microsoft. What’s good for the goose, is good for the gander.
Well, depending on state law and any valid agreements the respective anserine parties might have entered into in this case, that is.
Yeah, but Borland was in California, wasn’t it? Of course, I think Google is, too, which could really complicate the case.
What’s been confusing me is how Microsoft could possibly have any case against Google. Shouldn’t they be suing Dr Lee? Google sure as hell never signed any contract with Microsoft saying they wouldn’t compete with them for employees.
Good point Gorsnam, I was going to bring that up in the OP but forgot.
Maybe they’re suing Google because one of the company’s employees (namely Dr. Lee) violated a contract with Microsoft. Can it work like that?
There is a cause of action for interference with a contract. However, I’m not saying anything more until I actually see the complaint that Microsoft filed. The news reports I’ve seen have not given details of Microsoft’s actual legal claims and pretty much everything posted so far in this thread is pure speculation.
And I can’t even figure out what court this action was supposedly filed in.
Just out of interest, how does one define “competition” in cases like this?
Sure, there are some companioes that might be considered to be in direct competition with MS, but there are probably other companies in the computer/technology industry that are not really part of Microsoft’s competition at all. Is there a way of determining how closely-related the “competition” must be for such clauses to kick in?
I mean, i can see that Google might be a competitor for Microsoft if i’m deciding on a method of searching the web or choosing a satellite imagery application (Google Earth v. Terraserver), but probably not when i’m shopping for an operating system or word processing software.
Microsoft might get slapped down for attempting to define “competition” so broadly as to constitute effective denial of livelihood. (This is especially true if it’s suing the new employer, not just the employee – can you say “chilling effect”?)
Okay, I finally got my hands on a copy of the complaint … I’ll just give general info for now.
The action is filed in King County Superior Court – that’s a Washington state court, not a federal court.
The plaintiff is Microsoft Corp. (a Washington corporation) and the defendants are Kai-Fu Lee (a resident of Bellevue, Wash.) and Google Inc. (a Delaware corporation with its p/p/b in California and an office in Kirkland, Wash.; it does business in Washington).
So the implication is that the action is based on Washington state law and that the court should have jurisdiction over Google in Washington. The court will have to decide whether it can assert personal jurisdiction over Google for “doing business in Washington.” Venue in the King County court is based on a forum provision in the contract between Microsoft and Lee.
Google is accused of “assisting” Lee in his breach of contract.
The causes of action are:
- Breach of contract (against Lee)
- Breach of non-disclosure promises and misapropriation of trade secrets (under Wash. Rev. Code Sec. 19.108) (against Lee)
- Tortious interference with contractual relations (against Google)
Microsoft seeks injunctive relief and compensatory damages (to be determined).
If I have time later, I’ll try to post quotes from the contractual language and the relevant legal provisions.
That’s mighty cool of you to do all that acsenray, thanks.
Side note: whatever one says about Microsoft, it doesn’t do that. Many companies take advantage of Delaware’s greed to establish their HQ’s there. They get certain preferences and easier rules in some things, even though they may do no business there and may have HQ’s elsewhere. This started well over a century ago.
Whatever Microsoft’s reason for not incorporating in Delaware, I’m hesitant to assume that it’s based on some notion of principle or fair play or civic duty.
Ah, Delaware: The Worst State.
A place that makes a living providing a haven for greedy corporations who don’t like other states’ pesky regulations, and exacting outrageous tolls on anyone who has the temerity to want to drive through this worthless place on their way to or from somewhere more interesting.
Driving on the New Jersey turnpike costs under 5c per mile. Driving on I-95 in Maryland costs about 4c a mile. But to get from one to the other you have to cross Delaware, which charges 18c a mile, secure in the knowledge that most of the road users are out-of-staters who can’t register their opposition at election time.
There was a good article about Delaware’s parasitic existence by Jonathan Chait in The New Republic a few years back.
According to Microsoft’s complaint, the relevant provisions of the employment agreement are:
So in other words;
Microsoft to Google: All your Dr. Kai-Fu Lee are belong to us.