Non-Compete Agreements are controversial documents that restrict a person’s right to work with competitors of a former employer. The effectiveness of one such non-compete agreement is on display in a recent lawsuit filed by Microsoft against Google.
Dr. Kai-Fu Lee
Dr. Kai-Fu Lee joined Microsoft in 1998 and was in charge of creating and running company operations in China. Over the last few years, Lee has been working on Microsoft’s speech recognition system. The system is rumored to be the next big add on for future Windows operating systems. On top of this, Microsoft claims Lee has been responsible for the overall development of the MSN Internet search program. In short, he has intimate knowledge of company trade secrets including technology developments as well as business and marketing planning.
When Non-Compete Agreements Attack
In 2000, Microsoft moved to protect itself by requiring Lee to sign a non-compete agreement. Although not yet public, the agreement undoubtedly requires Lee to forgo employment with any direct competitor of Microsoft. Notwithstanding this agreement, Lee quit this past week upon notifying Microsoft that he was moving to Google.
No doubt infuriated, the powers that be at Microsoft sued Google and Lee in the State of Washington on Monday. Microsoft claims Lee violated the terms of his agreement and seeks an injunction prohibiting him from working at Google. Microsoft also claims that Google is liable for inducing Lee to leave Microsoft, ostensibly for the purpose of discovering Microsoft trade secrets. In turn, Google countersued Microsoft in a California court claiming the non-compete agreement constituted an illegal restraint on trade.
Non-Compete Agreement To Be Upheld?
Predicting the outcome of the dispute is going to depend significantly on a surprising issue…jurisdiction. Jurisdiction simply refers to the court system, Washington or California, which has the right to hear the case.
California is a “right to work” state, which means courts require any non-compete agreements to be very narrow. If the Agreement is broadly worded to preclude Lee from working for “direct competitors” or some such langauge, Microsoft will have a difficult time prevailing in a California court. Washington law, on the other hand, would be more likely to uphold such wording.
Determining jurisdiction is a tricky issue. Essentially, one looks to the facts of the disputed to arrive at an opinion. An analysis of jurisdiction is beyond this article, but Google has clearly made a major mistake with Dr. Lee. In a press release announcing the hiring of Lee, Google noted he would be working in China, not California. This significantly damages any claim that California has jurisdiction over the matter. Google’s attorneys are undoubtedly unhappy with the individuals in the press relations department.
Ultimately, Google and Microsoft will most likely reach a settlement agreement. Lee will be allowed to work for Google, but will be restricted from working in certain areas. Still, Lee’s decision to switch positions is a blow to Microsoft.
What do you think about this article? Do you agree or disagree with it? Be the first to comment on this article, and share your thoughts with the world. No registration is required to post comments.
Unless you've been on vacation all summer, the brawl between Google and Microsoft should be old news. New developments, however, have occurred with publication of the non-compete agreement signed by Kai-Fu Lee
Microsoft Client Relation Management system (Microsoft CRM) and Microsoft RMS are both Microsoft SQL Server based applications, however historically Microsoft was purchasing industry leading software...
Microsoft Business Solutions offers several ERP applications: Great Plains, Navision, Solomon and its own CRM solution - Microsoft CRM. Targeting to automate all business operations, Microsoft CRM is now...
Once again I seem to be writing about Google. The reason Google keeps cropping up in these articles is that:Google is an innovative company always coming up with new ideas to keep one step ahead of the...
Some introduction into Great Plains Software products, now Microsoft Business Solutions. Microsoft Great Plains becomes more and more popular, partly because of Microsoft muscles behind it. Now it is...
So you're sick and tired of AOL Instant Messenger. You're looking for something fresh and new that will just work. Well Google feels the same way. On Wednesday August 24th they released their version of...
It would seem that Microsoft has been sending Best Buy workers so called "training" material that pretty much warps and attacks the Linux Operating system, according to an anonymous Best Buy worker. The memos
For Pay Per Click Advertisers, Google AdWords is the 800 pound
Gorilla. According to Google, its network reaches more than 80%
of Internet users. If you understand and use Google AdWords
correctly, it can...
Google recently launched Google Place Search, totally integrating Google Place pages with organic results for any search terms that Google perceives as local, including [New York pizza]. This new results...
This article is for advanced Microsoft CRM SDK C# developers. It describes the technique of direct SQL programming, when SDK doesn't have the functionality to do the job.Introduction. Looks like Microsoft...
This employment law advice guide from Peninsula Business Services explains the rights of volunteers in the workplace, and how employers can guarantee a fair non-contractual relationship.
Company formation is important when you're starting a new company. There are services that can help you with your company formation. Company formation services would help you organize a company with the...
In California attorneys fees in business litigation can be recovered pursuant to a contract or a statute. In other words, lawsuits for breach of contract may involve a contract that provides for the award of
Business litigation over a business relationship between two parties often requires a legal determination as to what kind of relationship the parties have. Business litigation attorneys will often talk...
In Los Angeles business litigation attorneys use a variety of names: commercial litigation attorneys, corporate litigation attorneys, breach of contract litigation attorneys, or even just business trial...
The vision, strategy and hard work required to take business acquisitions from a thought to reality aren't included in a business course. It can only come from being in the middle of an acquisition, which...
MBOs are management buy-outs that result from owners of companies selling their businesses to the existing management team. An important strategy for these leveraged actions is to acquire financing, such as...
If you're located in the City of Toronto and involved with a legal case (buying or selling real estate, bankruptcy issues, tax issues, family inheritance, business issues), the first thing that may come...
In short, a Management Buy Out or 'MBO' is the purchase of a company from the existing owner(s) by the company's current management team. This buy out is performed by this management structure forming a...
Continuing on from our last article 'A Guide to Company Acquisitions,' we continue to talk about acquiring a business through purchasing shares. We mentioned in our previous article that there are several...
In 1999, I decided to live a year in the city of Chita, Russia. For those not in the know, Chita is a city in Siberia.HistoryThe City of Chita is a the administrative center of the Chita Oblast, which is...
After deciding to move to Siberia for a year to teach at the Chita State Technical University, I embarked on a travel odyssey unlike any other. In this entry, we pick up the trip leaving the train station...
After deciding to move to Siberia for a year to teach at the Chita State Technical University, I embarked on a travel odyssey unlike any other. In this entry, we pick up the trip on the Trans-Siberian...
After deciding to move to Siberia for a year to teach at the Chita State Technical University, I embarked on a travel odyssey unlike any other. In this entry, we pick up the last stage of the seven-day trip to
Isla Mujeres in Mexico is a great way to escape the tourist crush in Cancun. Roughly 9 miles offshore, the island contains the Mexican beach culture of a bygone era. Oh, and the name translates to "The...
The Riviera Maya on the Caribbean coast was a secret getaway to paradise for many years. No longer. Now it is considered one of the finest beach areas in the world.Riviera MayaLocated on the Yucatan...
A sleepy island area in the 1970s, Cancun has been transformed into a mega tourist destination. Located on the Caribbean side of Mexico, this resort area has something for everyone.CancunMake no mistake...
Legal issues and problems are stressful, complex and inevitable. If you get wrapped up in legal issues, it sometimes helps to understand the lingo being bandied about.Legal TermsContract: An agreement...
Business entities comes in so many types that business owners can easily get confused. Here's a quick guide that will hopefully shed a little light on business entities for you.Business Entities"C"...
Article: Non-Compete Agreements In Action - Microsoft V. Google Author: Richard Chapo Publication Date: 2007-07-22 Total Views: 110 Word Count: 527 Category:Home /
Legal / Business Law
Categories
