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Microsoft and Google in Suit Over NonCompete
Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 9:37 pm on Jul 19, 2005 (gmt 0)

Not sure where this should be posted, but -
[news.zdnet.com...]
"Accepting such a position with a direct Microsoft competitor like Google violates the narrow non-competition promise Lee made when he was hired as an executive," Microsoft said in its lawsuit,

The suit was filed in a Washington state court against Google and Kai-Fu Lee, who until Monday was the corporate vice president of Microsoft's Interactive Services Division.

Google said earlier Tuesday that Lee was joining the company and would head up a new research effort in China.


 

digitalghost

WebmasterWorld Senior Member digitalghost us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 10:14 pm on Jul 19, 2005 (gmt 0)

MSN has very aggressive in the past regarding non-compete clauses. This should be high-profile enough to give both sides of NC clause arguments a better airing. How does non-compete stack up with right-to-work?

piplio

5+ Year Member



 
Msg#: 30462 posted 10:40 pm on Jul 19, 2005 (gmt 0)

wow, china's popping hot these days? how can i generate mullas on this?

BigDave

WebmasterWorld Senior Member bigdave us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 11:09 pm on Jul 19, 2005 (gmt 0)

Sould be a juristictional circus unless he is planning on working for Google while continuing to live in Washington.

If his residence changes to California (or China) before he starts work, that suit mostly a waste of paper.

If he is moving to California, then the noncompete clause is invalid, though they may later have a valid trade secrets claim.

Coop99

5+ Year Member



 
Msg#: 30462 posted 11:25 pm on Jul 19, 2005 (gmt 0)

Dave is pretty right in his opinion, however the suit would remain in WA due to the fact that is where he signed the non-compete. Moving after suit is filed does not let you off the hook. It will probably turn into a trade secret battle.

It is my impression that even a non-compete clause cannot keep someone from practicing their career, trade, or profession if they have been in the same line of work for many years.

Then you have to prove that it really is your trade and provide verified records.

This would not be true if the accused is trying to start up a new company based on the previous company strategies. Also, if the accused was attempting to work within a specific mile radius it would not hold true. However, moving from one company to another providing no "proprietary secrets" are shared is completely common. Any time restraints (ie. 2 yr non-compete) would not hold up - cannot keep someone from practicing their trade.

Please do not quote me I am not legal counsel or bar certified in any state. Just my thoughts!

Lord Majestic

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 11:45 pm on Jul 19, 2005 (gmt 0)

How does non-compete stack up with right-to-work?

I think the key there is whether the person is using current knowledge gained at previous place of work about their plans, ie suppose that guy was aware of MSFT strategic plan to acquire some companies in China, using this knowledge is clearly a no-no.

BigDave

WebmasterWorld Senior Member bigdave us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 11:58 pm on Jul 19, 2005 (gmt 0)

Dave is pretty right in his opinion, however the suit would remain in WA due to the fact that is where he signed the non-compete. Moving after suit is filed does not let you off the hook. It will probably turn into a trade secret battle.

Where he signed the contract is only one of the issues. Noncompetes are simply not legal in California, so the view of California courts is that when you cross the state line, any contracts that contain a noncompete are instantly void.

What will likely happen, if the job he is applying for is in California, is that he and google will file suit in California to invalidate the non-compete, and request a preliminary injunction and summary disposition as a matter of law based on California Business & Professions Code 16600.

If they play the court came right, they could get that ruling in a matter of weeks. Whereas for the case in Washington, it is not a ruling based on Law, but based on Fact, so there will not be a summary disposition.

It is a race for rulings, and it favors Google.

All this is assuming that the Job is based in California.

BigDave

WebmasterWorld Senior Member bigdave us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 12:04 am on Jul 20, 2005 (gmt 0)

I think the key there is whether the person is using current knowledge gained at previous place of work about their plans,

That is nondisclosure, not noncompete. Nondisclosure is valid just about everywhere.

ControlEngineer

10+ Year Member



 
Msg#: 30462 posted 12:04 am on Jul 20, 2005 (gmt 0)

My understanding, based on when I had to sign a non-compete agreement a few years ago for some work in WA -- Ichecked with a local lawyer -- was that, unlike a few other western states, WA allowed NC agreements but had stricter limits than most states.

Lee might be able to get out of it by moving to China, but Google isn't moving anywhere.

For those of us who do some work in Washington state the outcome will be interesting.

nakulgoyal

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 3:21 am on Jul 20, 2005 (gmt 0)

interesting, let's see what happens. I don;t remember a non compete case in any big giant company.

linkjack



 
Msg#: 30462 posted 4:03 am on Jul 20, 2005 (gmt 0)

For a long time now I've been using MSN Search only (http://search.msn.com)

When I need a proprietary manual, a brand name spare part, or anything related I go to MSN. Ironically a few years ago I got turned on to Google exactly because I could find this stuff easily while in Altavista I had to go through 100 pages to find what I needed.

Now MSN is 10 times better than Google in most searches. Search for proprietary and you'll get the right pages on MSN while in Google you'll get pages of irrelevant trash.

decaff

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 5:35 am on Jul 20, 2005 (gmt 0)

Count on this:
Every legal nook and cranny will be explored by MS to stop Google from expanding its reach...this is classic MS behavior...

Google's doing the same thing everyone else is doing...getting into what will be a huge market out into the forseeable future (China).. (Show me the Money!)

Tigrou

10+ Year Member



 
Msg#: 30462 posted 10:16 am on Jul 20, 2005 (gmt 0)

wow, if Kai-Fu Lee's ego isn't already huge from his work and legal exploits, then this thread will certainly tip him over :-)

walkman



 
Msg#: 30462 posted 12:20 pm on Jul 20, 2005 (gmt 0)

>> It is my impression that even a non-compete clause cannot keep someone from practicing their career, trade, or profession if they have been in the same line of work for many years.

no lawyer here, but I think some provide for a lump sum payment in exchange for not working for your competitor.

BigDave

WebmasterWorld Senior Member bigdave us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 5:47 pm on Jul 20, 2005 (gmt 0)

but I think some provide for a lump sum payment in exchange for not working for your competitor.

I can't rember which country it is, but one of them has a law that provides that the old company has the right to enforce their non-compete only if they pay you a matching amount for what you are offered by the new company.

It is my understanding that the companies rarely take that option because they don't want to cause it to be a standard way to get 3 years of paid vacation.

Coop99

5+ Year Member



 
Msg#: 30462 posted 6:37 pm on Jul 20, 2005 (gmt 0)

interesting bigdave, nice bit of info thanks!

ControlEngineer

10+ Year Member



 
Msg#: 30462 posted 7:47 pm on Jul 20, 2005 (gmt 0)

I have had to sign a number of agreements relating to my engineering work. Some were not compete, others involved non-disclosure, some were both.

One thing I have learned from discussions with lawyers (and from my college business law instructor many years ago) is if you sign a contract to do something or to not do something, you have an agreement and you must follow it unless there is a law saying otherwise. The laws vary by state. So when I am handed a contract I either am prepared to live with the terms or find out from a lawyer in that state that the courts will not enforce particular terms.

In some states non-compete agreements can be enforced and can be dangerous things to sign. So always read them, and talk to a lawyer if necessary.

That has kept me out of trouble, so far.

walkman



 
Msg#: 30462 posted 8:27 pm on Jul 20, 2005 (gmt 0)

>> So always read them, and talk to a lawyer if necessary.

sure but when you're dealing with MSFT of Google caliber lawyers, it's pretty much "take it or leave it". Very few people have the clout to ask for changes.

This will be interesting to watch. MSFT will not be able to out-lawyer (is this even a word ;)?) Google, as both can afford tons of lawyers. I could see some companies making employees sign all kinds of agreements just to scare them, even if ultimately they are not enforceable. Average Joe programmer doesn't have the resources to challenge anything and is afraid of violating them.

StupidScript

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 11:41 pm on Jul 20, 2005 (gmt 0)

Accepting such a position with a direct Microsoft competitor like Google

I'll bet the European courts would like to have heard that kind of description of what kind of company Microsoft considers itself to be during their anti-trust/bundling deliberations. Just what exactly do you do, Microsoft? Does it vary depending on which lawsuit you're defending/initiating?

So is Google a direct Microsoft competitor? Or maybe any computer/software/mid-tier services company is a "direct Microsoft competitor"? If he signed the NCA before MS rolled out their own search technology (still waiting for the lawsuit that figures out if it really is their own technology), is there a line of reasoning that might argue that MS was not a direct competitor at the time of the signing?

I'm liking the right-to-work argument. Theoretically, Microsoft could try to enforce a NCA against any employee who went to any other company in any remotely-related industry. And that's a little too broad, methinks.

ControlEngineer

10+ Year Member



 
Msg#: 30462 posted 4:55 pm on Jul 21, 2005 (gmt 0)

it's pretty much "take it or leave it"

If it is a contract you can't accept, "leave it" is the correct option. (assuming you have other possible work)

Very few people have the clout to ask for changes.

It doesn't take clout. Just big ****s. I have asked for changes in consulting contracts (non-disclosure, non-compete, and other terms) from some major corporations. The answer is usually NO and you have to make the choice described above. However, in one case I objected to a contract handed to me by a big company purchasing department, and it resulted in a meeting with a lawyer and a modification of the contract. (The original contract was written by her predecessor).

So if you can't live with the contract, ask to change it or just leave. It can't hurt to ask for a change as long as you are prepared to walk away.

out-lawyer (is this even a word ;)?

It is now.

The issues of enforcement of the NC and whether or not Google is a competitor will be interesting to follow. Neither company will be out-gunned. With people in the computer related industries (as well as most others) frequently changing jobs, this could have meaning for many of us.

randle

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 5:08 pm on Jul 21, 2005 (gmt 0)

According to the lawsuit, for a time Lee had been the person "responsible for overall development of the MSN Internet search application."

I could understand the legal uproar if he was leaving Google for Microsoft, but the other way around?

bakedjake

WebmasterWorld Administrator bakedjake us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 5:11 pm on Jul 21, 2005 (gmt 0)

I'm liking the right-to-work argument.

I think it's hilarious. This isn't a right-to-work case, a computer scientist can work at any computer science firm. Hell, with his credentials, he could probably chair any computer science department at an academic institution in the world. Right to work is total BS here.

So is Google a direct Microsoft competitor?

You've been reading too much Slashdot.

This is an issue of a Microsoft executive with trade secrets going to work for an identified competitor in the same job role. He's not going to do advertising systems research for Google, he's doing Chinese search R&D. Same damned thing he was doing at MS.

Google took a risk here, and I'm sure they knew exactly what they were doing when they took that risk. It'll be interesting to see how this all pans out.

I don't understand how someone could go work for a competitor and not disclose trade secrets from the former employer. The issue I have is that the knowledge that this guy has about MS could damage MS if Google knew it. That should determine how enforceable the non-compete is.

If MS loses, it will set an interesting precedent. I hope the non-compete stands.

[edited by: bakedjake at 5:15 pm (utc) on July 21, 2005]

walkman



 
Msg#: 30462 posted 5:15 pm on Jul 21, 2005 (gmt 0)

>> It doesn't take clout just b*lls

the thing is that most people--by far-- desperately need the job to pay this month's rent or mortgage. That was my point. People worry how the tie will reflect during the interview, imagine asking for a change to, what they are told is a standard, ND or NC agreement.

randle

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 5:34 pm on Jul 21, 2005 (gmt 0)

According to the lawsuit, for a time Lee had been the person "responsible for overall development of the MSN Internet search application."

I could understand the legal uproar if he was leaving Google for Microsoft, but the other way around?

ControlEngineer

10+ Year Member



 
Msg#: 30462 posted 7:02 pm on Jul 21, 2005 (gmt 0)

the thing is that most people--by far-- desperately need the job to pay this month's rent or mortgage. That was my point. People worry how the tie will reflect during the interview, imagine asking for a change to, what they are told is a standard, ND or NC agreement.
I don't think Lee's problem is covering the rent. Most people who desperately need a job do have much more to worry about than NC contract terms. They are taken advantage of in worse ways--like knowing that if they report their employer for violation of wage-hour or safety laws they will lose their job and future employement. Most of the times I have to sign a contract it is for short term work and to lose it won't be that bad. In the recent economic slump I had to enter agreements that I would have walked away from when times were better.

According to the lawsuit, for a time Lee had been the person "responsible for overall development of the MSN Internet search application."

I could understand the legal uproar if he was leaving Google for Microsoft, but the other way around?
Microsoft certainly would not want Google to know about MSN Internet search applications. It could be to Google's advantage to know about a future competitor. Likewise, if I were developing a new word processor to compete against MS Word (fat chance!) I would not want Microsoft to have any advance info or inside info and would do what I legally could to protect the information. Chance are great that I would be crushed even if MS didn't have inside information. If they had the inside information, my chances would be far worse.

Kirby

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 1:08 am on Jul 22, 2005 (gmt 0)

Sure have to admire Google for the take it to 'em approach. No doubt Google feels that MS is in the weakest position.

Powdork

WebmasterWorld Senior Member powdork us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 30462 posted 1:43 am on Jul 22, 2005 (gmt 0)

<tin-foil-hat>Both companies want to be able to retain their intellectual work force as well as their trade secrets. Google did this to intentionally lose the case and set precedent in the courts that will protect what they already consider to be their greatest asset</tin-foil-hat>

Damn helicopters.

insomnia

5+ Year Member



 
Msg#: 30462 posted 12:31 am on Jul 23, 2005 (gmt 0)

I wonder what happend to Google's "do no evil" policy. Of course, up to judges to figure whether or not this is within either company's rights.

hutcheson

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 30462 posted 5:36 am on Jul 23, 2005 (gmt 0)

The trick is, the law is different in the two states. In California, the agreement Microsoft imposes on its employees is apparently illegal, while it's not in Mordor, um, Redmond.. You can argue about whether that's a good thing or not: but neither judge will ask your opinion.

Microsoft is well advised to try to keep its secrets -- since most of its "intellectual property secrets" are simply of the form "that's the guy we stole this technique from" or "here's the illegal scam we used to drive that guy out of business" -- that is, things that would get them into court, deep into fines, possibly into jail if revealed.

ControlEngineer

10+ Year Member



 
Msg#: 30462 posted 6:31 pm on Jul 24, 2005 (gmt 0)

insomnia:
I wonder what happend to Google's "do no evil" policy.

I don't think that Google did any evil by hiring Lee.

This 39 message thread spans 2 pages: 39 ( [1] 2 > >
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