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CIO
by Scott Wilson on November 4, 2008

More interesting from the CIO perspective is the potential for possibly the highest profile non-compete suit since the Microsoft-Google spat over Kai Fu Lee in 2005, which after some suprising preliminary victories for Google (hiring Lee away from Microsoft in apparent violation of his non-compete) was disappointingly (for spectators, at least) settled out of court with undisclosed terms.
The Lee matter was seen initially as a slam-dunk for Microsoft given the wording of the agreement and the venue of the suit (Washington state) and so the setbacks and settlements seemed to indicate a new weakening of non-compete clauses. After all, if legal powerhouse Microsoft can't enforce them, how can you? The Papermaster issue may well put the nail in the coffin; set in California, a state notorious for failures to enforce non-competes, and with grounds which are less than compelling to the layman's eye, it seems unlikely that IBM will prevail.
I don't doubt that businesses will continue to force staff to sign non-compete agreements as a condition of employment, but I think it increasingly makes the business look weak and out of touch to do so. If they aren't worth the paper they are printed on, all you are communicating to staff asked to sign them is that you don't intend to use a carrot to retain their talents, but a stick, and a small and laughable one at that. I don't think it's a way to attract or retain top talent anymore, if ever it was.
Permalink: Competes and Non-Competes
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