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Competes and Non-Competes

Filed in archive CIO by Scott Wilson on November 4, 2008

Competes and Non-Competes
You may have been, as I have, vaguely following the IBM versus Apple shootout (now seemingly destined for litigation after the opening press release bombardments have failed to budge either party) over former IBM VP Mark Papermaster's move to take over the iPod/iPhone division at Apple. It's entirely in character for IBM to get its underwear in a knot over something of this nature but as MacBlogz points out, it's a little odd to think that Apple (already where most people would define the cutting edge of the portable music player and phone market) would be looking to the ever-trendy IBM executive corps for inside tips on how to dominate the device market. If I were Apple, personally, I'd be poaching IBM veeps to take over my server and/or desktop divisions in hopes of harnessing some of their long experience wrangling the enterprise market. But that's just me, I guess.

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.






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Tags: noncompete  competes  2008  2007  enterprise  competes+competes  advertisement+book  book+yours 

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