Google vs Uber: Why High Performers with Non-Competes Are Always At Risk When Joining New Companies....
There's this old idea that non-competes and most types of NDA/IP agreements are either flimsy or negotiable. While that may true in some cases, my experience is that you can get sleepy/lazy related to how you consider these as an HR Leader.
My experience as an HR leader recruiting high level candidates with non-competes/NDAs/IP agreements is as follows - they mean nothing until they do, then in a giant pissing contest, it's usually the company with the biggest checkbook that wins.
Case in point - Uber's recent recruitment of former Waymo/Google exec Anthony Levandowski, who's a specialist in self-driving car technology, which is going to be kind of important over the next 20 years.
Here's a rundown of what's up in the Google/Uber talent square-off over Levandowksi from RJ Morris at Fistful of Talent:
Here’s the backstory. Google’s Waymo division is focused on self-driving cars. Their lead guy in this space was named Anthony Levandowski. Last year, Levandowski quit Google with no notice to work at his own start-up named Otto. Then Uber bought Otto shortly after, which means they got Levandowski, which means they got his knowledge. Huge hire. Great job. Golf clap all around.
Googles was less than pleased. Whoops.
Shortly thereafter, Waymo sued Uber, saying Levandowski stole proprietary information. This happens sometimes. One company is mad their competitor stole a good person, so they sue and claim it was unfair. Here’s how that normally plays out:
Former employer: He took trade secrets. We are suing.
New employer: He didn’t steal anything. And they’re not trade secrets. He’s a stand-up guy. How dare you. Stop being a baby.
Former employer: Man, it’s hard to prove trade secrets got stolen. Ok. We’ll settle.
New employer: Maybe, it depends.
But, kids, that is not how it’s going down this time. At all. Google has a case, the judge is frustrated at Levandowski and Uber just stopped backing their guy. In fact, Uber told him to play ball with the court or risk getting fired. Awesome.
Last week Judge William Alsup ordered that Uber “exercise the full extent of [its] corporate, employment, contractual, and other authority” to force Levandowski to return any downloaded materials to Waymo. Following that, Uber on May 15 sent a letter to Levandowski giving him a choice between “deny[ing] ever having taken any downloaded materials from Google” or hand over any materials he might have taken from Google. If he failed to comply, he would risk termination of his employment.
RJ's rundown was from two weeks ago. Last week, Uber blinked and fired Levandowski (click on the link to read the account of Uber's reasons).
The story follows some of the experiences I've had. It goes a little something like this for the HR leader:
- You're told a certain flavor of talent is important.
- You go find the talent. The talent has an entanglement of non-competes/NDAs/IP agreements with his/her current employer.
- You, the HR leader, run the situation up the flagpole to your C-level and legal. The talent is important enough where all check off on the hire and want to move forward.
- You hire the special talent. The other company gets pissed and makes it highly legal.
- The legal fees mount. The new hire is limited in their effectiveness because of the holding pattern legal action causes.
- Your company blinks and fires the key hire, because they can't stomach the legal fees/liability.
For most of us, #6 happens above when the company in question just can't see a path to keep paying six figures in legal fees.
Google brought the pain to Uber via great liability with a judge unfriendly to the Levandowski case, which caused them business risk beyond the hire/legal fees.
Don't let anyone tell you that non-competes/NDAs/IP agreements don't mean anything. The company with the greatest will/checkbook/emotional reaction usually wins skirmishes over these items. This truth starts with key sales and technical talent, with liability increasing as you move up the org chart.