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A lot of people will tell you that non-competes aren't enforceable.  My experience with them says that the company with the most leverage/biggest checkbook can inflict a lot of financial pain on a smaller competitor that poaches talent (when there's a signed non-compete in play_.

The rules as I see them:

1.  Bigger companies can afford to write checks to enforce a non-compete when a much smaller competitor steals talent from them.

2.  Smaller companies can't do much to big companies who steal talent (where the past employee of smaller company had a signed non-compete).  They're basically starting a battle they can't afford.

3. Big company vs big company is more complex. Both have resources, so the considerations are more strategic - things like influencing others to not challenge non-competes comes into play, IP considerations, etc.

My experience is the biggest checkbook wins.  That means that while the non-complete may not be enforceable, there's still a leveraged play to be made to inflict pain or play strategic games.

But if you're interested in the actual legal merits of non-completes, movement in the self-driving car industry tells you they are DOA.  More from Tech Times:

"Apple is beginning to acquire high-profile employees to help develop its self-driving software project, which reports say is already behind schedule at this point.

The Information reports that Apple has hired Jaime Waydo, who previously worked as a senior engineer at Waymo and was involved in the development of one of NASA's Mars rovers. An Apple spokesperson has since confirmed the hiring but didn't reveal what she would be working on inside the company.

Waydo, who served as head of systems engineering at Waymo, is described by her colleagues as "instrumental," according to the report. She led safety verification for the company's prototypes and delivered input on when it was safe to launch on-the-road tests in Phoenix back in 2016. It's safe to assume she'll do similar work in Apple's turf." No driver

Think about that for a second.  An industry with max innovation going on allows creators to move between companies.  If that doesn't tell you that non-competes are dead (see my rules, you can still inflict pain, but we're talking here about the legal merits), nothing will.

Part of that is likely due to the fact that in the PRoC (People's Republic of California), non-competes face such a hostile legal environment that companies don't even try.

Which brings us to the the 4th rule of non-competes to add to my 3 rules at the top of this post:

4. The new way to enforce TAFNAANC (the agreement formerly known as a non-complete) is to make employees sign hardcore Intellectual Property (IP) agreements, with strong provisions not to transfer IP or infringe on IP created at your company.

How do you do that?  I don't know, but look no further than the alleged theft of trade secrets by a former Google engineer Anthony Levandowski—and the alleged use of those secrets by Uber—which was at the center of Waymo’s lawsuit last year vs Uber.  

It wasn't a non-complete that crushed Uber, it was the allegation that Levandowski used trade secrets at Uber developed at Google/Waymo.

For a lot of you reading this, you're thinking this is all a little bit deep when it comes to how you should consider non-competes - and you're right.  Continue to have narrowly drawn non-competes signed by sales pros and others that make sense if legal in your state.  They are a barrier people have to think about.

But if your product is IP heavy, consider re-looking at your IP agreements people sign when they come info the company.

Oh yeah - then put some golden handcuffs on people in the form of LTIPs so they have to think twice about leaving money on the table before leaving.  LOL.

Good luck!

  

Comments

maria helm

But isn't there also something with the law of non-competes that says you can't enforce that if the employee would basically not be able to get a job then? The number of places someone who specializes in self-driving car technology could work has got to be less than 30 or so, and probably all applications would be considered "competing". This is not the same as a more general skill, like "writes java code" or "mig welder".

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