IT Employment

Did Google misuse non-compete agreements of DoubleClick employees?

Reportedly, Google managers asked DoubleClick employees to sign non-compete contracts and then laid them off a week later. Can they enforce these contracts?

The Web is abuzz with reports from some recently departed DoubleClick employees who are saying that Google managers asked them to sign one-year non-compete agreements and then laid them off one week later.

Some people are condemning Google for its devious behavior, while others say that Google may be evil, but these non-compete clauses are not enforceable, at least in California. It's true they are, for the most part, not enforceable in California (California Business and Professions Code Section 16600). However, the majority of DoubleClick's employees work in the offices in New York. So where does that leave them?

Non-competes in employment contracts for IT pros are becoming increasingly more common due to the amount of intellectual property involved. But the Google case raises the question of how much of a non-compete is enforceable.

What is a non-compete?

According to the University of Minneota Institute of Technology, non-compete agreements are:

"... either a separate agreement or a clause in an employee handbook that prohibits an employee from working in a related business in a designated area for a specific amount of time. "

Legal experts say that most non-competes don't make it to court. If they do, a judge can rule in favor of the non-compete if it can be proven that it's reasonably limited in time and space or necessary to protect a legitimate interest.

However, a lot of people adhere to non-competes either because they're not aware of the fact that they're not enforceable in some states or because they're just reluctant to pay a lawyer to help them fight the clauses. It's always worth at least checking out the laws in your state.

Have you had an experience with a non-compete? If so, what was the outcome?

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

13 comments
MichP
MichP

Here's a link to an article about how it works in Oregon. A new law just came into effect at the beginning of this year: http://xpowerideas.blogspot.com/2007/10/oregons-new-non-compete-statue-closes.html I do know a company that has a non-solicit agreement they are enforcing. In the case of one ex-employee, I think the company is justified. It is very small and can't afford to "give" him its customers. He was trying to start his own business using his previous employer as a kick start.

trackpads
trackpads

I think Google may have to rethink the motto there boys....

luc_andre
luc_andre

I know this is kinda off topic, but this practice is used a lot in wrestling. It's used to ensure that the leaving wrestler doesn't show up on a competing company's broadcast the next week and begin to slander the previous company or bring fans with them from the hype they got from the previous company. With the length of time (usually 90 days) in the no-compete, the hype dies out and fans forget about the wrestler, lessening the impact of their arrival on a competitors product. Usually it's the WWE (Vince McMahon) who issues these to wrestlers who leave the company. (to places like TNA Wrestling).

toni.bowers_b
toni.bowers_b

Reportedly, Google managers asked Doubleclick employees to sign non-compete contracts and then laid them off a week later. Can they enforce these contracts?

Boston
Boston

Maybe the laid off employees need to put a class action suit against Google. It does not take a rocket scientist to figure out Google set their employees up. They knew exactly what they were doing.

kingttx
kingttx

I hate to say it, but I'm beginning to see a little more evil from Google. I like their summer of code, and allowing their employees 20% of their time for their favorite projects, and Google using solar power; but there are some other policies that appear to fly in the face of "do no evil". Hmmm...

IT.Consultant
IT.Consultant

protect an employer's trade secrets from its competitors. After 2 weeks of employment, how much insider information can a new hire really gain? Besides, it sounds like Google didn't have a valid reason to terminate these employees. If Google didn't hire them in good faith, did it only to undermine a competitor and deny people a way to earn a living, what sensible judge would rule in favor of upholding a non-compete?

GSG
GSG

I know in Missouri that judges have ruled in favor of the employee in a couple of cases, however, these cases are ones where the employee signed the agreement, and were not paid the non-compete "bonus". I don't know if it was because of this employers policy, or it's some wider rule, I just know that I refused to sign it for a measly $1/hr extra, and have never regretted it as I left 3 months later for a competitor for a lot more. I'd say if these folks push it, they'll win.

Trekkie
Trekkie

Legally they might be able to enforce them but I doubt it. Personally I don't have a problem with non-competes as long as I'm the one choosing to leave. If it's the employer who has terminated an employee without cause, i.e. layoffs, etc., then I think any non-compete the employee signed should be non-enforcible.

JohnBoehlke
JohnBoehlke

During my career and I have had to sign a couple of non-compete agreements and in my case they most likely would have been enforceable. However, in Colorado non-compete agreements are generally disfavored by the courts and may not be enforceable. By statute in Colorado any agreement ?not to compete which restricts the right of any person to receive compensation for performance of skilled or unskilled labor for any employer shall be void.? See Colo. Rev. Stat. ? 8-2-113(2). The statute does allow for four exceptions to the general rule: First, non-compete and non-solicit agreements may be enforceable when they are entered into as part of the purchase and sale of a business. Second, they may be enforceable if they are designed to protect the employer?s trade secrets. Third, they may be enforceable in connection with contractual provisions allowing the employer to recover the expense of training an employee who has worked for less than two years. Fourth, non-competes and non-solicits may be enforceable against executive and management personnel and officers and employees who constitute professional staff to executive and management personnel. For more detail see ?Enforceability of Employee Non-Compete Agreements in Colorado? http://www.ksrlaw.com/NewsPage.aspx?id=LegalUpdates&article=LegalUpdates00052803-3

fatman65535
fatman65535

Non compete clauses are often found in the broadcast industry. I remember many years ago, virtually the entire on air staff at a local radio station quit en mass; and walked over to a competing station the next day. That is a station manager's worst nightmare. Since I knew a couple of the individuals involved; I also knew that the station manager where they left was a colossal a-hole. What goes around.....

spam
spam

Before signing any contract, you have the right to add a provision of your own: In this case some sort of signing bonus or demand for a reasonable length of minimum employment would be suitable. If your potential employer balks at this, be suspicious of their intent. Your first duty is to protect your own ass (because nobody else will).