Although a bit off-topic, Valleywag reports that Google forced recently acquired DoubleClick employees to sign non-compete agreements...a week before the search engine giant fired them. Many of the commenters to this post noted that the non-competes are likely unenforceable, particularly in California where they are generally illegal, and suggested that Google should have used its own search engine to find this out.
Based on my own past somewhat comparable experience, I've done a lot of research on why companies, particularly big, rich companies, demand non-compete agreements and I would wager a lot of money that Google's lawyers knew very well that few judges would ever enforce those non-compete clauses. Google is banking on the mere threat of litigation over those covenants to stifle competition. That's precisely what makes Google's action particularly evil.
It's safe to say that few, if any, of DoubleClick's fired employees can afford to battle Google in court if Google were to file a complaint against those employees for violating their non-compete agreements. And given that most of the fired employees were in New York, where non-competes are legal although still dubiously viewed, Google's $1,000-per-hour attorneys could easily chew up any fired employee's life savings by simply filing a complaint knowing full well that the company would probably not prevail in the end. (That's assuming that the employee can even find a good attorney willing to go up against Google. Most lawyers wouldn't even take the case.)
The fired employee at that point has two choices: join the legal battle that Google has started, ending up bankrupt and still-unemployed, or forego work in his or her profession for a full year. To Google's credit, the non-compete provisions last only one year -- many big companies try to sneak in three and even five-year non-compete clauses.
So, not only did Google fire the DoubleClick employees, it behaved like a lot of big, unthinking traditional corporations. It shoved a harmful and probably unenforceable contract down the throats of those vulnerable workers who are least able to defend themselves in the hope that the threat of economic devastation would cow them into submission. That's evil.
Cynthia Brumfield at 8:17 AM|Comments(2)
Rob,
I hope you're right, although I suspect that as is true with many things Canadian, Canadian companies are just nicer than American companies :)
Having once been caught in the horrible grip of a non-compete covenant which was being interpreted extremely broadly, I actually compiled "horror stories" from others in a similar situation with an intent to write about it. I interviewed some employment attorneys and some corporate folks and discovered that it's a common tactic by companies with lots of expendable dough to intentionally use non-competes as weapons against former employees -- in pursuit of personal vendettas, to stifle competition or merely for grins. Which is one reason courts hate them so much (not to mention the fact that lawyers themselves can never sign non-competes.)
Whether Google intended to trap those DoubleClick employees or not, it now has a hammer to hold over their heads. Even if it were a boo-boo to include those covenants in the contract, DoubleClick employees proceed to work in their chosen fields at their own risk...and the smart ones know that.
(Yup, $400/+hour for an associate, $650+/hour for a partner and $1,000/hour for a superstar.)
Posted by: Cynthia Brumfield at April 11, 2008 1:09 PM
$1,000? Where do I sign? Just kidding. Sort of.
It always surprises people when I tell them that these agreements - or these clauses within other agreements - are often trotted out just because they're in "the form". (Actually, I've seen you-wouldn't-believe-how-much remarkably dumb stuff "in the form" for many kinds of agreements.) It might have been - and this is sometimes the case in an M&A context (at least in Canada) - that the employees of the newly acquired company are asked to sign the employment docs of the buyer just as a matter of routine. Eg, because it's on a checklist for someone in HR.
And it's sometimes the case that clauses like this are in those forms of agreements just because way back in the mists of time someone thought that they might as well leave it in the draft prepared by a lawyer because *some* of the employees potentially affected by it - eg, senior folks - might be good people to get the promise from.
And so on, and so on, until your eyes would bleed, really, if you knew what happens on the inside.
It might well have been evil. But without really knowing the deets there's a good chance it was innocent, though really rather just-can-you-believe-they-did-this dumb.
Sigh.
Posted by: Rob Hyndman at April 11, 2008 12:51 PM
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