Google Countersues Microsoft

By now most people have heard about Microsoft suing Google and Kai Fu-Lee because Lee, a former exec at Microsoft, went to work at Google at a new research and development office in China. The lawsuit cites that Lee signed a noncompete agreement in 2000, preventing him from working for a competitor within a set period of time of leaving Microsoft (1 year, I believe).

Apparently, Google has filed a countersuit (in California) stating that the non-compete contract violates California laws giving workers the right to change jobs. Obviously Google would like to bring the battle to California court due to having incredibly lax non-compete laws, however, Microsoft's claim (and where Lee worked and signed his agreement) was filed in Washington. Interestingly, the job Lee would have is based in China.

I have to side with my employer (Microsoft, if you haven't been paying attention) on this one. Google said in a statement: "Google is trying to create an environment for innovators. Microsoft is focused on litigation and intimidation." In a naive kind of way, I can almost see the corporate Panacea Google wants here. Would outlawing noncompete agreements increase innovation and retention strategies? Maybe.

But the fact is, Lee signed an agreement as part of his role at Microsoft. If he didn't want to enter into that type of arrangement, he should've refused the job or asked for that restriction to be removed. The agreements each employee signs are very clear, it's not like some spyware EULA buried in 30 pages of text viewed in a 4 line text box.

I don't think having noncompete agreements hurt innovation, but rather help promote integrity. The fact is, in certain positions people will have intimate knowledge of trade secrets and internal workings that make the employee more valuable not just because of their skills and talent, but because of the privileged knowledge they carry. There's no reasonable way a person can "withhold" using that information if they jump ship to a competitor -- hence, the 6 month or 1 year delay.

I respect that fact that many people will have different views on the legality behind noncompete agreements. Still, regardless of the outcome, I feel it's unfortunate to see the slinging between Google and Microsoft. The unethics clearly lie on Lee, as he signed the agreement and doesn't wish to honor it now. Wouldn't that say something to Google about his loyalties or "honor"?

Comments (3) -

7/23/2005 1:22:41 AM #

It is all in the interpretation. That is the crack in the cash box where the lawyers wedge their gold-plated prybar.

Ethical people rarely have problems signing the ridiculously draconian agreements that are common today, because they would not do anything that would violate the purpose of those agreements in the first place. Unethical people often don't have a problem signing because they know that the more restrictive the agreement, the less enforceable it becomes. In the end, unethical people will behave unethically and litigous companies will litigate, regardless of what any signed agreement says.

In the case of Mr. Lee, I'd have to know more about why they think his activities at Google would put him in a competitive position with Microsoft. If Microsoft's non-compete agreement refers to all MS business activities, then I agree that the agreement unfairly limits the employee's ability to ply his or her trade. MS has their fingers in so many pies that you would have a tough time NOT competing with them when you leave for any other company in the software industry.

In the end, my suspicion is that Mr. Lee did something dumb and used proprietary MS information (as opposed to "general" industry knowledge) on Google's behalf. Otherwise, MS probably wouldn't have much of a leg to stand on, regardless of what agreement Lee signed.

7/23/2005 7:53:29 AM #

You have a good point about questioning Lee's role @ Google.  I think in this case, there's a definite conflict.

At MSFT, Lee was a VP in the Natural Interactive Services Division, which included a lot of the core search technologies.  According to his corporate bio, "Lee founded Microsoft Research Asia, which has since become one of the best research laboratories in the world."

Coincidentally, Lee's position at Google is to head up a new research center in China.

Most of my information is coming from the press on this, so we have to take into account any possible spin factors.  Still, the facts seem to indicate this is a particularly egregious act.

Michael K. Campbell
Michael K. Campbell
7/24/2005 2:44:59 AM #

I despise non-competes. I REALLY hate them. I hate that they're part and parcel of corporate  America.

You see, I THINK that existing laws about theft of intellectual property, trade secrets, contact and customer lists, etc. should be enough to keep everything in check. The problem? A lack of morals, and attempts to skirt those laws has caused companies to GRASP for whatever they can - including STUPID things like non-competes. And lets face it, non-competes are written by lawyers. When LAWYERS are trying to keep people legal and moral... then we should all be able to recognize that we've got a problem.

AND, as much as I hate non-competes, I'd have to say that in today's society they probably HELP foster innovation. Very few organizations can innovate for the sheer purpose of innovation (because most people need to pay bills). So capitalism is involved. Innovation therefore rides on the back of financial investment. The investment that FUNDS that innovation therefore should be able to demand some form of loyalty from the innovation - without fear of someone using it to better their own career at the sake of the innovation and the funding that went into it.

So, yeah... I think that Google trying to counter sue here is in very bad form. They're encouraging disloyalty and a moral lapse because they can't wait to get their hands on MS technology that they haven't purchased, but that they're potentially going to steal right out of someone's head.

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