Non-Compete and Non-Solicitation Agreement Assignment Requirements
You work for Google in Mountain View, CA for 18 months developing the software for Google’s self-driving car. Google then transfers you to their Cambridge, MA office to work on Google Apps for Android Auto. After 6 months you decide that you (a) love the Boston area, partly due to a significant other who lives and works here, and (b) you can build a better self-driving car. You start talking to some people you know including co-workers about this project, write a business plan, and line up financing. After working at Google for 30 months, you screw up your courage, take a leap of faith, and then resign.
Two of your friends from California think your project is much more exciting then working at Google and ask to join you. You agree to hire them so they resign from Google as well and move east to work with you. Google immediately sues you claiming you broke your non-solicitation agreement.
Using the attached Sample Non-Compete and Non-Solicitation Agreement as an example, if Google sues you in Massachusetts will you win? What would the result be if they sue in California?
Solution
Application of Non-Compete and Non-Solicitation Laws
If the former Google’s was to be sued in Massachusetts, the likelihood of winning the non-solicitation suit is low regardless of the fact it was signed back in California. Massachusetts does not have any geographical limitations to the enforcement of the non-solicitation agreement (Daller, 2014, p. 136). This makes any non-solicitation agreement from any other states viable and applicable within their boundaries. It is only in cases where such an agreement has surpassed the timeframe that was stipulated for its application that it would be considered as void. Nevertheless, in cases where it has still not met any criteria for dismissal, the agreement is vetted for reasonability, with all the facts put in consideration, before it can be considered as applicable or not (Southgate & Glazer, 2015, pp. 18-29). In this case, given that the former Google employer directly contacted his former colleagues at google and gave them reason to ditch the company and join him, he violated the non-solicitation agreement. On the other hand, by deciding to make self-driving cars of his own, the employee could be argued to have violated the non-compete agreement as Google’s products are sold to their entire United States market.
However, if Google were to sue their
former employee in California the employee is likely to win his case given the State’s
stance on enforceability of non-compete and non-solicitation agreements. The culture
of business startups and individuals leaving frequently to other areas and
being required to go and apply their skills in other organizations in that
provide them with livelihood, has led to limited enforceability of the
non-solicitation and non-competent agreements (Miller & Jentz, 2012, p. 267). The California law
has established various limits to reasonableness regarding what employee of any
company can be prohibited from doing. In this case, the non-solicitation
agreement stretches beyond the area in which it was deemed applicable, and the
laws under which it was established. As such, under the Californian law, it
would be deemed as unreasonable, in terms of scope, to impose the provisions of
the non-solicitation agreements on an employee who has moved to a different
geographical location, governed by different laws, and responding to a
different market (Cross & Miller, 2012, p. 375).
References
Cross, F. B., & Miller, R. L. (2012). The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues. Mason, OH: South-Western Cengage Learning.
Daller. (2014). Business Torts: A Fifty State Guide. New York: Wolters Kluwer Law and Business.
Miller, R. L., & Jentz, G. A. (2012). Business Law Today: Comprehensive: Text and Cases. Mason, OH: South-Western Cengage Learning.
Southgate, R. W., & Glazer, D. W. (2015). Massachusetts Corporation Law and Practice. New York: Wolters Kluwer.