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Seagate Says Ex-Employee Can't Work For Competitor 585

Posted by simoniker from the knows-too-much dept.
deweller writes "According to a story at MacCentral, Hard drive maker Seagate Technology LLC is seeking a court injunction to prevent a former employee, Pete Goglia, from going to work for Western Digital Corp. any time in the next 2 years, saying Goglia knows too much about Seagate's hard-drive reading and writing technology to work for a competitor."
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Seagate Says Ex-Employee Can't Work For Competitor More

Seagate Says Ex-Employee Can't Work For Competitor

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  • Non-Compete Agreement (Score:4, Informative)

    by Anonymous Coward on Monday August 09, 2004 @04:08PM (#9923797)
    If Pete Goglia signed a non-compete agreement with Seagate then it has stipulations preventing him from working at a competitor for a specified time. It was an agreement he may have signed to work for the company. It is nothing uncommon in the US to have this kind of contract. Usually, the company will give you stock options and the if the stock options go below the strike price than you have to pay the difference in the current stock price if you break this agreement.

    • Non-Competes.... (Score:5, Interesting)

      by Hanna's Goblin Toys ( 635700 ) on Monday August 09, 2004 @04:11PM (#9923835) Homepage Journal
      These exist on the very fringe of legal contract law. I would be very surprised if any of them have withstood a jury trial. Can a legal agreement which prevents a worker from working to feed his family be legal? Non-competes are valid even if you are fired, meaning they can fire you and prevent you from working for a competitor, which is basically contractually enforced unemployment. This would seem to be highly UnAmerican(tm) and I think the courts would frown on it.

      What is the case law precendent?

      • Re:Non-Competes.... (Score:5, Informative)

        by CountBrass ( 590228 ) on Monday August 09, 2004 @04:14PM (#9923892)

        In the UK such contractual clauses are explicitly null and void: it's called restraint of trade.

        • Re:Non-Competes.... (Score:5, Informative)

          by rikkards ( 98006 ) on Monday August 09, 2004 @04:24PM (#9924027) Journal
          Canada too. I went through this at one point where I was working for a contracting company and decided to move to another. First tried to scare me out of it but I lawyered up. They dropped it.

          • Re:Non-Competes.... (Score:5, Interesting)

            by Rumor ( 99829 ) on Monday August 09, 2004 @05:17PM (#9924553)
            That doesn't mean that such clauses are not legally enforceable in Canada, or in the UK. There's a solid foundation of case law supporting the validity of non-competition clauses in both countries. Put very simply, the restrictions must be for a reasonably limited time, and must restrict using the specific knowledge gained from the former employer, but typically not restrict a person from using their general expertise in the area of research/development.

            The fact that your former employer dropped the suit could mean a lot of things, such as: they didn't think it was worth following through, even if they thought they could win; or, they realized there was a good chance a judge would find your non-competition clause to be unreasonable.

            But that doesn't mean it can't be done at all. These kinds of contracts do exist and may be legally enforceable.

            • It's called "consideration" (Score:4, Informative)

              by xtal ( 49134 ) on Monday August 09, 2004 @09:12PM (#9925976)
              That doesn't mean that such clauses are not legally enforceable in Canada, or in the UK. There's a solid foundation of case law supporting the validity of non-competition clauses in both countries. Put very simply, the restrictions must be for a reasonably limited time, and must restrict using the specific knowledge gained from the former employer, but typically not restrict a person from using their general expertise in the area of research/development.

              These contracts are legal, I believe, if and only if there is consideration for the signee. This would mean you would have to recieve compensation, or something, in exchange for you not working. So if Seagate was willing to pay him a fair amount - likely his standard wages, or the difference between what he made there and a non-competing firm - then a judge in Canada would find this reasonable.

              As a rider on a standard employment contract, based on what I know about contract law, any judge would interpret there to be no consideration for the signee making the contract void. Canadian judges tend to be sane and reasonable, for the most part.

              I'm not a lawyer, of course, and this is a layman's interpretation from a text.

              • Re:It's called "consideration" (Score:4, Insightful)

                by cthugha ( 185672 ) on Monday August 09, 2004 @09:28PM (#9926040)

                These contracts are legal, I believe, if and only if there is consideration for the signee. This would mean you would have to recieve compensation, or something, in exchange for you not working.

                The contract as a whole is only valid if it is a mutual promise for valuable consideration, but this does not mean there must be a quid pro quo for each individual term of the contract. The consideration for a contract of employment consists only of the benefits that accrue to the employee generally, not of specific benefits for each obligation the employee is required to fulfil.

          • Non-Competes vs IP? (Score:5, Interesting)

            by MachDelta ( 704883 ) on Monday August 09, 2004 @05:18PM (#9924554)
            Really? Thats interesting.

            I wonder... The company I work for here in Canada had me sign an agreement when I was hired that basically said that if I came up with any brilliant, million-dollar ideas related to the industry for two years (IIRC) after I left the company, they'd basically "own" those ideas. I thought it was kind of strange to try and claim someone elses "IP" like that, and wondered to myself if they had ever tried to enforce it. Anyone know? I sincerely doubt its ever happened, since the company is primarilly shipping and logistics... not a whole hell of a lot of room to drastically innovate, unless you happen to invent a teleporter or something... but now i'm curious if these kinds of agreements are legal in Canada too, seeing as how the competition-employment ones are (apparently) not.

            Quick! Where's a 'IAAL' on Slashdot when you need one!? (Oh, wait...)

            • Re:Non-Competes vs IP? (Score:4, Insightful)

              by John Courtland ( 585609 ) on Monday August 09, 2004 @05:44PM (#9924749)
              Jiffylube does the same shit, believe it or not. If you invent a faster way of changing oil and you are an employee of Jiffylube at the time, they will claim ownership of it. Jiffylube, for those of you who don't know, is one of those 15 minute oil-change garages that hires mostly highschool-level wanna-be mechanics. Seems kind of on the border of "we own you 24/7 while under the employ of JiffyLube". Seriously, if a company tried to claim ownership of anything I invented on my own watch, they'd be at the bottom of a lake by the morning.

        • Re:Non-Competes.... completely wrong (Score:5, Informative)

          by mqx ( 792882 ) on Monday August 09, 2004 @04:33PM (#9924123)

          In the UK such contractual clauses are explicitly null and void: it's called restraint of trade




          You are completely and utterly wrong. The circumstances in the UK are similar to most of the rest of the western modern world: appropriately scoped non-compete agreements are allowable and enforceable. What "appropriatley scoped" means all depends upon the circumstances and nature of the work, but for R&D employees working on new technologies, 12 months is not uncommon.

          • I once worked for a video game developer, some twenty years ago. Some months after I was hired I was told that I had to "sign a few standard forms" that were overlooked during the initial hiring process. It turned out that what they wanted me to sign was a rather Draconian non-compete with a five-year period in which I couldn't work in the video game industry, and that anything I might develop during that period regardless of its relevance to the game industry belonged to them. I point-blank refused to s

      • Re:Non-Competes.... (Score:4, Interesting)

        by Aneurysm9 ( 723000 ) on Monday August 09, 2004 @04:17PM (#9923945)
        I can't cite precedent right now, but I can tell you that non-compete clauses are generally valid and have survived both jury trial and appellate review. That said, such clauses must typically be appropriately limited in scope. They cannot prevent employment for excessive time periods, two years is likely to be found not to be excessive. They cannot prevent employment in businesses unrelated to the former company's core business. Since Seagate and WD both make hard drives, I don't think that one will be a problem either. As for such clauses being UnAmerican, nothing could be further from the truth. It's a classic example of American thinking, use your power to prevent the competition from horning in on your resources, human or natural.

        • Re:Non-Competes.... (Score:5, Insightful)

          by BJH ( 11355 ) on Monday August 09, 2004 @04:22PM (#9923999)
          So... someone who's spent the last however many years designing new hard drive technology is supposed to throw that experience away and get a job at McDonalds or something for the next two years?

          Why don't you just all sign yourselves into voluntary slavery. Oh sorry, it seems that you already have...

          • Re:Non-Competes.... (Score:5, Insightful)

            by DaHat ( 247651 ) on Monday August 09, 2004 @04:28PM (#9924074)
            Like it or not, as the parent poster said, non-compete agreements have held up in court many times.

            You speak of selling yourself into slavery... I agree it is a trade off, but it is an agreement that one willingly makes. If you do not like the prospect of one, then work where they aren't required... and yes, last I checked, McDonalds is always hiring!

            An interesting aspect of non-competes is that an employer may require your signature on one as a condition of employment or continued employment.

            So even you could receive the question, "Want the job? Then sign, if not, leave."

            • Re:Non-Competes.... (Score:5, Interesting)

              by Aneurysm9 ( 723000 ) on Monday August 09, 2004 @04:51PM (#9924303)
              Actually, I think in most states continued employment is not sufficient consideration for a non-compete clause. The theory is that it's unduly coercive because of the unequal bargaining power of the parties when one party controls the ability of the other to earn a living. Now, if you don't already have a contract and are employed at will, then your employer certainly could require a contract as a condition of continued employment and a non-compete clause as a condition of a contract, but if you already have a contract then some additional consideration is required for a non-compete to be valid and refusal to agree to a non-compete will not likely be viewed as justification for the employer to breach the existing contract and terminate your employment.
              • This is the most important post in the thread. Mods, make sure it stays at 5.

                They key word here is consideration. I can't contractually obligate you do do something, no matter what is signed, unless I've given you something for that obligation. A signing bonus or other lump sum is acceptable consideration for a contract. Making the obligation a "condition of employment" is generally not. There must be quid pro quo for the contract to be legal.

        • Strange... (Score:5, Interesting)

          by Hanna's Goblin Toys ( 635700 ) on Monday August 09, 2004 @04:23PM (#9924018) Homepage Journal
          When you say "horning in on your resources", do you mean that when GM fires a CAD engineer, they have the right to keep that CAD engineer from doing CAD for the next two years, thereby ruining his resume?

          That seems odd... thanks for the case law info though!

          • Re:Strange... (Score:3, Insightful)

            by orderb13 ( 792382 )
            They can't keep him from doing CAD work period. They can only keep him from doing CAD work for one of their direct competitors, and generally (not always) the non-compete also specifies "in the area they worked in for [insert the company name here]". I had to sign one for my current job, and I read it *very* carefully before putting my pen to paper. If you aren't willing to work for a company that requires one, then find a different job.

          • Re:Strange... (Score:5, Informative)

            by Aneurysm9 ( 723000 ) on Monday August 09, 2004 @04:41PM (#9924211)
            That's exactly what I'm saying. If the engineer either was stupid enough to agree with the clause or thought it was a good bargain, he agreed to not work in the proscribed areas and that agreement should be enforceable. As for caselaw info, here's a quote from a 2002 unpublished Minnesota (the state where Seagate has brought suit, so this is a statement of the controlling law) decision with cites to the cases controlling the issues:

            The bar is high for enforcement of noncompete agreements. Such agreements partially restrain trade by limiting the right of a party to work and earn a livelihood. Bennett v. Storz Broad. Co., 270 Minn. 525, 533, 134 N.W.2d 892, 898 (1965). Noncompete agreements are enforced only to the extent reasonably necessary to protect a legitimate business interest. Id. at 534, 134 N.W.2d at 899. Courts look upon such contracts with disfavor and scrutinize them with care. Freeman v. Duluth Clinic, Ltd., 334 N.W.2d 626, 630 (Minn.1983); Nat'l Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740 (Minn.1982); Bennett, 270 Minn. at 533, 134 N.W.2d at 898. Noncompete agreements are invalid unless bargained for and supported by adequate consideration. Nat'l Recruiters, 323 N.W.2d at 740. A noncompete agreement signed after employment commences is presumed unenforceable unless clearly ancillary to the employment agreement or supported by adequate additional consideration. Sanborn Mfg. Co. v. Currie, 500 N.W.2d 161, 164 (Minn.App.1993) (citing Nat'l Recruiters, 323 N.W.2d at 740). This requirement reflects the fact "that employers and employees have unequal bargaining power," especially after employment has commenced. Sanborn Mfg. Co., 500 N.W.2d at 164. When the employer fails to inform prospective employees of noncompetition agreements until after they have accepted jobs, the employer "takes undue advantage of the inequality between the parties." Nat'l Recruiters, 323 N.W.2d at 741. Continued employment is not sufficient consideration for a noncompetition agreement. Id. at 740.

        • Contrast w/ MSFT/Borland (Score:5, Informative)

          by ron_ivi ( 607351 ) <sdotno@NOSpAM.cheapcomplexdevices.com> on Monday August 09, 2004 @04:33PM (#9924124)
          Back when Microsoft and Borland [com.com] where having their little debate
          Borland claims that in the past 30 months, Microsoft has hired 34 of the ailing software developer's key employees by offering "large signing bonuses of several millions of dollars and other incentives," according to the suit.
          This included Borland's VP of R&D Paul Gross, and Anders Hejlsberg [about.com] (chief architect of Delphi).

          Back in those days, Borland went after Microsoft, not the little guy.

          Is this a differce in the times, or are the specifics of the situations different?

        • Re:Non-Competes.... (Score:5, Interesting)

          by WCMI92 ( 592436 ) on Monday August 09, 2004 @05:38PM (#9924684) Homepage
          "As for such clauses being UnAmerican, nothing could be further from the truth. It's a classic example of American thinking, use your power to prevent the competition from horning in on your resources, human or natural."

          Such clauses are VERY Anti-American. They give the employer TOTAL power over the employee and violate the spirit of capitalism. Indeed, noncompetes are in many ways a SOCIALIST idea...

          With a noncompete, an employee has no guarantee of employment at that company, yet, has his ability to find other work limited.

          It's a classic case of the corporation wanting to have it both ways... The same capitalist corporation that will, without any qualms, outsorce to India, lay off 5,000 workers, etc to increase their profits suddenly becomes DEVOUT MARXISTS when the EMPLOYEE wants to "fire the company" to do much the same...

          This is one reason why we in IT need to organize.

          Not to form a union, but perhaps an association that we can use to lobby Congress as a large group with some clout to get such things as noncompetes made illegal.

          The last time I was asked to sign a noncompete, I asked how much they were going to pay me to not work... That ended the issue.

          Noncompetes are also on shaky ground legally, despite what you said. Most have language in them that is clearly illegal.

          Not only do most noncompetes violate the law, they are most often imposed on the employee as a condition of employment, AFTER becoming an employee. You never get to see it until after accepting the job, quitting your old one, and being more or less forced to sign.

          Also, under contract law something of value must be granted to both parties to be legal. "Sign this or you lose your job" has been found most of the time to be ILLEGAL, as a contract signed under duress is not consensual.

          Here are legal reforms needed to regulate noncompetes:

          1. Noncompetes must be disclosed to prospective employees during the INTERVIEW process, and furnished in hard copy so that the interviewee can review it with an attorney off site.

          2. Noncompetes become null and void if the employee is fired or laid off.

          3. Noncompetes cannot be used to prevent the employee from working in their field.

          4. The noncompete, if invoked, requires the employer to pay the former employee their previous salary during the time in which they cannot get work. This is in the State's best interest, as otherwise the employee would be drawing unemployment, a burden being unfairly shifted from corporation to taxpayer...

          5. No noncompete can have more than a 6 month duration.

          6. The employer is liable for all legal expenses related to litigating a noncompete, including paying the employee's expenses should they prevail. They should also have to post bond as guarantee of this payment PRIOR to the court accepting any complaint from an employeer with regard to an employee.

          7. Noncompetes that have ANY language in them that would be found in violation of the law would become null and void in their entirety.

      • Re:Non-Competes.... (Score:5, Informative)

        by dcgaber ( 473400 ) on Monday August 09, 2004 @04:21PM (#9923992)
        I know in California, except for very limited circrumstances, these contracts are indeed unenforceable. Specifically, I refer to:
        CAL. BUS. & PROF. 16600 "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."
      • Can a legal agreement which prevents a worker from working to feed his family be legal?

        The don't prevent a worker from working in general. The worker is free to take a job that doesn't compete with the original.

      • Re:Non-Competes.... (Score:5, Informative)

        by bjschrock ( 557973 ) <bschrock@@@gmail...com> on Monday August 09, 2004 @04:26PM (#9924047)
        From what I read from the article and from what I remember about signing my previous non-compete agreeement with Seagate (if his was worded the same way), they aren't trying to prevent him from working at Western Digital, just the read/write head division of WD. The way I understood the clause and had it explained to me was that you can't go to work for a competitor and work on the same exact thing you were working on at Seagate. So I don't think they would have a problem with it if he went and worked for WD in some other division, say firmware development or testing.

        I think WD should hire him and put him somewhere else for the two years, then move him over to read/write if they want. I think it's fairly reasonable that Seagate wouldn't want him working on the same stuff he was doing for them just a few weeks ago. It's almost impossible to expect that at least some confidential information won't be disclosed.

      • Re:Non-Competes.... (Score:3, Interesting)

        by DeepHurtn! ( 773713 )
        Over the last year or so there was a case in Quebec -- EA tried to pilfer some of UbiSoft's top guys, who had a non-compete clause in their contract. Lawsuit(s) ensued and the non-compete clause was found to be valid.

      • Re:Non-Competes.... (Score:5, Interesting)

        by hendrik42 ( 593357 ) on Monday August 09, 2004 @04:32PM (#9924121)
        In Germany, this kind of contract is valid but your former employer has to pay the difference between the salary in your old job and the one in your new job for the 2 years. So, if you have a contract like that - be happy, quit your job and go back to school :-) If the contract does not contain a salary-difference clause like that, you can either sue the company into paying it anyway or you can just ignore the whole thing and work for anyone.

      • Re:Non-Competes.... (Score:3, Informative)

        by queequeg1 ( 180099 )
        In the US, non-competes are enforceable in almost every jurisdiction exception California. However, there are generally substantial qualifications, the most significant of which is that the agreement cannot prevent competition solely for the purpose of placing restrictions on the marketplace. Instead, employers who use non-competes must generally demonstrate that they have a legitimate protectable interest that is promoted by the non-compete (mere restraint of trade is generally not legitimate). Examples

      • Re:Non-Competes.... (Score:5, Interesting)

        by abb3w ( 696381 ) on Monday August 09, 2004 @04:53PM (#9924331) Journal
        Non-competes are valid even if you are fired, meaning they can fire you and prevent you from working for a competitor, which is basically contractually enforced unemployment.

        I crashed a college engineering class where a contract lawyer was giving a guest lecture on the subject of NDAs and non-competes. He presented a compromise that several of his clients have used to modify the non-compete agreement to be more equitable to both sides. (I've got the boilerplate handout somewhere in my papers.)

        In the event an employee leaves his job, voluntarily or involuntarily, the non-compete kicks in. But the company must continue to pay his full salary so long as he submits to the company each month:

        1) Proof that the ex-employee is actively seeking employment in their chosen profession.

        2) Evidence (EG, a job offer from a competitor) that the non-compete agreement is the only thing keeping the employee from current employment.
        Each month you're looking for work and the non-compete keeps you from taking it, the company must send you your a check. If they decide they're sick of paying you, they may opt to include with the check a letter releasing you from your non-compete. You spend the month surfing in Australia instead of looking, you don't get paid for that month, but the checks resume afterwards.

        If what you and what you know are worth squat, your salary is worth the slight expense to keep you and your knowledge out of the hands (or brains) of the competition. If the company is worth squat, they'll be willing to pay this as reasonable compensation.

        Not all will--refusals generally come from the same ones whose HR trolls make you sign over every idea you've ever had or will have on anything relevant or irrelevant. Ethical companies will accept, or make a reasonable counter-offer-- so avoid the slimeballs, stick with the ethical companies.

    • Re:Non-Compete Agreement (Score:5, Interesting)

      by OrangeTide ( 124937 ) on Monday August 09, 2004 @04:20PM (#9923978) Homepage Journal
      Some states do not allow non-compete agreements, usually if the state has some sort of Right-to-Work legislation. I believe California is a right to work state, at least it has other properties of RtW, like not requiring advanced notice that of termination or resignation. I was not able to figure out from the article alone what state this is taking place in. Although since Seagate is mostly located in California, it has to be california. Maybe someone more familiar with CA RtW laws could enlighten us?

      In any case, non-compete clauses should be illegal (but NDAs are okay) because where else is a hard drive expect going to work other than another hard drive company? In a fair market employees should have a right to seek better pay, better location or better management. If you are locked into a non-compete agreement then you have to break into some other industry for your next job.

      A company should be forced to continually improve it's technology to maintain a competitive advantage. I think we can assume that seagate has had suffiecent time to develop and produce whatever secret technology Mr. Goglia has worked on and Seagate should have a pretty significant headstart on their competitors.

  • Do they have a no-compete (Score:4, Informative)

    by kalidasa ( 577403 ) * on Monday August 09, 2004 @04:08PM (#9923803) Journal
    Do they have a no-compete clause in his contract? If not, they're going to lose, as that's standard practice in cases like this.
    • This absolutely is a standard practice in the industry. Often however, this is overlooked unless the employee who has been poached by a competitor is particularly valuable or had access to sensitive data such as strategy. I have certainly had employees sign non-compete agreements (for a couple of companies not necessarily in the technology industry).

      • Re:Do they have a no-compete (Score:5, Insightful)

        by superpulpsicle ( 533373 ) on Monday August 09, 2004 @04:53PM (#9924329)
        In today's economy, I don't see how noncompetes would hold up in court. They were probably useful in 1998-2000 dot-com boom times.

        Seriously people have to make a living. The judge can't tell you to not use your skills to feed your damn family. The case would have to be super convincing like copying codes line by line. Even that isn't easy for ex-companies to come after you. Look at SCO.

    • Re:Do they have a no-compete (Score:5, Informative)

      by gwernol ( 167574 ) on Monday August 09, 2004 @04:16PM (#9923929)
      Do they have a no-compete clause in his contract? If not, they're going to lose, as that's standard practice in cases like this.

      And even if they do, its not clear what the legal standing of non-compete clauses is. It is state law that regulates the legality of non-compete clauses. For example here's [employlaw.com] a good page discussing the confusing situation in California.

  • Did he sign an NDA or not? (Score:4, Interesting)

    by garcia ( 6573 ) * on Monday August 09, 2004 @04:08PM (#9923805)
    When I read about this story when it broke on Friday I found nothing that mentioned that Goglia had signed an NDA *but* he had been working there for seventeen years and was the executive director of the Recording Head Division.

    Now, if Seagate hadn't had the man sign some sort of NDA that specifically stated he wouldn't work for a competitor for two years then I really don't think that they have too much to stand on until WD comes out with a strikingly similar product (which inevitably they will).

  • No Fair! (Score:3, Insightful)

    by agent dero ( 680753 ) on Monday August 09, 2004 @04:10PM (#9923826) Homepage
    Unless they can provide him with a job, or some other way for him to make a living. I don't see it right if they prevent him from finding another job.

    However if he does know 'top-secret' stuff, and spills the beans to Western, Seagate will have a case against him, and Western Digital

  • Trying to enforce a non-compete is difficult (Score:3, Insightful)

    by PerlMonkey ( 323967 ) on Monday August 09, 2004 @04:10PM (#9923833)
    Especially one for 2 years? Seagate is probably just trying to stall it out, because they really don't have a chance in hell of making it stick.

  • Right To Work (Score:4, Informative)

    by Defiler ( 1693 ) * on Monday August 09, 2004 @04:12PM (#9923859)
    Minnesota is not a Right To Work state. I'm not a lawyer, but they might actually have a case.
    Residents of states without a Right To Work law are not protected from this kind of non-compete suit in the same way as RTW residents are.

    • Re:Right To Work (Score:4, Insightful)

      by jhunsake ( 81920 ) on Monday August 09, 2004 @04:16PM (#9923927) Journal
      So what if he goes to another state to work for WD? What is a Minnesota court going to do about it then?

  • In a related story... (Score:3, Interesting)

    by raehl ( 609729 ) * <raehl311.yahoo@com> on Monday August 09, 2004 @04:12PM (#9923870) Homepage
    CIA tells ex-employee that he can't go work for the KGB.

    I don't see what the big deal is - if you want to work developing ultra-bleeding-edge technology, it seems reasonable that the entity funding that research restrict what you're allowed to do after the fact.

    Just make sure you're appropriately compensated for not being able to work in the same industry for two years, and if not, take a different job.

    And no, I don't want to hear the 'But another job may not be an option!' response either - if you're "good" enough to work on such a project to begin with, you're good enough to get a different job.

    And if you're not good enough to get another job unless you just worked in the ultra-bleeding-edge research department of your potential new employer's competitor, that's an even MORE convincing reason that it's quite reasonable to restrict your future employment.

    • Re:In a related story... (Score:5, Interesting)

      by lspd ( 566786 ) on Monday August 09, 2004 @04:37PM (#9924161) Journal
      I don't see what the big deal is - if you want to work developing ultra-bleeding-edge technology, it seems reasonable that the entity funding that research restrict what you're allowed to do after the fact.

      No, they have the right to restrict the ex-employee from disclosing trade secrets. Sure, in the company's view the best way to keep him from disclosing company trade secrets is to require that he commit suicide when fired...I mean stop working when fired.

      Isn't this the same sort of nonsense that SCO has been bitching about? It's right in the contract. If you ever had access to AT&T source code you must die when you lose access to that source code. It's the only way to be sure that a secret stays a secret.

  • Pete signed a confidentiality agreements (Score:5, Informative)

    by usefool ( 798755 ) on Monday August 09, 2004 @04:13PM (#9923881) Homepage
    According to this article [d-silence.com], he did sign something.

    • Parent article better than original (Score:5, Informative)

      by bjschrock ( 557973 ) <bschrock@@@gmail...com> on Monday August 09, 2004 @04:36PM (#9924152)
      The parent's article points out two facts glazed over in the original one: 1) He did sign an NDA and 2) Seagate isn't try to keep him from working at WD altogether, just certain divisions.

      I think it's fairly reasonable for Seagate to ask that he not work in the same division at another company that he just left at Seagate. I still can't tell from the article if he signed a non-compete clause. Also, when I signed my non-compete with Seagate, the term on it was 1 yr. (of course, I was just a lowly intern, so I don't think they would have cared one way or another)
    • According to this article, he did sign something.

      Well, I recall once being terminated for breach of some sort of contract I allegedly signed. I did not, however, sign any such agreement and they were unable to produce evidence to support their claims.

      In short, just because they said it doesn't make it any more true than any of SCO's claims.

      Considering the duration of his employment, I would be only a little bit surprised if he had signed anything like that. Seems like it has been only within the past

    • Re:Pete signed a confidentiality agreements (Score:5, Insightful)

      by Todd Knarr ( 15451 ) on Monday August 09, 2004 @04:50PM (#9924295) Homepage

      He signed a non-disclosure agreement, not a non-compete agreement. If he'd signed a non-compete, Seagate is entirely in the right here. With just an NDA, though, the burden's on Seagate. Without a non-compete, they can't prohibit him from working for WD period. All they can do (and it sounds like what they are doing) is claiming that if he works for WD then violation of the NDA is inevitable. The burden's on them to demonstrate that, but that may not help him.

  • One Solution (Score:3, Interesting)

    by Detritus ( 11846 ) on Monday August 09, 2004 @04:15PM (#9923908) Homepage
    I would like to see the law changed so that the company is forced to pay the ex-employee full wages and benefits for the length of the non-compete period. If the information is really that valuable, it would be a small price to pay. Otherwise, employees are put into a position where they can't work in their field of expertise, often with little or no compensation.
    • > Can't work in their field of expertise

      But, as this guy has 17 with Seagate under his belt, it could be argued that Seagate gave him his field of expertise, and if he hadn't been working there, it would be extremely unlikely that WD would want him.

      Take this as a warning to all: Don't become too good at thing unless you plan to spend your life with one company. "Transferable skills" may not pay as much as a guru, but given that the number of gurus is pretty limited (think of diffy), its probably a bett

  • What's their problem with this? (Score:5, Insightful)

    by AntiOrganic ( 650691 ) on Monday August 09, 2004 @04:15PM (#9923909) Homepage
    If all of Seagate's technology is protected by patents anyway, where's the problem? If he uses any of their super-secret hard drive technology, they can file patent infringement suits. That's what the patent system is for.
    • The problem is trade secret is different from patent. In many industries, there are special skills or designs that had better be left as trade secret. The formula of Coke Cola is one. Trade secret is not like patent: you cannot disclose that to the public at all. Or else, you will lose it... In some other cases, these are simply design issues that you want to avoid your competitor from copying. For example, if you are going to make a budget CPU, you may want to create an impression to your competito

  • Not as standard as you think. (Score:3, Interesting)

    by CrypticSpawn ( 719164 ) on Monday August 09, 2004 @04:16PM (#9923935)
    I worked for a company for a while without one. Soon I was working on projects which were bringing in millions a month, then they wanted me to sign one. I told them I would let my lawyer look it over, I ended up leaving the company before I had to sign, went ot a competitor ;).

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Monday August 09, 2004 @04:16PM (#9923937)
    Comment removed based on user account deletion

    • Re:Why only in IT? (Score:5, Informative)

      by MmmDee ( 800731 ) on Monday August 09, 2004 @04:30PM (#9924093)
      I belive a non-compete clause, such as ones alluded to here, exist in a number of industries. Speaking as a physician and member of the medical community, most of our contracts have non-compete clauses that state, in effect, "Upon leaving The Practice, you will not practice within your specialty in a similar hospital/clinic located within 5 miles of any of The Practice's locations". Of course, in this field it's so as not to "steal" patients (and therefor business) rather than technology.

  • Not without a non-compete agreement (Score:3, Informative)

    by malat ( 696707 ) on Monday August 09, 2004 @04:17PM (#9923951)
    As a law clerk who has researched this specific topic extensively over the passed few weeks, I can say that 1) even with a non-compete agreement, the enforceability of such a clause is not a foregone conclusion (it is subject to reasonability tests e.g. duration and geographic limitation in most states); and 2) without a non-compete agreement, there is almost no legal precedent for Seagate to enjoin someone from practicing in their chosen profession/field of expertise. Should be an interesting outcome should there be no agreement in place.

  • Not allowed in California at least (Score:3, Informative)

    by ebrandsberg ( 75344 ) on Monday August 09, 2004 @04:20PM (#9923976)
    http://www.akingump.com/docs/publication/412.pdf

    Only in very particular situations are non-compete clauses applicable in CA, and given that the employee worked for Seagate for 17 years, he may not have even signed one when he joined the company.

  • this is a matter of state law.... (Score:5, Informative)

    by Malor ( 3658 ) * on Monday August 09, 2004 @04:20PM (#9923980) Journal
    Probably, unless he signed a non-compete, about all Seagate can do is is cost him a bundle in legal fees. (Hopefully WD will cover those fees.)

    However, that could depend on the state laws. I was surprised by how different things were between California, my home state, and Georgia, where I am now. Interestingly, both states call themselves "Right To Work" states. In California, that means that an employer can't prevent you from working for another employer later; non-competes in that state are not binding. In California, you do indeed have the right to work, and no prior employer can restrict that right.

    In Georgia, on the other hand, things are quite different. Here, from what I learned through the grapevine, the employer seems to hold most of the cards, and has most of the rights. You can be terminated at any time for any reason, or for no reason at all, and you have no recourse. Even so, you can still be held to a noncompete. This, apparently, is supposed to encourage employment, and thus they call this the "Right to Work". I think that's an AMAZING display of spin. In English, this Southern euphemism translates to "Right to Bend Over".

    Moral: if you don't want to be held to a noncompete, make sure to sign it in California and make sure that your next job is also in California. Unless something has changed in the last two or three years, all they can do to you there is rattle their sabers a bit.

  • How can there be informed discussion of this? (Score:3, Insightful)

    by raytracer ( 51035 ) on Monday August 09, 2004 @04:21PM (#9923990)
    There simply isn't enough information presented in the story as to whether the parties on either side have broken any laws or behaved unethically. It is possible that legally you may be prevented from taking a job with a competitor. Whether that is the case depends in no small part upon what the laws are in your state and what contract you signed when you began employment. It's entirely possible that legally and ethically he cannot take a job with his competitor (at least for a limited time). It is also entirely possible that he can and should be allowed to. Given the scanty information provided, it's simply not possible to decide.

  • I'm bad (Score:5, Funny)

    by vurg ( 639307 ) on Monday August 09, 2004 @04:27PM (#9924061)
    I was such a bad employee that my ex-employer forced me to work for their competitor.

  • Fine. (Score:3, Insightful)

    by Progman3K ( 515744 ) on Monday August 09, 2004 @04:27PM (#9924065)
    Seagate only needs to pay him up front the two years salary Western digital was promising him and he can then stay at home and do nothing.
    Otherwise, he should go work for the competitor, anything else bars him from earning a living in his field of expertise for two years, and it CANNOT be legal to make someone either starve or work in a field they don't want to work in. No contract can be made that damages an individual right like that, it's unconstituional.
    Simple, really.

  • Ouch (Score:3, Funny)

    by dcw3 ( 649211 ) on Monday August 09, 2004 @04:33PM (#9924127) Journal
    How can he get ahead if they don't let him seek a new position in this sector? If not, I hope he's able to stay on track and spin up at the new job.

    Sorry

  • Right to Work States (Score:4, Informative)

    by KrisJon ( 6582 ) * <mcbain7700 AT yahoo DOT com> on Monday August 09, 2004 @04:33PM (#9924129)
    A quick googling produces this link [nrtw.org]. Good site to check before moving.

  • Obligatory Dilbert (Score:3, Funny)

    by UnknowingFool ( 672806 ) on Monday August 09, 2004 @04:43PM (#9924234)
    PHB:[Hands paper to Wally] Here sign this.
    Wally: What's this?
    PHB: It's a non-compete agreement. By signing, you agree not to do any work for a competitor for 5 years if you leave the company.
    Wally: No problem.
    [PHB leaves]
    Wally: [Thinking] I haven't done any work here in the last five years.

  • NOT a non-compete (Score:3, Interesting)

    by ca1v1n ( 135902 ) <snook@noSPam.guanotronic.com> on Monday August 09, 2004 @04:43PM (#9924240)
    He's been there for 17 years. Non-competes weren't trendy back then, and if he was under one, it would have been mentioned. It also wouldn't be newsworthy. He is, however, under NDA. The argument that Seagate is trying to make is that it is impossible for him to honor the NDA if he takes the job. Now that we actually do have companies requiring employees to sign non-competes, the stark comparison is going to make Seagate look really weak here. In order to be valid, a contract must represent a "meeting of the minds". This means that both sides have to understand what they're getting into, or if they don't, it's because someone screwed up in the reading of it, rather than someone deliberately writing a confusing contract. It's pretty easy to argue that Pete Goglia could not reasonably have been expected to understand that the NDA was implicitly a non-compete. The bigger danger is really on Western Digital's end, as this opens them up to potential litigation for misappropriation of trade secrets for anything they come out with in the near future, regardless of whether or not any trade secrets were in fact misappropriated.

    I don't know what was like for him there, but I'm going to take a stab in the dark and guess that all of this probably could have been avoided if Seagate had given him a raise, better benefits, and perhaps more respect around the office. Courts have a tendency of drawing the same conclusion, and don't really like attempts like this to keep employees from taking jobs with competitors. They'll uphold an explicit and unambiguous non-compete, but I'd be absolutely astonished if they go for this legal theory.

  • Ironic For Seagate (Score:4, Informative)

    by Kagato ( 116051 ) on Monday August 09, 2004 @04:51PM (#9924311)
    What's ironic is Seagate is crying foul about this when they have been on the other side of court for this issue. Back in the 90's I was told a story from a seagate employee who had been present for one of the famious Alan Shugart (then CEO) lunch room chats. Alan liked talking to the rank and file casually.

    Apparently back in the mid-late 90's seagate was getting their butts kicks in price because of IP. They were paying companies like Hutchingson Technologies to make parts because they lacked the internal IP and expertise. This outsourcing was costing them money. So they hired engineers from a competing company, IBM. This gave seagate a nice edge... until IBM sued. That basically created another drain on the company that negated any cost savings they had found.

    After that I'm told Alan Shugart said "this time around we hired the right engineers." I would assume they covered their bases by hiring a broad range of engineers, or going overseas where it's much harder to sue a US company.

    At any rate the defendant would do well to look up Seagates own cases. I'm guessing he can defend himself with their own words.

  • Right To Work. (Score:3, Insightful)

    by ninejaguar ( 517729 ) on Monday August 09, 2004 @05:16PM (#9924540)
    This wouldn't even reach trial if it were brought to California. California is a right to work state. What's in your head belongs to you. Your experience is inseparably a part of you, and presumably was crucial in your original hire. If the company that hired you fails to retain you, they cannot stop you from working. The next company that hires you will benefit from your experience, just as the prior one did.

    If the next company that hires you is foolish enough to fabricate a product that too closely resembles patented, copyrighted, or trademarked items from your prior company, they will simply have to resolve it through various legal means. Those companies that rely of "trade secret" rules fear this sort of thing as they have little protection against the migration of knowledge from one company to another.

    Everyone has the right to work, and it is not likely that any jury would see stopping a citizen from working as a viable solution. And, if they did, the Supreme Court sure wouldn't as it clearly wouldn't stand a test against the Constitution.

    = 9J =

  • Total Disclosure... (Score:3, Interesting)

    by MrIcee ( 550834 ) on Monday August 09, 2004 @05:25PM (#9924596) Homepage
    We have the opposite policy to a NDA at one of my companies... we have a Total Disclosure Agreement which means that anything anyone knows about ANYTHING WHATSOEVER they must disclose to everyone else. It works out fairly well, and is fairly humorous to everyone - people go out of their way to make sure they disclose everything they can.

    Conversations generally go like this "well, this is under NDA but since I have to conform to our TDA, here's the info..."

    We did this because of all the utterly stupid NDA's we've had to sign over the years.

  • Non-competes don't hold up! (Score:5, Insightful)

    by micron ( 164661 ) on Monday August 09, 2004 @06:01PM (#9924901)
    IANAL, but I thought that the ruling is California was that unless Company A (Seagate in this case) fairly compensates you for not practicing your trade for the duration of the non compete, then the non compete won't hold up in court preventing you from going to company B.

    Simpler, Seagate has to have him under contract, and has to be compensating him for the duration of that contract as specified in the non compete. Otherwise, they can't stop him from practicing his trade unless they can PROVE that he is using Seagates IP at his new position.

  • restraint of trade (Score:3, Interesting)

    by Doc Ruby ( 173196 ) on Monday August 09, 2004 @06:55PM (#9925256) Homepage Journal
    In Canada, "you'll never work in this town again" is a threat like assault. Just making it in the midst of any labor negotiation can demonstrate "bad faith" by the threatener in the negotiation, and default judgement by a court in favor of the threatened. At least in Ontario, where people work :).

  • Pete Goglia... (Score:3, Funny)

    by callipygian-showsyst ( 631222 ) on Monday August 09, 2004 @07:07PM (#9925325) Homepage
    Pete Goglia should get a job at Google! He could even change his name to Pete Googlia to make it more of a better fit.

    Seriously, why was this story reported on a Mac web site? If Mr. Goglia is a Mac programmer, perhaps the real reason he can't get a job is that he only knows a proprietary niche programming language (Objective-C) and a proprietary niche API (Cocoa/Carbon, etc.)

  • $0.02 (Score:3, Insightful)

    by D.A. Zollinger ( 549301 ) on Monday August 09, 2004 @07:23PM (#9925405) Homepage Journal
    Unfortunately, the article doesn't go into too much depth about the situation. Whether he was fired, laid off, or left on his own for greener pastures. But here are my thoughts on it all:

    Non-compete clauses are standard in the broadcast world, and a local radio station made a big stink about it on the air because a popular couple had been fired from their morning show, and the radio station that picked them up couldn't let them on the air for 6 months or face a lawsuit from the station that fired them in the first place! However, there are hundreds of markets in the US, and stations that are always looking for better talent, so there wasn't much threat of them going hungry - they could just move 50 miles to the next radio market and get a job if they were hard up for cash.

    On the other hand, if what you do is highly specialized work, such as working on the read/write heads of hard drives, there aren't that many job opportunities available to you. So if there are only 3 companies that do what you specialize in, and you leave one to work at another, you are going to be in trouble if you are forced to take a 2 year hiatus. However, I wouldn't have a problem staying out of the field for 2 years if my first company compensated me for staying out of my chosen profession for the duration of time.

  • Non-competes after hiring (Score:3, Interesting)

    by westendgirl ( 680185 ) on Monday August 09, 2004 @08:42PM (#9925826) Homepage
    I worked for a small biomedical engineering firm for a couple of months. (The company was full of illegal/borderline practices and made medical products, so I felt I could not stay.) After I quit, the president asked me to sign an NDA and non-compete. I told him to include it when he couriered my last cheque. When the cheque arrived, I told the courier to go, even though he insisted he was supposed to wait. I never sign anything without due diligence. I then ran to the bank and cashed the cheque. When the president and his assistant started calling/emailing, I said I was reviewing the contract. This bought me enough time for the cheque to clear. I had no incentive to sign the NDA/non-compete and the contracts were *backward looking*. How was I to know if I'd already violated a contract that did not previously exist?

    I never signed the contracts. The president flipped. He threatened to contact the university where I was finishing my Executive MBA and have me expelled.

    After I quit, a young engineer also quit and he pulled the same stunt with her. In her case, he threatened to have her blocked from ever doing a masters, since he "knew people" at the local universities. I told her he was full of hot air and that he could not force her to sign backward- (or forward-!) looking contracts. She stuck to her guns, although it took over a month for her to get her last paycheque.

    The funny thing was that non-competes are rarely enforceable in Canada and the guy had no competitors in Canada. It's extremely unlikely that the engineer or I would ever work for one of his competitors, anyway!

  • Too Bad For Seagate (Score:3, Insightful)

    by rspress ( 623984 ) on Monday August 09, 2004 @09:29PM (#9926053) Homepage
    If they guy has been with them for 17 years then seagate must have not paid this guy enough for him to stick around. If this guy has been around this long and has all these trade secrets then it is some ones job at Seagate to keep this person fat, dumb and happy with his job. Since most jobs now are no like they were decades ago were a company would take care of its employees than these companies should expect the shoe fits on the other foot just as well.

    I hope Pete gets to work at Western Digital very soon. I think Western Digital is one of the best companies out there as far as customer support is concerned. I had a bad 100gig drive that was about 6 month old and they replaced it with a 120gig drive. Not only that when I had further problem they shipped a second 120gig drive and told me to check them both out and return the extra 120gig drive in a couple of weeks when I was sure which one I would like to keep....all without a dime out of my pocket.

    They have my business for life now.

  • What's the point of patents and copyrights? (Score:3, Insightful)

    by Proudrooster ( 580120 ) on Monday August 09, 2004 @09:41PM (#9926106) Homepage
    Assuming Seagate has proprietary code or apparatus in it's harddrive, shouldn't Seagate have patents and copyrights that cover these inventions? If an ex-employee were to infringe on these patents and copyrights then Seagate could claim and injury and sue?

    How much protection do large monolithic companies need? Usually corporations treat workers as-if they are insignificant, until they decide to leave. Not only do they want to own the thoughts of the employee, but also control where the employee works next. Somebody save us before we have to change our lastname to that of our employer as a condition of employment. Geeez.

  • not about non-competes (Score:4, Informative)

    by odin53 ( 207172 ) on Monday August 09, 2004 @10:40PM (#9926400)
    This doesn't sound like it's about non-compete clauses or contracts. (Admittedly, I've only read the linked-to MacCentral article and haven't done any other digging for details, so it very well could be.) I would guess Seagate is trying to protect its trade secrets wrt read/write technology related to their Recording Head Operation.

    The Seagate spokesperson used the magic words "inevitably disclose", which probably refers to "inevitable disclosure" doctrine in trade secret law. This is a very fact-based doctrine, but it comes up when the employee has deep knowledge of the business/technology of the old employer, and the nature of the new job would lead "inevitably" to disclosure (verbal or otherwise) of that knowledge. Many states follow this doctrine (though I don't know if Minnesota does), and most of these would allow suing for injunctions to prevent "inevitable disclosure" of their trade secrets, which is what Seagate is probably doing. This is why it doesn't really matter if there was a non-compete or not.

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