According to a Valleywag report, Google asked employees of its recent acquisition DoubleClick to sign a new employment agreement. The employment agreement contained a non-competition clause and a non-solicitation clause. A week later, the lay-offs began.
Question: Will Google be able to prevent the laid-off DoubleClickers from going into competition? The comments to the Valleywag piece add up to a great general overview of some key legal issues, such as:
- in California, non-competition clauses for employees as such are pretty much unenforceable per se (but many of the DoubleClick employees were based in New York);
- in some states (such as Texas), non-compete clauses require separate consideration;
- even if a non-competition clause turns out to be unenforceable, a non-solicitation clause, prohibiting the former employee from trying to hire people away from the former employer, might be another story.
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Signing a business contract:
While I don’t mind if an owner of a company selling out has to sign a non-competition clause, I can’t stand it when a company makes lower-level employees do so. I understand the logic behind it, but those employees had no say whatsoever in the actual sale of the company, and it’s pretty terrible to force them into a corner where the either have to quit their jobs or sign away their careers.