Archive for Non-Compete Agreements
TechCrunch has a post up entitled “Ex-Employee Sues Zynga For Discrimination, Wrongful Termination.” Apparently a former employee of the web site Zynga is suing for wrongful termination, alleging that he was fired after letting Zynga know that he was suffering from health problems and would have to work part time from home for awhile.
Other than using good management techniques and properly consulting with an employment law expert before firing someone, there’s not much a company can do on the contracting front to foster a good defense to this kind of lawsuit. That said, it does remind me of the many areas where a company can protect itself, particularly having every employee sign a Confidentiality, Non-Compete, Non-Solicitation and Assignment of Rights Agreement. For a comprehensive understanding of the issues and language for this contract, including our easy to use question and answer wizard plus clear legal explanations, click here.
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New MySpace CEO Hiring Raises the Employment Contract Specter
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According to VentureBeat and TechCrunch, MySpace recently replaced Chris Wolfe with its new CEO, Owen Van Natta (see here). TechCrunch’s Michael Arrington adroitly points out that Van Natta, who used to be Chief Revenue Officer at Facebook before briefly running Project Playlist:
“Van Natta owns a significant percentage of Facebook stock and is of course intimately knowledgeable about their business. At the very least it’s bad form for him to join Facebook’s primary competitor. At worst there may be legal issues since it will be extremely difficult for him to continue to protect confidential Facebook information in his new job.”
We’ve discussed these exact kinds of legal issues before in our post on non-compete agreements here. We’ve also extensively reviewed employment contracts when it comes to non-compete, confidentiality and intellectual property issues, and offer you (at no charge) our sophisticated Confidentiality, Non-Compete, Non-Solicitation, and Assignment of Rights Agreement here. Also, check out our other confidentiality agreements here.
You can be almost positive that Van Natta has signed a similar agreement with Facebook. Now, California law greatly limits the enforceability of non-compete restrictions, believing that people should be free to pursue the job of their choice, so it’s unlikely that Facebook can use an old non-compete contract to stop Van Natta from taking the helm at MySpace. But California doesn’t also throw out intellectual property restrictions, so you have to wonder how Van Natta will continue to protect Facebook confidential information and trade secrets that remain in his memory, especially since MySpace will need to build out new and exciting tools to bring more users to their site because Facebook is growing much faster.
From Facebook’s perspective, this risk is greatly heightened by Van Natta’s jump to MySpace. It’s one thing when he left to take over Project Playlist, a music web site, but quite another with his move to MySpace, Facebook’s top competitor in the social networking space. The in-house legal department at Facebook is probably scrutinizing Van Natta’s old Facebook contract as we speak because of this very concern. It will be very interesting to see how this nascent dispute will play out.
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