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Silicon Valley Innovation is Built Around Employee Mobility

In my last blog, I wrote about HP’s disturbing pattern of suing non-California employees under ‘non compete’ clauses, often imposed  years after employment began.  Apparently it’s relatively recently that HP decided to abandon its Silicon Valley roots and tie up its  non-California employees in legal knots.  HP is in fact the only large Silicon Valley-based company to have two classes of employees and try to impose mobility restrictions on those who live outside California.  HP’s efforts have gone so far as to sue an employee who took a buyout after having his salary cut, and one who didn’t even work in an area related to HP’s products that compete with Cisco’s.

Two recent actions since that blog posting are stunning.   First, HP renewed legal action in Texas, where one of the employees used to live, trying to get a judge there to schedule a court date on a day’s notice and to apply Texas law even though the California judge in the case is going to hold a hearing, as is certainly appropriate, to verify that the employee has in fact moved to California. (Yes, he came to work for Cisco after he arrived in California, rented an apartment, got a drivers license, etc.) Once again the Texas court refused to intervene, and in fact effectively “stayed” HP’s legal actions indefinitely. HP also tried in Texas to raise another bar to employee freedom, claiming that the employee would ‘inevitably’ use HP’s trade secrets to do his job at Cisco, and therefore should be barred from continuing his new job. Just as California law bars enforcement of non-compete clauses, California courts won’t recognize this doctrine either, seeing it for what it is — an effort to impose de facto non competition clauses.

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HP Sues Employees for Leaving – We Challenge HP to Support Employee Freedom

For the third time in two years, HP has filed a lawsuit to stop a former employee from going to work with Cisco – in one case, almost half a year after the employee had left HP in a voluntary reduction-in-force.  As headhunters and other companies are flooded with resumes from HP employees seeking safe ground amidst the chaos of executive turnover, we can probably expect to see more desperate moves to lock up human capital. In an unhappy work environment, it’s a strange decision to try to achieve employee retention by litigation.  And it can’t help recruitment efforts when it seems the corporate slogan could be changed from “HP Invent” to “HP Sue.”

HP has a heritage as a proud California–based company.  Bill Hewlett and Dave Packard built their world-class organization in the one state that won’t generally enforce employee non-compete clauses. In Silicon Valley, human capital is as mobile as financial capital.  Employees’ freedom to find the best way to use their skills and advance their careers is a key factor that has driven the development of Silicon Valley.  Trade secrets are protected by intellectual property laws, not by non-compete agreements and vague theories that a new job would “inevitably” cause an employee to use trade secrets of his or her former employer.   Somehow, Bill Hewlett and Dave Packard didn’t see a need to build a company based on suing people who might want to leave.  As HP has grown in states other than California, however, it’s tried to impose restrictions on employee mobility.

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