Beware of Noncompete Agreements

By Donald Sears  |  Posted 2010-02-22 Print this article Print

Even with the economy all topsy-turvy, don't be surprised if your technology company comes after you if you go to a rival--even if your boss and department heads give you a verbal blessing when you find a new gig.

Case in point: Daniel Aderhold, a 31-year Motorola sales executive (a vice president) who was laid off last May, but took a job with rival Ericsson after Motorola did not land a deal with Verizon, according to a report by Workforce Management. His problem? Aderhold had signed a confidentiality agreement years back that included a noncompete clause.

A year ago, Motorola lost out to Ericsson and Alcatel Lucent on a bid to become a supplier of fourth-generation network equipment, known as LTE or long-term evolution, to Verizon. The loss was a serious blow to the viability and value of Motorola's network equipment business...

Aderhold says that before taking a job with Ericsson in mid-June, he cleared it with Fred Wright, senior vice president of Motorola's network business. "Wright congratulated me on finding a new position, plainly indicated he saw no problem with my employment at Ericsson, as I would not be competing with Motorola since it had recently lost the bid to be an approved LTE vendor to Verizon Wireless," Aderhold's affidavit states.

Well, someone in legal or someone in another department at Motorola saw things a bit differently and does not want Ericsson to use whatever talents--and product strategy information--Aderhold may have in his knowledge bank.

The problem is that the agreement is getting in the way of allowing Aderhold to earn a living, especially knowing how tight hiring is at most levels in technology companies lately.

It's a common situation to see workers go to competitors in technology, but as you climb the ladder, be aware of the stress and pain that may come, years down the road when you need a gig, but signed an agreement that limits your options.

Note: One very good thing is California-based companies (think Silicon Valley) are not allowed to issue noncompete clauses. The problem is that if you worked for a company outside of California but want to work for one, a judge may uphold the law in another state. Last year, an EMC employee who tried to move over to HP was stopped from taking the job by a California judge.

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