This morning brings us more news on the Anti-Competition front. We have anonymous reports of a probe by the US Department of Justice into Apple, Google, and Yahoo for anti-competitive practices.
No, this is not about them shutting out the competition nor about them making insider deals [although that Google/Apple issue is still under investigation]. No – this is simply about each company using extreme measures in employment contracts to prevent their employees from leaving and joining a competing company.
Non-Compete and Non-Disclosure agreements are common things since the dawn of business management. In England, the term "gardening leave" usually applies when an employee leaves a company and then has to wait anywhere between 6-12 months before joining a new company. Every company has them for upper management, Designers, marketing, IT… and the list goes on. For the most part they are designed to prevent an employee from moving shop and passing on company secrets to their new employer. On the surface these protections sound great; but in the past these types of contracts have been challenged in court and many have been thrown out as being too restrictive on the employee.
Once, I was asked to sign a three year non-compete clause that stated that if I went to work for a different company in the same field I had to pay back my current level of salary to the company that wanted to hire me. As you can imagine I did not sign that, nor did I go to work for them – and the contract didn’t have paid salary for those three years of non-compete business.
Apple, Google and Yahoo are being looked at for a similar practice. It seems they are making their employee contracts so restrictive that the employee almost HAS to remain where they are. This is wrong on many levels. But in the world of anti-trust is represents an effort to stifle competition by hoarding talent and skill sets. In the real world it is like a form of indenture, the employee cannot look for better working conditions, environment, and salary due to the limitations of the employee contract.
Really nothing good can come from this type of behavior.
We have been seeing more and more evidence of the inner workings of our top technology companies lately. We saw Intel exposed for rebates and shady dealings with OEMs [although I still question the fine and the judgment], we have heard rumblings that AMD is attempting to control its AIB [Add in Board] partners and giving preferential treatment to some, we have even heard that mighty Google might be guilty of this by having deals in place with Apple for the iPhone through having one person sitting on both boards.
Now we see employee contracts preventing competition; is this a new pattern or is this the way business has always been done. My only hope is that big business dealings will become more exposed and the global consumer will wake up to the realities that are out there.