Courts grants Microsoft restraining order in non-compete case
January 28, 2011
On Wednesday, multi-national software company Microsoft won a temporary restraining order preventing a former executive from being hired by Salesforce.com, a competitor of Microsoft.
The former executive reportedly joined San Francisco-based Salesforce.com last week as senior vice president of global public sector. Microsoft filed a complaint in King County superior court in Seattle, accusing the man of violating a confidentiality and non-compete contract with Microsoft. Microsoft is based out of Redmond, Washington.
The temporary restraining order was requested in order to give the company time to gather enough evidence to justify a permanent injunction against the former executive.
Microsoft and Salesforce.com are direct competitors in the area of “cloud” computing services for business professionals. Last year the two companies mutually sued the other for patent infringement, though they settled the matter before it reached trial.
During his time at Microsoft, the former executive is had access to business plans for customer-relationship management and cloud computing solutions and customers.
According to Microsoft’s lawyer, the former executive had knowledge of Microsoft’s “sensitive customer and competitive information” and was taking that knowledge to a direct competitor in a job focusing on the “same solutions and customers.” Such behavior “directly violates the confidentiality and non-competition agreements signed upon beginning work with our company.”
While courts in some states tend not to enforce non-compete agreements, courts in Washington will enforce them if they are reasonable. New Jersey courts also typically enforce such agreements if they are reasonable in scope, meaning that they seek to protect legitimate employer interests and are not harmful to the public.
Source: Wall Street Journal, “Microsoft Wins Court Order in Case of Former Executive,” Nick Wingfield, 26 Jan 2011.