Google Responds To PayPal Lawsuit: People Have The Right To Seek Better Jobs

http://techcrunch.com/2011/05/27/google-responds-paypal-lawsuit/

by ssclafani • 15 years ago

88 44 15 years ago

nkassis• 15 years ago

I guess it's to the point that what is in your head is no longer yours. Never had to deal with those kinds of issues personally but if someone told me I couldn't get another job somewhere else for a few years to keep what's in my head safe I'd be baffled.

cydonian_monk4• 15 years ago

I'm still baffled that I agreed to exactly those terms when I hired on where I'm at now (3 years non-compete, including all competitors, vendors, and customers (which is essentially everyone)). But the job prospects were weak, especially for someone with no legit programming experience and a hardware-focused degree (and no hardware firms were interested). It's our stance that since we "train" folks from nothing, if it's in your head we probably put it there.

Don't know that we've ever enforced such an agreement, but it is in ink just in case it's needed.

SystemOut• 15 years ago

Disclaimer: This assumes you're in the US...if not I have no idea how it might apply in other countries.

Depending on where you live it might not even be enforceable. Even large companies will put employee agreements in front of you that they KNOW aren't enforceable in a particular state but will do it since they know that most people don't know any better.

I had a particular instance when a company I was working for got acquired by a Texas based company and they sent us the employee agreement they use in Texas to us in California. There were no less than 4 completely unenforceable clauses in that contract. And this was a public company doing this.

If you live in Texas, though, you're screwed.

FeelsGoodMan69• 15 years ago

Do you work at Susquehanna?

tptacek• 15 years ago

If they're your employer's trade secrets or intellectual property, they aren't. If you memorize a particularly interesting C function one of your coworkers writes, that's in your head too. But your company paid for that function, a notion you accepted when you signed your employment contract.

My point being, oversimplifying the issue by saying [pp] "I guess we don't own what's in our own heads" doesn't really move the discussion forward.

mestudent• 15 years ago

It has been that way for decades though, engineers are taught that if you come up against a similar problem that you have already solved for a previous company it is ethically wrong to give your solution to the new company.

I find it weird but it is understandable from a competition point of view. If it wasn't this way you would probably see a lot more eager competitive hiring for opposing companies in order to gain an edge.

wglb• 15 years ago

I have signed confidentiality agreements going back so far that I can't even remember. The list of industries that I can't work in would be moderately long, were it not for some companies simply going out of business. Now if you are not in a business that doesn't have something interesting going on, then you won't be baffled.

Otherwise, expect to deal with this.

olivercameron2• 15 years ago

From what I have read in the lawsuit, PayPal doesn't seem to be complaining that people have the right to seek better jobs, in fact that statement from Google comes across extremely childish. Their argument is that Bedier used trade secrets from PayPal to create Google Wallet, and used his knowledge of secret and upcoming PayPal products to sell it to the retailers (comparing an unfinished PayPal product to the finished Google Wallet).

ansy• 15 years ago

That just doesn't sound very convincing. If PayPal had an unfinished Wallet product before Google even started, what happened to PayPal's product? Did PayPal shelve it and now it's taking out its frustration on Google?

EDIT: Wow, lots of down votes just for asking a question?

olivercameron2• 15 years ago

It's not released yet, but that doesn't mean it's shelved.

smokeyj• 15 years ago

In America we believe ideas are property, and that companies can call dibs on ideas to bully people who use this idea later. It's a really good idea, and also why we need to censor the internet so that our property isn't stolen.

yanw• 15 years ago

It's all merely allegations at this point.

brown9-2• 15 years ago

That's not all; Paypal also alleges that another former Paypal employee recruited Bedier to Google while she was still under a 1 year no-recruitment contract, and in addition that Google was negotiating deals with Paypal and at the same exact time offering jobs to the lead Paypal executive (Bedier)

pointillistic2• 15 years ago

The Native Google products are far and few between. They are the Mountain View Raiders. Sometimes they buy a company, other times they buy the developers. For example even Chrome was created by ex FireFox developers. It's just that Mozilla is too weak and too dependent on Google's revenue to put up a fight.

In the payment business it's often the relationship with the merchants and processors, understanding how they work is even more important than the code or even the hardware. People are key in that business.

Forget about the industrial espionage, just hire a person who knows all the trade secrets. If PayPal and Google were a country there would be dead bodies on the streets of San Francisco.

BCM43• 15 years ago

> It's just that Mozilla is too weak and too dependent on Google's revenue to put up a fight.

Why would Mozilla want to put up a fight? It seems to me that One of Mozilla's biggest goals is working towards a better web, and that chrome as done quite a bit for innovation in the browser market.

esrauch2• 15 years ago

If Chrome eats too much of the Firefox userbase it will prevent Mozilla from being in a position to push the changes that they want to see.

mbrubeck• 15 years ago

It's not just Blake Ross and Chrome - Apple's Safari/WebKit team is led by Firefox co-creator David Hyatt. And long-time IE platform architect Chris Wilson left Microsoft to work on web platform stuff for the Google TV team...

(BCM43 is right that none of us at Mozilla have any reason to complain about ex-Mozillians and others helping to increase competition on the web.)

pointillistic2• 15 years ago

Even when there is a competition, the web mostly have been a winner take all medium. Google being the prime example. It's not even about the usage but all about the technological leadership. If usage was accounted for, IE6 would be a very impressive product.

paulbaumgart• 15 years ago

FYI, it's the other Firefox guy, Ben Goodger, who now leads the Chrome team at Google[1]. Blake Ross is apparently doing things unrelated to browser development, at Facebook[2].

1. http://en.wikipedia.org/wiki/Ben_Goodger

2. http://en.wikipedia.org/wiki/Blake_Ross

click170• 15 years ago

In order for something to be a trade secret, don't you have to protect whatever 'it' is?

Maybe I'm missing some key aspect to PayPal but what part of their tech/system is unique to PayPal, such that they can claim it is trade secret? I mean, if they aren't doing anything innovative and are just using existing technology in obvious ways (online payment processor), what could the trade secret possibly be? Something related to how they scale?

wmf• 15 years ago

Paypal's whole anti-fraud system is trade secret. Also, their mobile payment system hasn't even launched yet, so there's no way for us to know what's in there.

grellas3• 15 years ago

Google has issued a pretty tepid statement to what appears to be a highly problematic situation.

In its complaint (http://www.ebayinc.com/assets/pdf/fact_sheet/2011_PayPal_DOC...), PayPal alleges in meticulous detail how its chief negotiator over some two years on a major deal with Google for mobile payments on Android brought the deal between the companies to within a hair of signing and then, at the end of the process, did a series of interviews with Google to take a position working on its mobile-payment system. Not only was this person the chief negotiator on that deal, he was also PayPal's senior executive in charge of this area for his employer. On the eve of the anticipated signing (October 31, 2010) after two years of negotiations, Google told PayPal it wanted a restructuring the deal even while it was giving the negotiator a job offer. The negotiator accepted the offer, notified PayPal and was confronted about how this step was seriously problematic from a legal standpoint. He then changed his mind and told Google no. The parties once again revved up the deal and got to a signing stage for the second time by February, 2011. At that point, Google changed its CEO and, with Larry Page back in that role, Google killed the deal and hired the PayPal executive to lead its work in the mobile-payment area.

In the midst of all this, you also have a second PayPal employee who had been hired by Google in 2009 and was under a legal restriction not to solicit PayPal employees for a period of one year. With that restriction still in effect (or so PayPal alleges), she was actively soliciting not only the senior PayPal executive mentioned above but (according to the allegations of the complaint), a series of other PayPal employees who were part of the mobile-payments group.

It is way too early to tell what happened here, but here are a few thoughts:

1. The complaint is incredibly detailed, with much specific evidence of communications and events that do not look good for Google or the individuals sued. This level of detail is highly unusual for a complaint of this type and suggests to me that this is a very serious case, well-prepared and meticulous (and, of course, when the lead attorney is named G. Hopkins Guy III, as he is, you just know you are in trouble).

2. Employees owe a fiduciary duty to their employers to act in the best interest of the company and playing both sides of the fence at the end of a major negotiation is almost certain to raise serious issues about whether such duties were breached. This is possibly an even more serious problem here than is the trade secrets case.

3. California does not recognize the "inevitable disclosure" doctrine by which a former employee can be enjoined from taking a position on grounds that it will be "inevitable" that he would need to disclose important trade secrets in order to perform his duties. That said, any such case involves highly problematic issues and it would not take much evidence for a court to look at the whole picture and say, "what the hell is going on here." Google may be treading on thin ice here.

4. This sort of conduct usually evidences a cynical power play by a major company along "might makes right" grounds. Here, though, it is hard to believe that Google would be that cynical. Nor is PayPal a small company without resources. This part remains puzzling.

5. The real test will come if, as I assume, PayPal seeks to get a preliminary injunction blocking Google from using its mobile-payment technology because it allegedly based on a misappropriation of PayPal's trade secrets. This is where the evidence on both sides will come out and it will be much clearer whether Google did in fact commit wrongs as alleged. Until then, it really is hard to tell.

mikeryan• 15 years ago

Well stated. as always, just a question is there any potentially criminal actions here either on the part of Google or the Paypal/Google Exec?

grellas3• 15 years ago

There is federal law that defines theft of trade secrets as a crime.

The federal Espionage Act of 1996 provides: "Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for . . . interstate . . . commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly . . . steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information . . . shall . . . be fined under this title [i.e., up to $5 million] or imprisoned not more than 10 years, or both."

That said, it would be highly unusual for the authorities to attempt to prove a criminal violation in this sort of case. I think the overwhelming odds are that it will be treated as a purely civil case.

miespanolesmalo• 15 years ago

Beautiful comment with lots of juicy insights grellas. Glad I read your comment first instead of the Techcrunch article. I saved time and feel I got the goods.

I'll be looking out for more of your comments in the future.

ChuckMcM• 15 years ago

I found Google's response humorous in light of the fairly draconian (and according to my attorney unenforcable) employment agreement they ask you to sign when you go to work there. But that is all part of the 'game' here.

If you read this as Paypal negotiating to get some return out of the two years they paid their employees to negotiate a deal (which didn't close) it makes more sense. Lets say for the sake of argument that they pay them 200K/yr ($300K if you include benefits) and that they each vested 50K shares of Ebay stock, so maybe a $15/share gain on the stock over 2 years. That is $600K + $1.5M of 'cost' for the two execs ($2.1M) so settle out of court for $6M pay 2M to the lawyers and net $4M for the 'effort'.

Really sounds more like positioning to be paid off rather than a serious complaint.

itswindy• 15 years ago

"People Have The Right To Seek Better Jobs"

Seeking to hire a bank employee...as long as he/she empties a few bank safe boxes and brings them to me. Pay depends on the loot...

senthilnayagam• 15 years ago

As a entrepreneur do you want your ideas, intellectual property and key employees stolen?

No.

If google sitting on a cash pile can't build or innovate, let them perish, what they have done is stealing

Google Responds To PayPal Lawsuit: People Have The Right To Seek Better Jobs

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