11 posts categorized "Employment"

Employees pulling to refresh patent policy?

One of the assertions (arguments?) in Jaron Lanier's new book is that the disruption of the buggy whip industry was not as catastrophic for the economy as it might have been, because a labor movement stepped in and demanded improvements in working conditions and wages as the auto industry took shape.

6a01156e3d83cb970c0168ea48e0fc970c-500wi(Examples like this throw into relief his critique of the digital economy: labor and experience have been devalued, Lanier says, and literally taken out of all accounting.)

Well, I don't want to overstate the value of the Twitter's Innovators Patent Agreement, but it looks like it could gain traction, drive toward becoming an industry standard, if individual engineers bargain for the benefit of its use as a term and condition of employment.

The idea is that, as part of the bargain for an employer taking ownership of a patent on an invention, the employer concedes that the inventing employee has the power to decide whether the patent may be used to sue other companies.

Inventor Loren Brichter, whose pull-to-refresh feature was awarded a patent and is covered by the Twitter agreement, is quoted in The Verge as saying, "I really hope this becomes the de facto standard for hiring — engineers could demand this in their contracts."

For an overview and critique of the Twitter Innovators Patent Agreement that ran on this blog last year, click here.

Sheryl Sandberg's Silicon Valley HR

For Mother's Day, I finished reading Sheryl Sandberg's book, Lean In.

Sandberg gives advice that she expressly admits (she hopes, I hope, we all hope) will be dated within the lifetimes of our children, if not sooner.

For instance, she advises women to conduct job negotiations following an approach she attributes to a Harvard Professor Hannah Riley Bowles: first, they must be "nice," and second, they must justify their requests. Men needn't bother. "I understand the paradox," Sandberg acknowledges, "of advising women to change the world by adhering to biased rules and expectations."

That's bold.

6a01156e3d83cb970c017eeb1d7f56970d

She also describes some non-conventional HR practices she has followed as an executive, including a willingness to ask women about their plans for children, sometimes even in a job interview context.

That's bolder. 

Late in the book, she reflects on how employment discrimination law presents an impediment to frank discussion about issues that directly impact the ability of employers and employees to discuss where family and professional lives will intersect:

"The first time I asked a prospective employee if she was considering having children soon, I understood that doing so could expose me and my company to legal risk. Unlike many women, I was in a position to evaluate this risk and chose to take it. The laws that protect women and minorities and people with disabilities, among others, from discrimination are essential, and I am not suggesting they be circumvented. But I have also witnessed firsthand how they can have a chilling effect of discourse, sometimes even to the detriment of the people they are designed to defend. I don't have a solution to this dilemma and will leave it to public policy and legal experts to solve. I do think this is worth some serious attention so we can find a way to deal with these issues in a way that protects but doesn't suppress."

A lot to unpack there.

Image from Google Maps.

Standard docs vs. differences state by state

A web service called UpCounsel tweeted a link this morning to a template confidentiality and inventions assignment document, so I thought I'd have a look.

The chief merit of the draft is that it's readable. That's important, particularly from the perspective of a company desiring to have enforceable written agreements with employees.

UpCounsel partial screenshotGenerally speaking, two businesses entering a contract will be presumed to have either equivalent bargaining power, or at least sophistication or the means to be informed about the document. With regard to contracts between a corporate entity and and individual employee, other laws and public policies kick in that give judges latitude to re-balance, you might say, the contract to not too egregiously disfavor the employee.

So to be able to say, look, the employee could read this and understand what it said, that's important.

The chief failings of the template follow, I think, from the template's aim to provide a "one size fits all" solution. It's designed to straddle the question of whether the person signing is an employee or contractor, and it's designed to be agnostic regarding the state in which the employee might be providing services.

Assignments of invention from consultants and from employees are not the same thing. Maybe I should say, the two situations have their own constraints and present their own opportunities.

I'll focus on just a couple differences that should follow from the employee/contractor distinction, as it pertains to an assignment of inventions.

A person in an employment relationship will have duties of loyalty and other common law presumptions that favor the employer, in terms of the employer's rights in work product; a bona fide contractor, on the other hand, should be presumed to have more autonomy in the relationship, which means the contractual assignment from a contractor will have to take more care to spell out what the deal is vis a vis the contractor's pre-existing IP.

That said, state statutes are expressly more protective of employees than contractors in another regard, which is the scope of the contractual assignment right. California, Washington and other states have specific notice requirements that, the law says, must be included in the employee inventions assignment contract. The UpCounsel template fails to deliver these required notices, and for that reason alone should not be used, at least not in the form presented.

The lesson I draw for this morning is this: we don't have a uniform national law that applies to all US businesses and their contractual relationships; we have 50 or more jurisdictions to deal with, and their differences. Lawyers have a vested interest in the mess, no doubt, but this current reality, at least in the near term, presents a real obstacle to the promulgation of industry template like this one from UpCounsel.

Amazon and Google spar over cloud services talent

While I've been distracted trying to catch up on the fight in California between Zynga and Kixeye over management talent, Amazon has brought a similar case in my own Seattle backyard. Amazon is seeking to hamper what a former AWS sales exec may do for Google.

Geekwire screenshotThe Amazon suit seems to have come to a head. Geekwire reported last week that the federal judge in the Amazon case has issued a preliminary injunction, an order restraining the ex-Amazon employee from soliciting Amazon customers.

Now that sounds like a win for Amazon, but it's not really. The judge limited the duration of the court's restriction to the length of a contractual restriction that Google itself put on the executive when Google hired him.

Geekwire's report put the Amazon case on my radar and Todd Bishop's policy of posting links to primary source documents gave me a chance to look at the judge's order.

Check out the guest post I wrote for Geekwire to sum up what I found. It's titled Legal lessons from Amazon’s ‘noncompete’ battle with Google and has just been posted.

Happy new year everyone! I am so thankful for your support, your engagement, your passion. JLM's exhortation in the thread on Saturday's post will be my motto for 2013!

Zynga's Employee Invention Assignment and Confidentiality Agreement with Alan Patmore

I've just started looking at documents filed in the Superior Court of California, County of San Francisco, in connection with a suit brought by the game maker Zynga. Zynga filed the suit initially against its former employee, Alan Patmore, and has since amended its complaint to name Patmore's new employer, another game company, Kixeye, as well.

Alan PatmorePatmore is a big deal in the game industry. In an entry that appears to pre-date Zynga's lawsuit, Wikipedia credits Patmore for delivering many succesful games, including one from 2002 based on The Lord of the Rings, which, Wikipedia says, sold 1.8 million copies. "Patmore," Wikipedia states, "is a much sought-after authority within the industry on topics including project management, creative development, and industry trends and practices."

Keep the phrases "project management" and "industry trends and practices" top of mind, because the coutcome of the fight among Zynga, Patmore and Kixeye may well turn on the extent to which distinctions can be drawn between Zynga-specific trade secrets, on the one hand, and general game industry expertise, on the other.

Though we're not going to unpack the various allegations, counter-allegations and defenses in the lawsuit, not today.

Instead, we'll begin our look into the case by reviewing an Employee Invention Assignment and Confidentiality Agreement between Zynga and Patmore, which was appended as an exhibit to Zynga's initial complaint.

Because Zynga is based in California and because Patmore lives in California and worked for Zynga in that state, we know Patmore's agreement with Zynga is not going to include any express post-termination non-compete covenant. To the extent that Zynga wants to impede what Patmore might accomplish for Kixeye, it is going to have to allege and show behavior on the part of Patmore that is unfair, illegal, or in breach of a contractual covenant (other than a non-compete).

Is there anything unusual in that Employee Invention Assignment and Confidentiality Agreement that might tend to give Zynga's claims broader scope?

No and yes.

By and large, the Zynga Employee Invention Assignment and Confidentiality Agreement is standard and what you would expect to see in use by an angel or VC-backed startup or emerging technology company. The Agreement requires the employee:

  • to acknowledge that his work for the company is work for hire,
  • that he assign company inventions to the company,
  • that he schedule out prior inventions he means to retain,
  • that he waive moral rights, and
  • that he keep the company's proprietary information confidential.

The Agreement also contains a one-year, post-termination covenant to not solicit Zynga employees or consultants.

All of the foregoing is normal. But there are two nuances in the Zynga Employee Invention Assignment and Confidentiality Agreement, pieces of bespoke drafting, that could be important, from Zynga's perspective, in expanding the scope of what may be fairly regarded as trade secrets for purposes of this case.

The first bit of custom drafting is in the definition of Proprietary Information. Here's an excerpt of what the Agreement says are examples of the kinds of information that ought to be regarded as proprietary to Zynga:

"Proprietary Information may include information I learn about or develop in connection with my employment with the Company, such as: . . . (ii) techniques and methods for developing, coding, or improving online social games; (iii) techniques and methods to create 'virality;'  (iv) measurement techniques, and specific functionality that increases monetization and both measures and increases retention metrics; . . . (xi) the particular needs and preferences of the Company's suppliers, platform providers and business partners, and the Company's approaches and strategies for satisfying those needs and preferences . . . ."

Arguably, much of what is described in these examples could fall under the rubric of general industry knowledge or experience gained through work for a succession of employers. By including these items in a "laundry list" of what should be regarded as proprietary, Zynga is doing what it can to shift the balance somewhat, and expand, by virtue of agreement of the parties, the scope of what should be regarded as protected. On the other hand, and as you would expect, the Agreement has a standard carve-out to the definition of Proprietary Information, eliminating from the scope of what is protected such information as is generally known, was previously known, or is independently developed. This carve out will temper the expansive effect of the "laundry list."

And here's the second bit of custom drafting, an entire section of the Agreement that is clearly calculated to secure an employee's acknowledgment of an expansive view of what should be regarded as trade secret:

"14. Non-Solicitation of Suppliers/Customers. During and after the termination of my employment with the Company, I will not directly or indirectly solicit or otherwise take away customers or suppliers of the Company if, in so doing, I access, use or disclose any trade secrets or proprietary or confidential information of the Company. I acknowledge and agree that the names and addresses of the Company's customers and suppliers, and all other confidential information related to them, including their buying and selling habits and special needs, whether created or obtained by, or disclosed to me during my employment, constitute trade secrets or proprietary or confidential information of the Company." 

The title of the section leads you to believe you'll find an express, post-termination restrictive covenant, though the actual drafting is circular. The net intent appears, again, to get the employee's buy-in to an expansive view of the kinds of information that should be regarded as proprietary to Zynga.

To be continued.

Photo credit: VideogameVisionary.com, Alan Patmore in 2008, as posted on Flickr.

"When it absolutely, positively, has to be decided within a decade."

Startups, emerging companies, and even behemoths like Microsoft and Amazon have to watch the legal line drawn between "independent contractors" and "employees." It's a subject the comes up a lot in startup law and other legal blogs, and it will continue to come up.

FedextruckonedgeLast week the Washington State Supreme Court published a decision that interprets the Washington Minimum Wage Act. For purposes of that statute, the Court decided that "employee" status was to be determined by an "economic dependence" inquiry, rather than a probing of the employer's "right to control" the activities of the person-in-question.

I'm not going to take this occasion to write a post about the perils of misclassifying an employee as an independent contractor. The case adds learning to that subject, but there are probably better judicial opinions to cite that contain broader discussions of the various factors to consider.

Rather, I'd like to mention two things that struck me about the opinion:

(1) It took a long, long time for the case to be resolved (if in fact it is now finally resolved). The opinion says that the case was brought in 2004 by FedEx pickup and delivery drivers who "handled a single route over the three-year period preceding the filing of the complaint." So it appears to have taken about a decade to resolve this fundamental question about whether the drivers were either employees or bona fide independent contractors.

(2) It's fascinating, almost like archeology, to see language from a bygone political era serving to parse legal distinctions that yet have impact on today's decidely more corporate society. Take this passage from the opinion as an example:

'The right-to-control test serves to limit an employer’s liability for the torts of another. By contrast, minimum wage laws have a remedial purpose of protecting against “‘the evils and dangers resulting from wages too low to buy the bare necessities of life and from long hours of work injurious to health,’” United States v. Rosenwasser, 323 U.S. 360, 361, 65 S. Ct. 295, 89 L. Ed. 301 (1945) (quoting S. Rep. No. 884, at 4, 75th Cong., 1st Sess. (Wash. 1937)), and “to insure that every person whose employment contemplated compensation should not be compelled to sell his services for less than the prescribed minimum wage,” Walling, 330 U.S. at 152.'

The quotes from the 1930s and 40s strike me as language that the two political parties in America today would absolutely shun.

Photo: Whitewolf Photography / Flickr.

Better Than Stock Options?

Have you seen Valve's Employee Handbook yet?

It looks like it was published in book form last month, but it hit the web in the last few days.

Screen shot 2012-04-22 at 8.59.22 PMIf the leaking of the handbook is a recruiting move, it's a brilliant one.

It's worth flipping through, for the text, the cartoons, and the strong sense of book design.

In terms of substance, the management philosophy expressed from pages 8 to 14 struck me as the most radical and most subversive. Here's an excerpt:

"Since Valve is flat, people don’t join projects because they’re told to. Instead, you’ll decide what to work on after asking yourself the right questions (more on that later). Employees vote on projects with their feet (or desk wheels). . . .

"If you’re working here, that means you’re good at yourjob. People are going to want you to work with them on their projects, and they’ll try hard to get you to do so. But the decision is going to be up to you. (In fact, at times you’re going to wish for the luxury of having just one person telling you what they think you should do, rather than hundreds.) . . .

"Because we all are responsible for prioritizing our own work, and because we are conscientious and anxious to be valuable, as individuals we tend to gravitate toward projects that have a high, measurable, and predictable return for the company. So when there’s a clear opportunity on the table to succeed at a near-term business goal with a clear return, we all want to take it. And, when we’re faced with a problem or a threat, and it’s one with a clear cost, it’s hard not to address it immediately. 

"This sounds like a good thing, and it often is, but it has some downsides that are worth keeping in mind. Specifically, if we’re not careful, these traits can cause us to race back and forth between short-term opportunities and threats, being responsive rather than proactive.

"So our lack of a traditional structure comes with an important responsibility. It’s up to all of us to spend effort focusing on what we think the long-term goals of the company should be." 

Pictured: an illustration from the Valve Employee Handbook.

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