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Friday, June 09, 2017

Take the Talent, Leave the Secrets: The Race to Self-Driving Cars and the Google-Uber Lawsuit

Sharing the piece I published today in the Harvard Business Review about the race to autonomous cars. Talent Wants to be Free, but leave the secrets behind:

A star employee leaves a company to join, or become, a competitor, and the former employer sues both the departing employee and the company who hired him for stealing its secrets. Legal battles like that are pervasive across all industries, but one of these high profile, high-stakes lawsuits is at the center of the race to self-driving cars: the dispute between Google and Uber. The suit will do more than determine the future of an important industry — it is a window into the rising number of disputes over talent mobility and trade secrets.

The case is complicated, but in this piece I’ll lay out the facts as we know them, and explain what’s at stake. Ultimately, it’s people more than information that should be free. Hiring employees from another company should be easy — and protected by law — but employers need to emphasize that those hires come with know-how and skills, but not with trade secrets.

 

continue reading the article on HBR. Happy to get your reactions.

Posted by Orly Lobel on June 9, 2017 at 03:37 PM | Permalink

Comments

I think this Uber-Waymo lawsuit is a really great new example illustrating your book's thesis, and many will agree that competitors should be able to take employees, but not IP. It seems relatively clear-cut in this case that Uber took both Waymo's employee and IP because the employee physically took Waymo’s classified files with him to Uber. But it seems to become grey when the employee has a bunch of IP in his head from working on previous projects and then uses it to some extent in his work for the new company. That's when I start wondering about where the line is between the employee and IP...

Posted by: Margaret Ryznar | Jun 20, 2017 5:33:09 AM

Thanks Margaret, exactly right. The goal of human capital law, the judicial interpretation of statutory and contractual obligations of employees post-employment, should be to reduce as much as possible the uncertainty regarding that large gray area in between; and to make sure we don't over-expand that gray area as proprietary. Anything that is merely memorized is suspect in my view - it is of course possible that a trade secret is completely in one's head, but usually the default should be that if one didn't physically take a forumla; code; technical information, then probably whatever she knows has become part of her general skills (for example, "negative know how" - knowledge on what doesn't work...).

Posted by: Orly Lobel | Jun 20, 2017 7:16:01 AM

Thanks Margaret, exactly right. The goal of human capital law, the judicial interpretation of statutory and contractual obligations of employees post-employment, should be to reduce as much as possible the uncertainty regarding that large gray area in between; and to make sure we don't over-expand that gray area as proprietary. Anything that is merely memorized is suspect in my view - it is of course possible that a trade secret is completely in one's head, but usually the default should be that if one didn't physically take a forumla; code; technical information, then probably whatever she knows has become part of her general skills (for example, "negative know how" - knowledge on what doesn't work...).

Posted by: Orly Lobel | Jun 20, 2017 7:16:01 AM

Thanks Margaret, exactly right. The goal of human capital law, the judicial interpretation of statutory and contractual obligations of employees post-employment, should be to reduce as much as possible the uncertainty regarding that large gray area in between; and to make sure we don't over-expand that gray area as proprietary. Anything that is merely memorized is suspect in my view - it is of course possible that a trade secret is completely in one's head, but usually the default should be that if one didn't physically take a forumla; code; technical information, then probably whatever she knows has become part of her general skills (for example, "negative know how" - knowledge on what doesn't work...).

Posted by: Orly Lobel | Jun 20, 2017 7:16:02 AM

Thanks Margaret, exactly right. The goal of human capital law, the judicial interpretation of statutory and contractual obligations of employees post-employment, should be to reduce as much as possible the uncertainty regarding that large gray area in between; and to make sure we don't over-expand that gray area as proprietary. Anything that is merely memorized is suspect in my view - it is of course possible that a trade secret is completely in one's head, but usually the default should be that if one didn't physically take a forumla; code; technical information, then probably whatever she knows has become part of her general skills (for example, "negative know how" - knowledge on what doesn't work...).

Posted by: Orly Lobel | Jun 20, 2017 7:16:03 AM

Thanks Margaret, exactly right. The goal of human capital law, the judicial interpretation of statutory and contractual obligations of employees post-employment, should be to reduce as much as possible the uncertainty regarding that large gray area in between; and to make sure we don't over-expand that gray area as proprietary. Anything that is merely memorized is suspect in my view - it is of course possible that a trade secret is completely in one's head, but usually the default should be that if one didn't physically take a forumla; code; technical information, then probably whatever she knows has become part of her general skills (for example, "negative know how" - knowledge on what doesn't work...).

Posted by: Orly Lobel | Jun 20, 2017 7:16:05 AM

Very interesting and lots to think about, thank you. I would be suspect of memorization too, but I suppose there is a physical limit to how much you can store in the brain anyway.

Posted by: Margaret Ryznar | Jun 20, 2017 8:21:34 PM

Very interesting and lots to think about, thank you. I would be suspect of memorization too, but I suppose there is a physical limit to how much you can store in the brain anyway.

Posted by: Margaret Ryznar | Jun 20, 2017 8:21:36 PM

Does this rule (re memorization) make star employees out of those with excellent memories and access to critical information?

Posted by: Matthew Bruckner | Jun 21, 2017 9:44:24 AM

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