Companies suing each other after an employee leaves one company to join another, especially when the companies are competitors, over the details in the employee's non-compete agreement is not all that uncommon. Particularly in the tech industry when many rival companies are chasing many of the same kinds of tech-driven breakthrough projects like AI, self-driving vehicles, robotics, and more - the loss of a key employee or two to a rival can have significant competitive consequences and impact.
A debate can be had whether or not the entire idea of employee non-compete agreements are beneficial or necessary (or enforceable), but for the purposes of what I wanted to call to your attention today, let's all accept that for the moment such agreements do exist, and from time to time, are actively enforced by companies trying to protect their IP from escaping to a competitor, (along with the employee).
The story I wanted to highlight is about a big tech company fight over an employee non-compe
te, but not one of the ones we expect - surrounding some star engineer working on the latest VR or AI tech - it centers around HR, more specifically, around a Chief Diversity and Inclusion Officer heading to Microsoft from IBM.
Here are some details and context from coverage in Business Insider - Microsoft just hired a chief diversity officer - and IBM is suing them over it:
Tech companies have a less than stellar record hiring women and minorities. But these companies will apparently do whatever it takes — including launching a legal fight — to hire one type of person: a Chief Diversity Officer.
IBM is suing Microsoft for poaching its top diversity officer, Lindsay-Rae McIntyre in a case that could prove just how important diversity, recruitment, and retention has become for tech companies.
McIntyre, who joined IBM in 2006, was named chief diversity officer of Microsoft on Sunday, after serving in the same role and as VP of human resources at IBM. IBM, in its complaint, argues that McIntyre had access to diversity data, strategies, methodologies and initiatives that are confidential, and that she "will use, rely on or divulge" these strategies in her new role.
On Monday, IBM was granted a temporary restraining order in New York federal court, which prevents McIntyre from working for Microsoft until the court decides otherwise.
"McIntyre was at the center of highly confidential and competitively sensitive information that has fueled IBM's success in these areas," a representative for IBM said in a statement. "While we understand Microsoft's need to deal with mounting criticism of its record on diversity, IBM intends to fully enforce Ms. McIntyre's non-compete agreement to protect our competitive information."
A really interesting case it seems to me. I admit to not following the ebbs and flows and latest cases in employment law all that closely, but I do follow lots of news and I don't recall seeing a major non-compete case with this kind of profile that focuses specifically on an HR executive, and perhaps more interestingly, on specific human capital management strategies. Whatever specific policies, programs, maybe even some technology applications too that IBM, under Ms. McIntyre's leadership were employing to improve diversity, IBM is contending that these combined represent IP that is not just company confidential, but also represents relevant and demonstrable competitive advantage.
It probably matters that IBM and Microsoft are highly likely to be competing for many of the same kinds of talented people across a wide spectrum of roles. And it also probably matters that (as I have pointed out on the blog for a couple of years on the CHART OF THE DAY series), that labor markets in general are really tight, and for certain 'hard-to-find' roles are incredibly tight. Recruiting and retention ratchets up the CEO's list of priorities when the people the company needs are in high demand and when your competitors are willing to go really far to beat you in the talent game - whether recruiting new grads or poaching your top execs - like Ms. McIntyre.
The diversity angle here is interesting and timely, and probably contributed to why this was a story coverred in the general tech press. But what would be more interesting to me is to see a major non-compete battle be launched over say a CHRO or a VP of Talent, or even a Global Leader of Talent Acquisition. I'd like to see a major, Fortune 50 or so company go to battle over an HR/TA leader, contending that their particular insights, and their specific talent strategies are so important, in fact just as important as the knowledge of the latest AI hotshot, that the company is willing to battle in court to keep that HR knowledge in-house.
This is a really intriguing case, I will keep an eye on it for sure. It would be interesting and validating too, if IBM wins in this case, and HR programs and strategies are shown to be true (at least in the court's view), completive advantage. And it would be pretty cool for HR to have some more over the top recruiting and retention fights go on over HR people for once.
Have a great day!
Steve