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cbenoi1

Talent war & employment contracts -- EA vs Ubisoft

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I though it could be useful to report a bit on the recent war for talent between EA and Ubisoft in Montreal (QC, Canada). The matter is educational as far-reaching non-competitive contract clauses are becoming the norm. Last August, EA announced it would open up a new studio facility in Montreal; and that studio would develop brand new franchises from scratch. That''s enough to attract a huge pool of very experienced talent. There were something like 1500 resumes sent for 15 positions. 50 of those resumes came from neighboring Ubisoft, and 5 of them got a job at EA. On the 29th August, Ubisoft asked the courts for an injunction that would prevent its former 5 employees from crossing over to EA, fearful they would leak trade secrets. It so happens that the employees signed a non-competitive agreement as part of their employment contracts, which prevents them from working for a competitor for a full year, in Canada, the US and Mexico. One of the 5, Francois C. Pelland - the lead level designer for SplinterCell, is now without a job until the matter is settled in court on October 6th. At the heart of the problem is determining if such a clause can prevent someone from earning a living in the line of work he or she chooses. -cb

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Coming from the networking world, they have similar agreements that prevent you from going to another competitor and dishing out trade secrets. When I left Cisco I had to go through a long speech and document stating that I wouldn''t go to companies X,Y,Z...etc and work. I understand the fear of companies having their employees leave, en masse, to another company who can entice them to join, but I''m not sure if that superceeds a persons right to work where they want.

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Fortunately this sort of thing is illegal in the UK since an Act passed in March 2000 (ISTR).

Although a surprising number of people signing contracts of this nature are unaware of this fact. And a surprising number of people writing contracts too, it seems.

Cas

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PrinceC - do you have any links to any legal evidence of this in the UK or any precedence with regard to this ?

Every employment contract (games and otherwise) I''ve signed over the past 10 years in the UK for UK companies has had some variation on that "no compeyition" clause.

AFAIK at least one new development team who broke away from a well known team in the UK has been sued (i.e. through the UK courts) by another (v.major [top-10], US owned) company regarding this exact issue (i.e. unlimited non-competition clauses)

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Guest Anonymous Poster
The fact that such clauses are commonly used means nothing. Many employers in the US, and presumably in the UK as well, have illegal clauses in their contracts, for a number of reasons. The forms they use may be old and outdated. Or they are ignorant of the law. Or they are deliberately trying to deceive their employees.

I would do some research to find out what the laws are in your local country and/or district, state or province. In the US, non-competes are illegal in some states (such as California), and perfectly legal in others.

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I was involved in a litigation here in illinois about 8 years ago.. and in Illinois the no compete had a distance like 240 miles.. but it was a manufacturing no compete. Things could have changed since then also..

Mike

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UPDATE -- 09-OCT-03

EA and Ubi got before the judge on the 6th as expected but there was no immediate closure on the matter. The court receeded and deliberations will take more time than expected (weeks?). In the mean time, the employees at the heart of the issue are still in a legal limbo.

-cb

[edited by - cbenoi1 on October 9, 2003 7:59:32 PM]

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UPDATE 11-OCT-03

Ubisoft won its injunction against EA Montreal. The 5 are effectively prevented from working for a competitor for the specified amount of time in their contracts.

Personally I think Ubi intended to damage EA''s new franchise launch schedule (presumably xmas''04), not protect its IP as claimed. It''s sad the 5 - who were used as intermediaries in this fight - now have to go job hunting.

-cb

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Guest Anonymous Poster
As far as I know non-competition clauses are often in job contracts, but are not legally binding in Europe. As soon as you quit your job or get fired the contract ends and you are not bound by it anymore.

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You may well be right that they are not binding in Europe. However, the fact that a contract term has ended does not mean you can no longer be bound by it. Clauses can continue beyond the termination of an agreement if the clause states that it is binding until X date or Y months/years after termination of the agreement.

An amusing little story on the non-compete front. When Probe was sold to acclaim the key staff had to sign new contracts, which included a non-compete clauses. The head of Probe paid a good lawyer to draft these contracts.

He then fell out with acclaim and left Probe. A few months later one of his key staff also left but was hit by acclaim with this non-compete clause. His former boss kindly paid the same lawyer he had used to draft the contract to devise a case proving that the clause (she had drafted) was not binding.

Talk about getting paid both ways!

Dan Marchant
Obscure Productions
Game Development & Design consultant

[edited by - obscure on October 14, 2003 2:44:48 PM]

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