• February 17, 2014
Hermit Thrush Nest, Photo by Kent McFarland

Hermit Thrush Nest, Photo by Kent McFarland

Update (February 17, 2014): Nest says Honeywell’s amended complaint trying to stop a former Honeywell employee from working for Nest, a direct competitor, in the thermostat business, still won’t fly.

Update (January 29, 2014): Honeywell put some more meat on the bone and filed an amended complaint.

Original post (January 28, 2014) (under the subject line: Is It Hot In Here or Is It Just Me? The Paradox of Defending Against Employee Poaching): Imagine that you are the big bird, the industry leader, sitting on top of your golden eggs.  You have been THE industry leader for one hundred years. But now you hear the crackling of branches, and, otherwise, maybe an eerie silence aside from the bone-chilling breath of a new predator too close.

You are Honeywell.

Nest is all around you. And now they’ve hired someone away from your sales team. What are you to do?

It is not an easy situation because, if the poaching was done properly (that is, without misappropriating Honeywell property of any kind, without breaching any contractual obligations of non-solicitation and so on), what is there to say?

One can certainly identify with the older established firm whose decades of experience are inevitably going to be exploited by the new company through the expertise of Honeywell-trained employees. One cannot dispute that a ten-year Honeywell employee probably learned a thing or two from that experience from which the upstart will benefit.

On the other hand, the labor market is, of course, a market. The ability for employees to maximize their earning power and, like a natural resource, to be free to be diverted to where the need for it is greatest is a vital component of our market system.

So it seems to me that the question, ultimately, is whether Nest and the former Honeywell employee have played by the rules.  If so, it is hard for me to believe that Honeywell can prevail with the argument that its former employee simply cannot work for Nest without revealing confidential Honeywell trade secrets. This is the basis of the former employee’s motion to dismiss the Honeywell complaint, in any event.  The case is before U.S. District Court Judge Patrick J. Schiltz (D. Minn.).

(Nest, by the way, was recently purchased by a flash-in-the-pan high tech internet search company with an infantile name. That cannot be good news for Honeywell.)

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