EMC Sues Ex-Employees for Jumping Ship

A hot Silicon Valley data storage startup that’s looking to double its staff faces a challenge that goes beyond the tight talent market: Some of its recruits are being sued by their former employer.

LawsuitAfter reportedly losing 30 employees, EMC Corp. has gone to court, the Boston Globe reports. The company is suing some former employees and their new employer, Pure Storage Inc., based in Mountain View, Calif.

Pure expects to add 300 workers next year. The company’s website says it is hiring in Boston, New York, Dallas/Houston, London, Charlotte, Baton Rouge and other cities, seeking talent in sales, engineering, marketing and business development.

EMC claims several highly paid salesmen jumped ship for Pure and took customer records, confidential materials and other proprietary information with them. That violates the work agreements they signed at EMC, the company says.

The suit alleges that Pure Storage is “raiding EMC of its valuable employees, all in an effort to increase Pure Storage’s presence in the marketplace at the expense of EMC,” according to the Globe.

Such suits aren’t unheard of, though some states, such as California, make non-compete agreements hard to enforce.

“This can get really nasty,” said industry analyst Rob Enderle. “Years ago I had to bail a friend out of jail in the middle of the night because her employer, thinking she was planning to quit, filed felony [intellectual property theft] charges against her.”

“It’s certainly no surprise that a company sues its competitors when they poach highly prized employees,” said Deni Connor, founding analyst at Storage/Systems Strategies Now. “HP did it when EMC hired Mark Lewis away and EMC in turn did it when HP hired Dave Donatelli. It’s also not uncommon for a company to sue to protect their intellectual property, which in this case is what EMC did.”

Pure and EMC are competitors in the fast-growing flash-storage business. EMC is an established player, which this week reported $5.5 billion in third-quarter revenue, up about 5 percent over the same period in 2012.

Pure is a venture-backed startup that has raised $245 million, including a $150 million round in August. The four-year-old company is pre-IPO, giving it a strong inducement for attracting talent.

EMC is known as a hard-charging company where top salesmen might earn $500,000 per year. It said one of the employees it is suing earned $1.1 million over a four-year period.

In a statement, Pure denies the allegations. EMC did not respond to requests for comments, the Globe said.

Comments

  1. BY diane williams says:

    yep there is one thing some companies dont mess around with and that is their information. They will hunt you down and make your life miserable

  2. BY Clinton Staley says:

    That a departing employee must protect the prior employer’s confidentiality, and not steal IP in any way, goes without saying. That’s basic ethics, as well as a legal requirement.

    But, employers suing employees merely for leaving, or filing felony charges on the threat of departure, is perilously close to a 13th amendment civil rights violation. I’m sure the felony charge was an extreme case, and there was probably evidence of IP theft or no DA in his/her right mind would make such an arrest. But there’s also an underlying tendency for our society to view technical staff as resources, not free people. We need an appropriate balance that doesn’t make indentured servants out of engineers, and also doesn’t make employers vulnerable to IP theft.

  3. BY jelabarre says:

    Is it at all possible the employees left EMC because they were a crappy company to work for? Now, I have no knowlege of how EMC operates, or how they are as an employer. But I know of some other companies where large percentages of the workforce would be quite happy to jump ship given the opportunity.

  4. Well, I guess I’ll be adding EMC to the top of my “won’t work for” list of companies.

  5. BY Unca Alby says:

    Is there another player in this drama? I’d buy stocks in whatever company is not involved with lawsuits all over creation. Win or lose, legal expenses can kick a competitive company entirely out of the running, while enriching lawyers.

  6. BY Freecode says:

    Suing people because they leave is dead wrong and a loser. Then again, California is not known for level-headed thinking. Over-valuation on everything is rampant there. Suing someone who has stolen your ideas is one thing if they signed a non-compete and laws in State apply that allow you to do so. If you work where I work, well, you’re kind of stopped from that unless you prove that code was misappropriated and you can’t use litigation as a means of stealing other’s code either.

    This one sounds like petty bitching though. If the employees were happy where they were or were well-treated, they probably would not be leaving. Somebody got their knickers in a wad.

  7. BY Robert Harrison says:

    Paid your employee well and treat them like you should
    and this would not happen. It all boils down to
    Corporate greed. Also, EMC doesn’t’ want to have competition
    In the storage market that they once had a strong whole on.

  8. BY alan hawkins says:

    When I worked for AT&T, they had the idea that anything that an employee invented, software application he wrote, etc., on his own time that was unrelated to work belonged to them. Interesting exchanges took place via email between an employee in the intellectual property department and I occurred.

    The person just didn’t realize how untenable this position was. Finally, I said, if I invented a bar-b-cue sauce, would the recipe belong to AT&T?

    However, what really is ugly is that businesses got their lapdogs in the Georgia legislature to pass a law that a company has five years to come after you for ideas, inventions you come up with.

    Which is why I wouldn’t work for AT&T. On a unrelated matter, I once thought about working for the NSA but after what I read about the spying, I would never do IT security for the government.

  9. BY Moongloom says:

    Nobody may force another person to work for them. That is the basis for our “employment at will”. In the past I offered my employers the choice of a contract that binds us for a given number of years. Meaning: they do not get to let me go without very good reason and I don’t get to quit without very good reason. Not one employer accepted the deal. Fine then I get to quit when I feel like it. For any reason or none. But they don’t like that. They want to right to fire me when they feel like it but I have to work for them no matter what. That is typical response of companies. Free market is only good when it benefits them. Otherwise they run off to big daddy government for protect the big company against little employees. It is pathetic.

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