Electronic Arts, UbiSoft Feud Continues

[fitbabits]

Thanks to Gamasutra (http://www.gamasutra.com) for the details (http://www.gamasutra.com/php-bin/news_index.php?story=7985).

A long-running conflict between the Montreal studios of major publishers Electronic Arts and Ubisoft over non-compete clauses for departing Ubisoft game development employees has again flared to life, following the hiring of an unnamed former Ubisoft employee to work at EA's Montreal studio.

Electronic Arts representatives have provided Gamasutra with a copy of a letter sent by EA Montreal head Alain Tascan to Ubisoft Montreal head Martin Tremblay accompanying the news of the hiring, despite a one year non-compete agreement signed by that employee when working at Ubisoft, and which asks Ubisoft to "stop the illegitimate practice of forcing talented people to sign employment contracts that restrict their creative and economic freedom."

The controversy last came to a head in late 2003, with a Canadian court case brought by Ubisoft against EA for hiring away four major Spinter Cell developers to work at the (at that time newly formed) Electronic Arts Montreal. In that case, Ubisoft won an interim injunction preventing the employees from working at EA within a specified length of time after leaving, and an Ubisoft spokesperson commented to Reuters at the time: "It's pretty much what we expected that the Quebec Court of Appeal would say, that the 'non-compete' clause is reasonable... It's standard in the industry, in Montreal and in Canada."

However, EA's Tascan and the company's management are obviously keen to revisit this ruling, commenting to Ubisoft in its letter: "As you know, the judgment of the Court of Appeal in our last dispute was on an interim basis only and did not decide this issue on the merits. We therefore do not consider it as the final word on this matter."
Continues (http://www.gamasutra.com/php-bin/news_index.php?story=7985) - Please read fully before replying.

I smell a very hostile takeover brewing. Or a messy marriage.

[Deadend]

Wow, normally I am a EA hater, but they are right on this. The non-compete clause seems like a strong-arm tactic.

The fact the companies also get govenment subsidies is intersting, I wonder how much EA gets?

[rickmus]

Hostile Takeover? Did I read the wrong article or what?

[Citizen Philip]

Welcome to Canada, non-competion clauses are almost standard for most fields: and usually no one bothers enforcing them: except maybe when you are rivals and trying to steal one another's employees.

AFAIK most goverments subsidize different industries with tax cuts and other benefits, just because EA doesn't like it (and perhaps since they are not a Canadian company and do not benefit) doesn't mean anyone should care.

[fitbabits]

Hostile Takeover? Did I read the wrong article or what?
I don't know - did you?

EA have been after UbiSoft for a long time. I think they're creating a fuss now so that they can try to strongarm them into selling. Or something. :rolleyes:

[dotbomb]

In the US companies can only protect trade secret type info with non-compete agreements.

Not certain about Canada but I'd doubt it is different.

QUESTION: Why should our company have non-competition agreements with employees? If necessary, what would the policy look like; Who should be covered, what should the agreement contain?

ANSWER: Non-competition and non-disclosure agreements are popular tools used by many companies to retain knowledge and discourage the departure of employees. For many start-up and technology-based firms, the secrets these agreements help protect are among the most valuable assets they have.

Information that can be protected by an agreement include: trade secrets, employee data, customer lists, proprietary processes and corporate business plans. In the absence of non-compete or non-disclosure agreements, departing employees are basically free to compete against their former employer. Although some states do have laws that prohibit the disclosure of company secrets, enforcement and legal recourse can be challenging without an agreement.

A company should have a legitimate reason to require an agreement. Restricting an employee's ability to compete, earn a livelihood, or apply the skills and knowledge acquired during the course of employment without substantiation is unreasonable.


So it really depends what this employee had access to.

[dotbomb]

Welcome to Canada, non-competion clauses are almost standard for most fields: and usually no one bothers enforcing them: except maybe when you are rivals and trying to steal one another's employees.

Actually US corporations do this too. I refused to sign the non-compete at my former employer as it would have prevented me from doing exactly what it is I do today.

The thing is corporations do this to bully their employees. The more sheep like you become as a worker drone the better it is for the corporate machine.

[YoungAlCapone]

The thing is corporations do this to bully their employees. The more sheep like you become as a worker drone the better it is for the corporate machine.

That is what I am hearing. I have supported Ubisoft in thier battle against EA, at least as far as saying "go Ubisoft, fuck EA" goes. However, this non-compete contract just sounds like a way to limit the individuals from deciding for themselves which project would be best for them.

[Derella]

Richard Garriott had to sign a 1 year non-compete agreement when he left EA.

[aversion2k]

I don't know - did you?

EA have been after UbiSoft for a long time. I think they're creating a fuss now so that they can try to strongarm them into selling. Or something. :rolleyes:

But its Ubisoft whos causing the fuss not EA.
I dont think this has anything to do with a takeover.
Its pretty cruel of Ubisoft to do that though, but most people would sign the contract regardless. I know I would

Richard Garriott had to sign a 1 year non-compete agreement when he left EA.

He had to sign it when he left? or when he started?
"I quit"
"Ok sure, but first sign this contract saying you cant get another job"
"Sure thing"

[Loganrapp]

My only question: "And if EA were doing the non-compete contracts...?"

I am really, really pissed at UbiSoft right now. Anytime someone makes me side with EA, I kick them in the nuts.

[Klade]

Non-compete agreements are used pretty widely in the US and enforced here as well. Personally I hate them and the courts supposedly "frown" on them but often enforce them when the person involved could do another trade (essentially any time they are educated). And the time frame involved is not unreasonable (typically a few years).

That being said some states have done away with them. California for instance won't uphold non-compete agreements when they relate to technology fields. The courts decided this on their own and to my knowledge there is no statute on the matter. If this guy went to work in EA's California branch this would not be an issue.

[Speed_D]

My current employer tries to have new employees sign a non-compete upon hire. When they made me an offer, I looked it over and told them I was happy to sign a non-disclosure agreement. I also told them I would sign their non-compete if it expired at the same time my employment ends, rather than a year later or whatever it was.

They said they'd have to talk with their legal people. Got back to me in a couple days with a non-compete agreement altered the way I wanted it, and hired me. So basically I can't moonlight with another company in the same industry (like I WANT to work more hours? hah).

Moral of the story: read the fine print. Speak up if you don't agree with something and stick up for yourself. Most companies can be flexible -- they are just used to people signing these contracts without even reading them.

If more employees would do this, the non-competes would go away.

[Royal Fool]

I think these contracts are almost always signed when people are hired, like aversion2k said it's hard to force people to sign them when they're quitting, unless the employer somehow has leverage like post-employment benefits. I dunno.

That said, I think these sorts of deals are a very dirty business method, even if they're apparently standard in many industries.

EA's statement presumably gives Ubi Soft the opportunity to mount a similar challenge to 2003's legal tussle, should the company wish, although the latter firm has not yet made a formal statement on the matter. For its part, EA makes it clear that it "shall continue to require that its employees sign a declaration stating that they shall not use any material or documents of a former employer", a move that it clearly feels is acceptable and sufficient in a locality which has only a limited amount of major development firms.
Does that mean that artists aren't allowed to feature their own work in their portfolios if the artwork was created while being employed by EA?

[danhoo]

Does that mean that artists aren't allowed to feature their own work in their portfolios if the artwork was created while being employed by EA?

Yep. EA technically 'owns' the rights to whatever you create for them. Many other companies do this. However, generally speaking, most companies aren't going to waste their valuable lawyers on a starving game artist who snuck in a few bits from work on his/her demo tape.

[MaiXu]

The article described Montreal (and, more broadly, Quebec), as a "locality which has only a limited amount of major development firms." And yet EA claims that "Ubi Soft is one of the few companies in the Quebec game industry that forces its employees to sign non-compete clauses." So who are the other big players in the Quebec software industry? Mmmmaybe ... EA?!

I'll actually side with EA on this one if we could clear a few things up.

1.) According to Wikipedia, EA opened EA Montreal in August 2003. What have they been doing since then, besides stealing UbiSoft employees? To be blunt, has EA been doing a legitimate and fair-spirited attempt to develop software in Montreal, or did they simply set up shop next door to lure away talented members of the Splinter Cell team?

2.) What do EA's contracts look like? To be blunt (again), do *they* ask employees to sign NCAs?

[mister_slim]

I love this:
In the spirit of creative freedom, economic emancipation and workers’ rights, EA has in fact accepted the application of an employee who had been working at Ubi Soft... Using government money to lock talent into contracts that prohibit them from moving to new projects is an affront to creative freedom, limits consumer choice and stifles the growth of the multi-media industry in Quebec.
I do have to admit though, EA's lawyers are pretty sharp.

[Atepsflame]

I do have to admit though, EA's lawyers are pretty sharp.

Well, at least EA has that going for them...

[doyama]

Generally speaking such clauses in contracts are almost impossible to enforce. Though there have been some fairly high profile cases recently, such as the MS Google case. In order to enforce such a contract it would have to be very very specific about what you couldn't do. So if it says you can't work for any compeditor, that clearly too restrictive! But it might say something like, you can't work for a compeditor on a fantasy based MMORPG, in which case that might be enforceable as you would still be able to find work in other games or fields.

This kind of corporate espionage of sorts is fairly common, plucking up key individuals from big studios gives you their knowledge as well as really screwing up the competition.

[handsalad]

I had to sign a non-compete with the game company I work at. It says that I can not do the same job with in 50 miles of our offices with in a year after I leave. Harsh but I totally see the point. I have a friend in the industry that signed a non-compete with a smaller game studio and left and went to work for a much larger one in the same city. The small game company chose to fine that person. The larger game company paid the fine for them.

[dotbomb]

Richard Garriott had to sign a 1 year non-compete agreement when he left EA.

Big difference between founders of a company/owners and regular employees.

I would fully expect a guy like Garriott to have to sign a non compete as part of the deal to sell his company. But I would not expect Garriott's regular salaried employees to have to sign one.

[51|RandoM]

I don't sign them unless the company adds severance pay to the compensation package for the period of non-competition. Can't work for anybody else six months after I leave your company? Well then, you're paying my salary that six months, thank you very much.

It is fairly stupid for a company to expect me to not work in exactly the same industry, in the same geography, and quite often with many of the same customers after I leave their employ. Hell, I've been doing what I do, in this area, for more years than most of the companies I contract with have existed.

They're supposedly not really enforceable in NY, but you still have to go through some of the court hassles if somebody really wants to push the issue.

[fitbabits]

I don't sign them unless the company adds severance pay to the compensation package for the period of non-competition. Can't work for anybody else six months after I leave your company? Well then, you're paying my salary that six months, thank you very much.
Excellent strategy! :)