Doesn't Marissa Mayer Have A Non-Compete???

Yahoo! recently named longtime Google executive, Marissa Mayer, as its new CEO. Since the announcement, Twitter has been aflutter with comments about how this could happen. One Tweeter remarked: "Whoa. Either Marissa Mayer didn't have a non-compete or no one at Google thinks Yahoo qualifies as competition." Another tweet speculates that she must have at least signed a confidentiality agreement.

These Tweeters are not alone in their curiosity. Over the past twenty-four hours I have been asked many questions by friends and family alike about this move. Here's my take.

Didn't she have a non-compete? Probably not. Of course, I can't say for sure as I am not privy to her employment arrangements with Google, but my strong guess is that she does not have a non-compete that facially forbids her from accepting employment with a competitor. Such an agreement would be unenforceable in California where section 16600 of the Business and Professions Code prohibits non-compete agreements, except in limited circumstances that do not apply here. That being said, she most likely executed some sort of confidentiality agreement along the way, and she has a statutory obligation not to misappropriate Google's trade secrets. (For more on the difference between non-competes, confidentiality agreements, and trade secrets, click here).

Can Google stop her from going to Yahoo!? That's a tough one. The odds makers in Vegas would surely bet against it for multiple reasons. As noted above, Mayer likely does not have a non-compete agreement, and if she does, it likely runs afoul of California law. Moreover, California courts have unequivocally rejected the inevitable disclosure doctrine, a judicial doctrine by which courts will stop an ex-employee from working for a competitor if the employee's new job will inevitably lead to the disclosure of the former employer's trade secrets. See Whyte v. Schlage Lock Company, 101 Cal.App.4th 1443 (2002). If you ask Google, I am sure they believe that Mayer cannot possibly assume her new role at Yahoo! without inevitably drawing upon her knowledge of Google's trade secrets. Hewlett-Packard surely felt this way when its former CEO Mark Hurd left to assume control at Oracle.

Despite California's rejection of the inevitable disclosure doctrine, a careful read of California case law suggests the issue may not be as clear cut as it seems. In Whyte v. Schlage, the court emphasized that it was considering (and rejecting) the inevitable...