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Comment by sk55

2 years ago

Isn't no poach illegal?

Not this sort, as far as I'm aware. The variety where you collude with competitors can be under some legal systems.

The point is to discourage market distortion. Some jurisdictions also make employee contract conditions of a similar nature illegal too, as they interfere with personal freedoms.

A lot of business deals though specifically include clauses to prevent one partner from poaching the other's staff, as otherwise one side could do what appears to be happening here: Unilaterally taking over the entire business.

  • The current situation probably falls under Force Majeure, though. If most of these people go to Google or Amazon, Microsoft may not be able to deliver the products they depend(ed) on OpenAI for.

    Also, in most jurisdictions, no poaching agreements are unenforcable if the employees themselves initiate the transfer. Signing that letter about leaving if Sam is not coming back probably qualifies as a resignation notice.

    On top of this, most other AI leaders have already stated that they want OpenAI employees to come to them.

    • This is quite literally the CTO of Microsoft saying: "Know that if needed, you have a role at Microsoft that matches your compensation and advances our collective mission." I don't think there is a reasonable argument where this is not poaching.

      I have all the sympathy with OpenAI employees signing the letter and looking for new jobs.

      However, MSFT is basically doing a cheap de-facto acquisition of OpenAI, a company they have invested in. This sets a terrible precedent for companies taking investment from strategic investors where they may stage an opportunistic de-facto acquisition at the sign of any trouble.

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Federally, there is precedent that collaborative projects can be an exception to the general federal prohibition of no poach agreements. Whether that would work on California law (IIRC, the federal prohibition is an application of antitrust law, the California one is a labor protection), and whether the other aspects of the Microsoft-OpenAI agreement would fit in the exception, I don't know.

  • Yeah, and the California code applies to employees in California, which at least most OAI employees are, so it should be irrelevant that MSFT is in Washington.

    Given the relationship between the two, and the context of the matter, I don't expect no-poach agreements to hold much weight here.

Yes. And particularly in California.

  • I'm not sure why you are being downvoted, maybe because they aren't illegal in California, but in California, afaict, according to California Business and Professions Code Section 16600, the same code that prevents non-competes, such contracts would be considered void.