BUSINESS BLOGS
BUSINESS BLOGS
category: business
24 Apr 2009

AllFacebook asks: did Van Natta not have a (hey it rhymes!) non-compete?

Today MySpace has annoucned that Owen Van Natta, the ex-Chief Operating Officer of Facebook has been appointed the role of MySpace Chief Executive Officer. It’s approximately a year and two months after leaving Facebook and one has to wonder, did Owen Van Natta have a non-compete? He clearly has substantial competitive intelligence and while he may not know the latest information from inside Facebook, he at the least has deep insight into the way the organization functions. The announcement comes as no surprise given that MySpace has been leaking the information for the past few days, but now that it’s confirmed it will be interesting to see what comes of this. MySpace would most likely not hire Van Natta if they expected a costly legal battle with Facebook. At this point it appears to settle many old scores as Mike Arrington writes.

Non-compete’s are not really enforcable in California, for one, however, they cover three things:

- term
- scope
- location.

Incidentally, I got sued by MySpace’s parent News Corp., who bought IGN, the company that bought my old company.  I won… so I will repay them the favor now and say that if Facebook is thinking of suing MySpace, they should not bother.

Yes, for sure, the scope would make MySpace competitive with Facebook, as would location.

However, if Van Natta has been away from Facebook for 2 and a half years, then chances are that the term has expired, and frankly, if it hasn’t (ie. if the non-compete lasted for say three years) then jurisprudence would suggest that that would be too long for a Web business.

Now Facebook could argue and counter that Van Natta was too important of an executive to be allowed a shorter term, granted, so if they were hiring me for advice on how to win in a potential lawsuit, I would argue that if it is true that Van Natta was passed up for the CEO/COO role in favor of Sheryl Sandberg and as a result Van Natta’s responsibilities changed or shifted, then he was a victim of constructive dismissal.

To get more info on non-competes, read this.