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Alcatel’s Anti-Startup Agitation

Light Reading
News Analysis
Light Reading
9/11/2000

Alcatel SA (NYSE: ALA) is trying a new tactic in its battle to prevent staff from leaving to join optical startups.

The company, which is already well known for its lawsuits against ex-employees who have sought greener pastures (see Alcatel Sues Former Employee), is now “educating” those employees who remain about the realities of working at startup companies.

Example: The July issue of “Voices,” an Alcatel employee publication, contains an article describing the cold, harsh reality of life outside the Alcatel fold.

It relates the sobering tale of an Alcatel employee who left for a startup. "The psychological pressure doesn't let up…Even when you are away from work you still feel unrelenting pressure,” he’s quoted as saying.

Eventually, this prodigal son returned to the Alcatel fold, but not for three years -- and at his old Alcatel salary. “I left a ton of money on the table [at the startup]," he confesses, "It just wasn’t worth it. The options didn’t offset what I lost in my personal life." Another example: one of Alcatel’s quarterly employee newsletters, dated June 1, helpfully informs “Movers and Shakers” at the company about a recent spate of legal actions against employees leaving to join startups. It explains that these actions have been based on the principal of "inevitable disclosure" -- a doctrine that assumes that employees leaving one company to take up a similar position at another will inevitably reveal trade secrets carried with them "in his/her brain, as opposed to his/her briefcase."

“Companies now have a new legal method to stop the flow of valuable trade secrets to their competitors,” the bulletin cheerfully points out. “Any employee that receives training for a particular product that a company develops and produces will be affected by this rule of law."

Alcatel says it's simply trying to protect its interests, and those of its shareholders. "As an employer, Alcatel believes that people should have the right to work wherever they want. The only exception is when someone leaves to go work for a direct competitor on a directly competitive product where they will inevitably reveal trade secrets," says a spokesperson.

"It’s up to Alcatel to protect its trade secrets. No one else is going to do that for us, and if they are stolen it will hurt our shareholders," the spokesperson adds.

Alcatel is reportedly not the only vendor taking steps to limit its staff losses. According to an anonymous source at an optical networking startup, Cisco’s internal intranet contains a “Top Ten” list of reasons not to leave and join a startup. (Cisco has denied the existence of such a list.)

The no.1 reason? “You might be acquired by Alcatel.”

-- Phil Harvey, senior editor, and Stephen Saunders, US editor, Light Reading http://www.lightreading.com

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