Google, Microsoft case over Lee stalls in California
A federal judge in San Jose, Calif., granted Microsoft's motion to stay a countersuit filed by Google in the dispute over the search giant's hiring of Kai-Fu Lee.
According to Chris Scott Graham, an attorney with the law firm Dechert LLP, Judge Ronald Whyte of the U.S. District Court for the Northern District of California said, "I'm going to put this on hold."
Graham said that, while Google could petition to lift the stay, courts are reluctant to have the same dispute being heard at same time in multiple forums. "Judge Whyte has said in his order that it's appropriate to allow the matter to proceed in Washington before he continues on to address the matter on the merits," he said.
Microsoft spokesman Jack Evans said, "We're pleased with Judge Whyte's decision because it means that our case against Dr. Lee will proceed in Washington on its current schedule in January."
Google executives were not immediately available for comment.
The ruling by Judge Whyte means that Microsoft's lawsuit against Lee and Google in Washington State Court will likely provide the definitive ruling.
Graham said the ruling leaves the door open for Google's countersuit to proceed in California if there are any issues that aren't decided in Washington, for example, if that suit were dismissed.
California state law bars most non-compete contract provisions, because they're seen as interfering with an individual's ability to engage in lawful work.
One of the issues in Microsoft's suit against Lee and Google in Washington State Court is whether the laws of California or Washington should apply, according to Robin Meadow, a partner in the law firm of Greines, Martin, Stein & Richland.
"Google and Lee can ask the Washington court to apply California law," he said, "and if the court does so, it's just like having a trial in California."
The Washington court could decide that the California policy is so strong that it trumps Washington law, but Meadow said that's not likely.
"For Google to litigate this in Washington is to lose that issue, which is why they wanted to try the case in California," he said.
As the result of a September ruling in Washington, Lee already is working for Google on opening an R&D facility in China, but he is barred from recruiting any Microsoft employees.
Microsoft's speedy timing meant a lot in this case, said Meadow. (Microsoft reportedly slapped Lee with the suit instead of shaking hands when he gave notice.)
"By getting into court first, Microsoft gave itself an advantage that is very hard to overcome," Meadows continued.
Microsoft's suit in Washington State Court has progressed quite a bit, and judges try to avoid duplication of effort. "Microsoft is definitely on the winning track on this."