Recruiting in China

By Jim Hedger - July 26, 2005

Back in the good old days, headhunters never got sued. If a lawyer went nuts on you, there was always a good shrink available. Being a headhunter meant never having to say you were sorry. Corporate law has evolved substantially since then.

Today, Google is getting sued for headhunting one of the brightest techno-brains in China , Dr. Kai-Fu Lee. Actually, Dr. Lee was in Redmond Washington, working for Microsoft when the deal went down and Microsoft is pretty angry about it all.

In a press release issued last Tuesday, Google reported it had hired one of China 's most respected computer pioneers, Dr. Kai-Fu Lee. Problem is, until Monday afternoon anyway, Dr. Lee was the corporate VP of Microsoft's Interactive Services Division. That got Gate's goat, big time.

Hours before Google issued the press release, Microsoft issued suit in a Washington State court against Dr. Lee and his new employer, citing breach of contract. They are seeking an injunction to prevent Dr. Lee from taking his new position as head of Google's China Division.

"Accepting such a position with a direct Microsoft competitor like Google violates the narrow non-competition promise Lee made when he was hired as an executive," Microsoft said in its lawsuit, as quoted in a ZDnet report . "Google is fully aware of Lee's promises to Microsoft, but has chosen to ignore them, and has encouraged Lee to violate them."

The suit seeks monetary damages for the loss of Dr. Lee's services as well as injunctive measures to prevent Dr. Lee from violating a narrowly worded non-competition agreement or sharing information Microsoft claims as its intellectual property. The lawsuit states that Dr. Lee was for some time, "responsible for overall development of the MSN Internet search application."

Calling Dr. Lee's move a "particularly egregious" violation of a non-competition agreement that was part of his contract with Microsoft, Deputy General Counsel, Tom Burt said Dr. Lee "...has access to sensitive information, to trade secrets about our search technology and business plans and our China business strategies."

Google is planning to open a massive Research and Development Centre in China by the end of October. With decades of investment in science and engineering, and many of the world's top technical universities, China is seen by most in the industry to be the leading IT nation in the near future. It also has an economy developing at 9% or more per year, three times faster than most G8 economies.

The press release noted these factors stating, "China , with its thriving economy and excellent universities, is home to many outstanding computer scientists and engineers. By establishing an R&D center in China, Google is making a strong commitment to attracting and developing Chinese talent, as well as partnering with local universities and institutes. The selection of Dr. Kai-Fu Lee to lead this important operation underscores Google's commitment to building a successful Chinese product research and development center and to expanding its international business operations."

Google VP of Engineering, Alan Eustace said, "The opening of an R&D center in China will strengthen Google's efforts in delivering the best search experience to our users and partners worldwide. Under the leadership of Dr. Lee, with his proven track record of innovation and his passion for technology and research, the Google China R&D center will enable us to develop more innovative products and technologies for millions of users in China and around the world."

As for Dr. Lee himself, apparently he informed his boss at Microsoft on July 5th that he wasn't coming back from a sabbatical he had planned and that he was in discussions with Google about China. In the press release, Google spokespersons quoted Dr. Lee saying, "It has always been my goal to make advanced technologies accessible and useful to every user, as well as to be part of the vibrant growth and innovation in China today. Joining Google uniquely enables me to pursue both of my passions and I look forward to returning to China to begin this exciting endeavor."

This is bound to get more interesting as time develops.

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