Shabbat Parashat Bereishit 5773
P'ninat Mishpat: Friendly Buy-Out? – part II(condensed from Hemdat Mishpat, rulings of the Eretz Hemdah-Gazit Rabbinical Courts)
Case: The plaintiff (=pl) worked successfully for an Israeli hi-tech company (=IHTC). The owners of ITHC (=def), along with pl, started a similar company in
Ruling: [Last time we saw that pl cannot make def carry out the proposed agreement. This time we will discuss whether pl is allowed to compete with IHTC. Pl was familiar with the operation of IHTC from his work as an advisor for them before starting SCA.]
There are two possible grounds to forbid a former worker to compete with a former employer. One is based on an agreement between the sides to that effect. The Chatam Sofer (II:9) discusses someone who trained a shochet under the condition that the student would not work in the same region as his teacher. The Chatam Sofer says that competing would be in violation of the prohibition to withhold a worker’s pay. (We point out that the Chatam Sofer referred to a case where the teacher was the sole shochet in his area, so that competition would have had a strong, direct impact on his livelihood.) Rav Z.N. Goldberg (Techumin XVIII) points out that in the framework of a worker’s compensation, one can even obligate himself to not do something. [Ed. note- the dayanim apparently meant to extrapolate that similarly pl could obligate himself to not compete as part of his obligations in return for his salary.] However, in our case, there was no stipulation that pl not compete with IHTC.
However, there may also be an idea of not competing even without an agreement. Shevet Halevi (IV:220) says that workers who see secret practices or equipment which the employer used cannot copy them for use at a new employer or in his own work, and doing so is in the category of actual theft. This does not mean that one cannot compete with his former employers, just that he cannot use secret information obtained from them in competing.
This idea does not apply to using skills and information that the worker developed on the job at his former employers, as long as they are things that are generally available in the market, even if not everyone is privy to them. In our case, pl worked at IHTC years ago, and there are no indications that he possesses secret information from that time to get unfair advantage in competition with them now. In general, in
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