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Veeva Systems Files Suit to Fight Unfair Business Practices That Limit Employee Rights

PLEASANTON, Calif.--(BUSINESS WIRE)--Veeva Systems (NYSE: VEEV) today announced it filed a lawsuit in the superior court of California to stop companies’ widespread misuse of non-compete, confidentiality, and non-disparagement agreements that restrict employees’ basic rights. Clauses in these agreements can materially impact an employee’s ability to pursue new job opportunities. Veeva is taking legal action to address the increasing limitations companies are placing on employees. The case can set an important precedent in the enforcement of employment clauses that are illegal in states such as California.

Veeva takes stand, fights unfair business practices that limit employees' basic rights #NonCompete #OpenOpportunity

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The widespread use of non-competes impacts an estimated 30 million American workers, which reduces employees’ mobility and presents a potentially significant threat to innovation and economic growth, according to a national study co-authored by J.J. Prescott, University of Michigan law professor.1

“Employees, employers, and economies can all suffer as a result of non-competes,” said Prescott. “The negative effects on wages, mobility, and job satisfaction can be substantial. In many, if not all, circumstances there are better ways to protect trade secrets than non-competes, which often just limit fair competition.”

Veeva filed suit against three companies, Medidata, QuintilesIMS, and Sparta, for using illegal provisions in their employment agreements, including post-termination non-competes and overly broad confidentiality and non-disparagement clauses. All of these provisions make it harder, if not impossible, for employees to change jobs and provide services to California-based employers. The suit asserts that such agreements restrict fair competition and violate California law.

“Under the law in most states, companies essentially have the power to dictate where employees can work and keep them locked in jobs,” said Peter Gassner, Veeva founder and CEO. “We are taking action because people should have the fundamental right to use their skills and experience to advance their careers as they choose without the threat of being sued.”

In addition to limiting mobility, research...