The Michael Scott Paper Company

March 27, 2009 - by: Troy Foster 9 COMMENTS

Litigation Value: $100,000 * and possibly a permanent injunction

On the “Two Weeks” episode of The Office, Michael decided that since he was leaving Dunder Mifflin, he would start his own company, the Michael Scott Paper Company. This raises a lot of issues about what’s going to happen to the Scranton gang without their fearless leader -– and about unfair and unlawful competition.

The good news is that for once, we’re not talking about how much Dunder Mifflin might have to pay in court. Instead, we can talk about what the company might receive in court.

There are a couple of different ways this could play out. If Michael signed an agreement with the company promising not to compete with it or solicit its clients, he could be in big trouble. Valid noncompetition and nonsolicitation agreements provide great protection for employers. Opening up a competing business in town could be a problem. Plus, Michael certainly seemed ready to steal Dunder Mifflin clients to get his business started. So, if Dunder Mifflin made him sign such an agreement, Michael might be in trouble. The company could stop him from going through with his idea and would be in line to finally collect some money in court -– let’s estimate $100,000, even though putting a number on that kind of thing is really difficult since this is just beginning.

If Michael didn’t sign an agreement like that, it’s a little trickier. Generally, individuals can compete with their former employers, as long as they don’t use any trade secrets to do so. Michael talked about using Dunder Mifflin’s price points -– that is potentially the beginning of such a claim. Of course, I’m skeptical that Michael would be able to pull off anything that complicated, so it’s too early to tell what might happen in this situation.

Maybe we’ll see this unfold over the next few weeks. Maybe Michael and Pam will make it on their own like Jerry Maguire, Dorothy Boyd, and that goldfish did.  Or maybe not.  Stay tuned!

Bookmark and Share Send to a Colleague

9 COMMENTS

1 Chris
13:52:14, 27/03/09

The company I work for has a non-compete and you would think after Josh Porter left, Dunder Mifflin would have adopted the policy, if they hadn’t already. Everyone seemed to be in a mood of desperation after that move and did not give Josh any threats of litigation on screen anyway.

Pam is in a rough spot and I don’t see how she could get anywhere with a company run by Michael unless she is essentially running everything for him. It is possible, if the company at least gets started, she could get some sales experience on her resume and come back to Dunder Mifflin in a sales position. Of course that depends on how they treat her departure and what clients of Michael’s she would be able to bring back. Assuming Michael is successful in stealing any. This would be a little more cutthroat than I generally think Pam would go, but who knows.

2 Jeff Cordaire
03:08:47, 28/03/09

Is this site serious? I hope you realize the office isn’t real…

3 Mindy
22:07:40, 28/03/09

Actually, non competition contracts are not “worth the paper they’re written on”, pardon the pun. Judges will rule that people have the right to make a living and rule on the side of the contract signer, or the employee. Michael was not an officer of the company, nor an owner, so he’d be pretty safe if taken to court. :)

BTW, I adore this show. I haven’t loved a television show this much since Taxi.

4 Jim Halberg
10:41:38, 29/03/09

The Office isn’t real? I thought it was a documentary???

…These posts keep me motivated to watch the actual show – might be time to look for a little kickback!

5 Joe
09:38:54, 31/03/09

Well, since I haven’t heard talk of Steve Carrell leaving “The Office” I’m thinking Dunder Mifflin may at some point fire the new VP (who has zero personal skills) and welcome Michael Scott back with open arms.

6 Troy Foster
15:00:51, 31/03/09

Mindy raises a good point. While it is true that non competition agreements aren’t viewed favorably by courts, a well-written agreement that complies with state requirements and limitations can be very effective in protecting a business. Michael was the manager of his branch, which is an important position, and so long as the agreement meets state requirements, the agreement would be valid. Dunder Mifflin couldn’t enforce an agreement in which Michael agrees not to work anywhere in Scranton, or where he agrees not to be an owner/manager for a paper company in the entire state of Pennsylvania, but Dunder Mifflin and their crack team of lawyers would never do something so overreaching.

Then again, these are the same lawyers (presumably) that read Michael’s diary in a deposition, so who knows.

In addition to a legal effect, there is a practical one too. If you have a good non-compete, many times departing employees won’t even try to push it – because they don’t have the time, energy, or resources. Or in Michael’s case, sophistication. More on that in this week’s blog….

7 D.R.
17:15:07, 31/03/09

Jeff Cordaire = Dwight Schrute???

8 Chance Utley
01:01:19, 03/04/09

Mindy is right. I’ve signed at least 10 Non-competes and I snicker each time I do it.

Why? Because the first time I signed one, I took it way too seriously. And my boss knew I was just out of school and took advantage of the fact that I thought that the non-compete completely locked me out of working in that industry somewhere else. So he could make any unreasonable demand he wanted. And he did.

So I got an offer from a competitor and told their HR guy about my non-compete and that I’d have to decline. The HR guy laughed so hard, he nearly passed out. Then he called in the company attorney and they both had another hearty laugh together.

It came down to this, companies can’t reasonably have it both ways. These days companies lay off workers in a panic if the Dow drops 3 points with no warning required. They can’t then expect you won’t go to work for a competitor. That’s interference with your ability to earn a living.

I went to work for the new company and the attorney invited me to sit in court to see a case where a company was suing for violation of non-compete. The judge, very conservative politically, nearly killed the lawyers bringing the suit. It went almost exacly like this: “Let me get this straight. You let an experienced employee go as a cost-saving measure and now you are upset that he went to work in the same field? And you have no evidence that he took or used anything uniquely yours? You want injunctive relief? Case dismissed with prejudice. You pay the fees. Next case.”

Now in this episode, Michael quit but the camera documentary clearly captures he did not quit with the intention to compete. On the other hand, he tried (did he succeed?) to take proprietary customer lists and forms. So this is kind of a wash. Michael does poorly in legal proceedings, so he’d lose but for the wrong reasons.

9 Dirty LAWndry
18:10:31, 04/04/09

I agree with Chance. Non-compete clauses are a joke.

Leave a Reply