EA to Ubisoft: Shape Up

Alain Tascan, general manager of EA Montreal, sent an open letter to Ubisoft Montreal head Martin Tremblay yesterday, sharply criticizing Ubisoft's business practices in the two studios' shared home of Montreal. Tascan, on behalf of EA, takes issue with Ubisoft Montreal's use of non-compete clauses in their employment contacts, which stipulate that upon leaving Ubisoft Montreal, developers must wait one year before working elsewhere in the games industry. Ubisoft states that this is to ensure that sensitive information about development is not passed on to competitors, but EA claims that using a non-compete clause rather than simply a confidentiality or loyalty agreement is not only unnecessary, but fundamentally damaging to the game development community of Quebec.
The non-compete covenant that Ubisoft requires its employees sign greatly surpass the legitimate interests it may have in respect to confidentiality. Their only purpose is to seek to enclose within Ubisoft the talent, creativity and imagination of its employees, which is improper. The restrictive covenants that Ubisoft obligates its employees to sign force those who no longer wish to pursue their career at Ubisoft to put a hold on their career for one year which in our industry, as you know, is tantamount ending his/her career.

Moreover, the restrictive covenants Ubisoft forces its employees to sign are contrary to spirit of the salary grants and employment incentives that Quebec offers to our industry. Ubisoft receives grants from the Quebec government representing 50 percent of the wages of its employees whereas grants provided to other developers are only equivalent to about 37 percent.

In our view, it is not legitimate for Ubisoft to seek to benefit from important government grants, the object of which is the development and growth of the video game industry in Quebec, while at the same time, Ubisoft paralyzes the local development community.

Mr. Tascan further reinforces his point by noting that Ubisoft receives regional government grants for the purposes of fostering game development in Quebec. The result of Ubisoft's practices, it would seem, is that the company is fostering game development at Ubisoft Montreal exclusively, rather than throughout the province of Quebec.

The specific impetus for Mr. Tascan's sharp rebuke is that EA Montreal yesterday hired an artist, formerly of Ubisoft Montreal, before the expiration of his non-compete clause. The two companies have been involved in a similar coflict before: in 2003, EA Montreal hired five former Ubisoft Montreal staffers, after which Ubisoft brought the matter to court. As Mr. Tascan notes in the letter, the courts never decisively ruled on the matter, so EA remains prepared to defend its decision. The prior proceedings ended up in a stalemate such that the staffers did not end up working for EA for a year one way or the other.

For Ubisoft's part, it claims that it enforces its non-compete clause only in certain necessary cases. Apparently, the only time it has been invoked is in that 2003 case. It seems probable, however, that the company will take action against EA for this incident, particularly since the courts failed to establish a precedent in 2003.

This conflict comes only 14 months after the infamous ea_spouse online journal post that put EA under the spotlight for alleged poor treatment of employees and failure to provide overtime pay. Despite this, Mr. Tascan seems to have a legitimate point against Ubisoft's practices; in an industry where technology evolves significantly at a breakneck pace, a mandatory year-long break from production after leaving a studio can be anything from an inconvenience to a huge setback for developers. However, Ubisoft seems to have no plans to alter its policy any time soon, so it's likely we will see the final resolution play out in the courts.