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Former IBM Exec Ordered To Stop Working For Apple
Posted by
ScuttleMonkey
on Mon Nov 10, 2008 07:06 PM
from the petty-jealousy dept.
from the petty-jealousy dept.
tom_guyette writes "ComputerWorld reports a federal judge has ordered former IBM executive Mark Papermaster, recently hired as Apple's vice president of hardware devices engineering, to stop working for Apple. The judge's ruling is based on a motion for preliminary injunction made by IBM, which states Papermaster's new job violates a non-compete agreement he signed in 2006. In response, Papermaster asserted to the court that 'Nothing about his new job will implicate any trade secrets from IBM.'"
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News: Non-Compete Clauses Thrown Out In California 375 comments
drfuchs writes "If you signed an employment agreement in California, any non-compete clause in it is null & (void*), says the state Supreme Court of California (ruling PDF). Better still, the San Francisco Chronicle opines that the US Federal courts are likely to fall in line with the decision in the way they interpret California law. (Most other states still have non-compete laws on the books and it's not clear this ruling will affect them.) Turns out it wasn't a high-tech case at all, but a CPA who had worked for the accounting firm Arthur Anderson (now disgraced due to their complicity in the Enron case)."
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Hardware: Apple Plans To Make Chips For Handhelds 154 comments
Preedit writes "Apple plans to get into the business of designing microprocessors for handheld devices, according to legal papers that are part of a dispute between IBM and one of its top technology executives. IBM is suing Power chip expert Mark Papermaster for allegedly violating a non-compete agreement and accepting a job at Apple. In court papers, IBM claims Apple wants Papermaster 'to design microprocessors for incorporation in a variety of electronic devices, including handheld devices.' The suit, according to Infoweek, also notes that Apple earlier this year bought out P.A. Semi. IBM thinks it knows why."
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states rights! (Score:5, Insightful)
Re:states rights! (Score:5, Informative)
I could've sworn IBM was in New York.
The US Constitution explictly states one state cannot discharge your contractual obligations made legally in another state.
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Re:states rights! (Score:5, Informative)
I could've sworn the matter hasn't actually been decided by a court. From wikipedia:
"The preeminent court decision discussing the conflict between California law and the laws of other states is Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881 (1998). In Hunter, a Maryland company required that its Maryland based employee agree to a one-year non-compete agreement. The contract stated that it was governed by and to be construed according to Maryland law. A Maryland employee then left to work for a competitor in California. When the new California employer sued in California state court to invalidate the covenant not to compete, the California court agreed and ruled that the non-compete provision was invalid and not enforceable in California. Business and Professions Code Section 16600 reflects a "strong public policy of the State of California" and the state has a strong interest in applying its law and protecting its businesses so that they can hire the employees of their choosing. California law is thus applicable to non-California employees seeking employment in California.
Whether California courts are required by the full faith and credit clause of the United States Constitution to enforce equitable judgments from courts of other states, having personal jurisdiction over the defendant, that enjoin competition or are contrary to important public interests in California is an issue that has not yet been decided."
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Re:states rights! (Score:5, Insightful)
Either way it doesn't matter. This was a federal court, not state.
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Lame response (Score:5, Insightful)
He signed the non-compete. *HE* gave away his freedom. Not the State.
The State is just going to hold him to HIS word.
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Re:Lame response (Score:5, Insightful)
He signed the non-compete. *HE* gave away his freedom. Not the State.
The State is just going to hold him to HIS word.
non-competes represent collusion within various industries in a conspiracy to remove employees' civil liberties and subject them to increased risk of improper compensation.
"industry standard" = collusion, plain and simple.
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Re:Lame response (Score:5, Insightful)
If it's that big of a deal to you then don't sign it. I've known several programmers that confronted management about the non-compete and didn't have to sign. However, non-competes make a ton of sense FOR THE EMPLOYER, at least the narrower ones which specify that you can't go to a company in direct competition with your current one. For tech jobs, knowledge is everything, and knowledge doesn't just disappear overnight. If a senior programmer where I currently work were to jump to a competitor, it would be worth millions of dollars if they could pick his brain about techniques, abilities, and which customers were dissatisfied.
There, fixed that for you. If the employee is worth that much, employers should treat them well, compensate them appropriately and make them feel appreciated. There are already laws about trade secrets; a non-compete agreement is just a control mechanism which, when enforceable, gives great leverage to the employer and none to the employee.
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Re:Lame response (Score:5, Insightful)
Not if they want to work for me. If you don't like non-competes, don't work somewhere that requires you to sign one. Capitalism is about making trade-offs.
Capitalism is about competition. Non-compete clauses are the very opposite of competition. If you don't want your employees to work elsewhere, maybe you should pay them more? Or suck it up and accept that you're going to have to compete against him at some point in the future.
You have no right, no right, over the lives of your employees. That's another thing about Capitalism--it's supposed to be about freedom.
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Re:Lame response (Score:5, Interesting)
But...but... but.. What about my freedom to tell people lies and break my word?!
You always have that freedom. You just aren't guaranteed to always get away with it.
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Re:Lame response (Score:5, Informative)
So in this case, who is lying? The person who signs an unenforceable document because it's a formality which is required in order to get hired, or the company which requires it and can only use it for intimidation because they know if their employee had the resources to fight it, they would lose?
Couple of things I've learned recently: Lawyers, apparently, never sign these things, but they're kind of special because a good lawyer can just hang out their shingle. Also, in the UK, it's common practice in the financial industry for the hiring company to pay a year's salary or more for someone they are poaching from a competitor to take a nice vacation, so they can come back outside of their non-comp boundaries.
The latter (UK financial) happened to a cousin of mine. The former I learned from my wife, who recently left the DOJ and was heavily courted by an HR consulting company. They practically begged for her to join, but they could not guarantee a minimum amount of consulting work, and also required a non-comp. Her reaction? "I believe slavery is still illegal in the US." No go.
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bs (Score:5, Insightful)
This is not a lowly employee for them to bully around. This is an executive vice president. Did you not read the article? These are the kind of people who could easily say "Strike that from my contract or no deal, and I'll work somewhere else"
I don't know him personally, and I'm sure he's a fine individual; but that said, I don't think he'll be in a pinch for money anytime soon. If this causes reform that affects normal people like you and me great. But otherwise I could careless, he should suffer the same fate we would. The difference is that if you or I left or get laid off a. we don't have a crazy pension that he likely does. b. we don't have companies happy to pay 6+ figures a year for us to do nothing.
The person is lying, no one forces you to sign anything. Employment is at will, if you don't like it negotiate it or don't sign it. That's how the legal system works. I can't sign a loan for a million dollars and then say you didnt really think I was going to pay you back did I?
Hopefully this will get the contracts and the laws regarding them updated and inspected. Much like the copyright issues with music, instead of breaking the laws and skirting them lets CHANGE them.
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Re:bs (Score:5, Insightful)
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Re:Lame response (Score:5, Informative)
Lawyers don't sign non-competes because they're barred by ABA Model Rule 5.6(a).
Not that I just finished taking the MPRE or anything.
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Re:states rights! (Score:5, Interesting)
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Re:states rights! (Score:4, Interesting)
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Is this Dilbert or Slashdot? (Score:5, Funny)
An executive named Papermaster?
Time to get rehired (Score:5, Funny)
What kind of an idiot... (Score:5, Funny)
...starts litigation against a guy named Papermaster?
NY law applies (Score:5, Informative)
I may not fully understand non-competes... (Score:5, Insightful)
A non-compete seems to me the perfect way to pay your best employees peanuts. If you sign a non-compete, then you're basically trapped at one company, and can never get a job in the same industry again. Using that information, your employer could pay you as little as they want and never fear you leaving for another company.
Re:I may not fully understand non-competes... (Score:5, Interesting)
Some really do last a lifetime, I have a non-compete agreement in my secret 3 letter agency clause that says: "We, as in a bunch of guys with guns and the keys to all the jails and stuff, will come get you no matter where you are in the world if you don't keep your mouth shut about our government secrets until you die. If you work for someone else in the trade we might even hang you until you are dead, then put you in jail for 322 years just to make sure"
Sign the delta brief and you've signed on for life.
My choices were quite limited after resigning. People don't want to employ former spies. The best I could manage were a few low paying industrial espionage gigs. So I put ~disgruntled former spy~ in the resume and my troubles went away overnight.
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Competition? (Score:4, Funny)
Wait, hunh? What market do IBM and Apple compete in, anyway?
Apple:
Desktop PCs
Desktop operating systems
Media Players
Phones
Artsy Pretentious Attitude
IBM:
Semiconductors
Server hardware
Point of Sale crap
Overpriced IT services for senile old corporations
Lawyer zerg rushes
B-school Pretentious Attitude
The only possible overlap was in desktop PCs, and IBM sold that division to Lenovo.
California wants to make this difficult... (Score:5, Interesting)
Sure it would be nice if such non-compete agreements could not be implemented. From what I have seen in the past it was unusual that an employer would get themselves into this situation in the first place - if a possible non-compete problem existed they just didn't bother with that applicant.
Once you start opening the door to such things, it is very difficult to just sue the company. What the non-complete may be relevent for may be something that is buried deep in the processes of the company and not at all apparent in the resulting product. And besides, that just opens the door to exploratory lawsuits because the person that got hired might be disclosing information they have no right to disclose.
This isn't just "personal knowledge" either. It is often "organization knowledge" that you have to know about in order to do your job at Company A. Upon going to Company B it is clear that if they only knew what your former employer did, they would get more sales, make products faster and cheaper, whatever.
Where some co-workers got themselves into trouble was (a) not disclosing there was a non-complete agreement in the first place and (b) trying to find out how much this knowledge might be worth to their new employer. As in "I might be able to offer some advice on how to do this better for $5000." Yes, I heard about that offer once. It was a while ago and resulted in immediate (same hour) termination of the employee.
Compensation? (Score:5, Insightful)
I think if a company wants to force someone not to work in their area of expertise for a year then they should be forced to compensate that person for a year. They should match Apple's compensation and benefits and the guy doesn't have to work. That seems fair.
Re:Compensation? (Score:5, Informative)
FTFA:
In September, Apple again contacted Papermaster, which led to more meetings with Jobs and others in early October. After he declined a counteroffer from IBM and another, separate offer to "sit out" for a year in exchange for his current base salary, Papermaster told IBM he had made up his mind and was going to Apple.
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