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Former IBM Exec Ordered To Stop Working For Apple
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.'"
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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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."
According to the non-compete agreement, NY law applies because IBM is based in NY. However Papermaster worked out of their Austin, TX offices where non-competes are not enforceable. One thing I think that Apple would argue is whether Papermaster is competing at all in his current job. Most non-competes only cover areas of work that are in direct competition. A former GE Energy executive taking a job at Exxon may have an issue. A GE Plastics executive may not have any issues. Right now I've heard two versions of the work Apple hired him. One version says the Papermaster will work as head of their iPod/iPhone line (which does not compete directly with IBM's blade server or chip technology). Another version has him head of the new chip design for iPod/iPhones which is more direct competition.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Your post is silly. Companies require these non-comp agreements even where they are not enforceable so that they can bully their employees when they leave, if they leave for a competitive company. Without unionizing everything, few individuals will have the leverage to simply walk away from every company that requires a non-comp, and if they ever have to fight, it'll be expensive even if the law is on their side.
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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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.
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.
I'm a lawyer, but not yours. I wouldn't represent someone who thinks taking legal advice from Slashdot is a good idea.
"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."
From personal experience, the situation is often more complex than this. In my previous job the company was growing quickly and HR was not in place to cope. One year later a new head of HR reviewed everyone's file and required some employees to sign a new non-complete. At that point it would have been *very* hard for me to go back to freelancing and build up my old client base. I was also in management so refusing would have been awkward to say the least.
Two years go by and I was taking a job at another company working for one of my previous employer's clients. In my city about 50% of companies in the industry work for this client. I didn't maintain any key relationships nor was I stealing any secrets but I got slapped with the non-complete. Lucky for me, the new employer stuck their best lawyers on it to review the merits of the case and sided with me.
It's very hard to get out of signing a non-complete, or altering it, unless you have a strong position of negotiation (read: they need you more than you need them). Imagine you've accepted a job, told your employer, and then you learn you need to sign one. Imaging you have a job and are asked to after a period of employment. Imagine you're trying to break into the industry, or got laid off, and this is your first job offer in four months.
It's not so cut and dry-- I wish our government would do more to protect Joe the Developer's rights to "live liberty and the pursuit of happiness". I also take offense that you think someone who's a EVP, or pulls six figures, could be significantly hurt monetarily but this. Do you know for a fact that Apple is paying his legal bills? It's the individual getting sued in most cases and the result could seriously devastate his professional career.