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AMD Files Suit Against Former Employees For Alleged Document Theft
New submitter massivepanic writes "AMD has filed (and been granted) a request for immediate injunctive relief against multiple former employees that it alleges stole thousands of confidential documents. Named in the complaint (PDF) are Robert Feldstein, Manoo Desai, Nicholas Kociuk, and Richard Hagen. All four left AMD to work at Nvidia in the past year. The loss of Feldstein was particularly noteworthy, as he'd been the head of AMD's console initiatives for years. Feldstein was behind the work that landed AMD the Wii U, PS4, and Xbox Durango. He also worked closely with Microsoft during the Xbox 360s development cycle and brought that contract to ATI prior to AMD's acquisition."
Whether for political or monetary reasons, for governments or companies, it's a very, very, very old game
If computers were people, I'd be a misanthrope.
Either those guys were amazingly stupid, in which case they deserve what's coming, or AMD is throwing a smoke screen at the crowd to stop those dudes from producing work for nVidia. Time shall tell.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
“The court has ordered that the named defendants [...] prepare their computers and storage devices for forensic evaluation, and refrain from taking any action that would obfuscate the location of said devices or the data contained therein.”
Isn’t that a contradiction? That’s like CSI calling you up and telling you “We’re coming over next week, so make sure you prepare the crime scene for our arrival.”
Since it is a civil case, they can't just go and send in the FBI to seize everything right away. So the court is formally telling these people: Your computers are evidence, you must treat them as such. Should the people fail to do that, and erase things, they could be charged with tampering with evidence.
In civil cases (sometimes criminal too depending on the circumstances) you commonly see things like this, where the court will instruct someone that they are not to alter or throw away something because it is going to be evidence. Sometimes courts also will order additional retention.
Like say your company doesn't keep e-mail. All employees have to use POP and the server doesn't store anything. That's legal, in most cases you don't have to keep e-mail for records, if you don't want. Then a case comes up that involves it. The court might order you to retain all e-mail, for a time, because of that, though it isn't your standard policy.
Without this order, the employees would be free to wipe their computers if they wished. You and I can do a SATA secure erase on our disks at any time, for any reason, if we want and no legal trouble will come of that. It is our data, we do as we please (as an aside, you should do that on an SSD prior to reinstall, for performance reasons). These people cannot, temporarily, or they could get in trouble, because the court considers that what they have on their computers may be evidence and this order is why they cannot.
The thing is companies don't usually want to play that sort of game in situations like this because the chance to get sued is too high. They'll often help each other stop it. A dude tried to sell Coke's recipe to Pepsi, Pepsi called the FBI.
Goes double here, since nVidia seems to have the superior technology as of late. AMD's GPUs aren't bad, but they aren't as high performance as nVidia's parts, and their drivers are not as polished. There just isn't any magic juju that nVidia would want to steal, particularly given the risks.
My guess is this isn't an orchestrated defection. My guess is it is one of two things:
1) Some morons figured that they could make it big doing this, stole the documents on their own, and went over to nVidia. Perhaps this is even a result of a tip from nVidia.
2) This is a smokescreen on AMD's part, to try and keep these guys away from nVidia.
I just don't find it likely that nVidia would buy them off to do this. Too much to lose, not enough to gain. While they might want the people, which is totally legal, the tech isn't worth the risk.
I remember a story from a few years back when a guy from Intel went to work for AMD but downloaded tons of secret documents before leaving Intel. He was arrested on criminal charges, if I remember correctly. So why only a lawsuit here?
AMD's real problem, and their solution:
AMD's real problem is that when these people left AMD, they took their reputation and goodwill with them to another company.
This reputation and goodwill was an intangible asset on loan to, but not owned by, AMD which they borrowed upon by virtue of being these persons employer. See: http://en.wikipedia.org/wiki/Goodwill_(accounting) and http://en.wikipedia.org/wiki/Reputation
When these people left, they reduced AMD's outstanding goodwill and reputation. This loss was irrecoverable, short of hiring these people back -- and the people in question seemed rather fed up with working for AMD, so that wasn't going to happen.
One legal tactic to apply in this case is to devalue the goodwill and reputation of the former employees, such that AMD's loss did not become a competitors gain (thus doubling the effective loss to AMD). As a secondary effect, it will make it appear that the goodwill and reputation were AMD's, rather than the employees, in the first place. This is a pretty common tactic, and it really doesn't matter to AMD if the end result is paying a settlement to the former employees, particularly if they can drag it out to the point that the damage is irreparable and/or the costs to the party or parties receiving the settlement is comparable to the amount of the settlement.
Another legal tactic that could be applied would be to pay the departing employee some severance amount, usually cash, but potentially including continued health benefits, option or RSU vesting (in which case the cash severance could include additional option or RSU grants), etc.. This is commonly called "pay-for-no-play". This is pretty common, except in jurisdictions such as California, where non-compete clauses have been legislatively held invalid as a form of restraint of trade.
To get around the non compete limitation (if it's really a critical employee) in California, most pay-for-no-play severance agreements include a penalty and/or interest clause which makes violating them economically prohibitive. This can fail if a new employer is willing to "buy out" the penalty from the employee as part of a "hiring bonus". If an employee goes that route, they need to make sure they don't get stuck with paying back the hiring bonus, as a couple of colluding companies could easily strip both the severance and the hiring bonus, while leaving the other severance terms in effect.
Typically, this second doesn't come up very often, since it requires the employee stating an intent to leave without having already accepted a competitors offer (having accepted the offer, it is unlikely they will back out of the deal), making pay-for-no-play not an option for the employer they are departing. The current climate of the departing executive giving two weeks notice, then being frog-marched out the door by security without being permitted to serve their final two weeks makes it costly to the departing employee to give notice without having something already lined up. Worse, if there is nothing apriori lined up, it's frequent that networking between executives as a result of routine inquiries during the former employees job hunting process could poison the well. Such networking doesn't happen when the employee is approached or looking while employed, for fear of the employee as a candidate deciding to stay at their current position.
Most employees below an executive level never have to worry about this kind of thing involving them.
There have been a number of cases of prominent Open Source developers, where their reputation and goodwill is not legally controllable after their departure, have left a company. These are generally either truly amicable partings, or there is "pay-for-nice" involved, where something similar to the severance payment tactic is used in exchange for the Open Source developer agreeing to not attack the former employers rep