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A123 Sues Apple For Poaching Employees
An anonymous reader writes "Electric-car battery maker A123 Systems is suing Apple in federal court for allegedly poaching five employees to help it develop a competing battery business. The suit accuses the workers, including A123's former chief technology officer, of breaking noncompete and nonsolicit agreements. "It appears that Apple, with the assistance of defendant Ijaz, is systematically hiring away A123’s high-tech PhD and engineering employees, thereby effectively shutting down various projects/programs at A123," according to the lawsuit. The news adds some credibility to rumors that Apple is getting into the automotive market. "
Now they complain when they do poach.
Come on.
... this is one company suing another company for being a more attractive employer?
Seriously?
I can see it now - It comes in only white and silver, the hood doesn't open, tires cost twice as much as non-Apple tires, you have to buy your gas only from Apple gas stations and the windshield-wiper fluid is made from the tears of children. On the plus side, the exhaust smells like a combination of vanilla and smug.
Yes, because there's no way that a company that makes portable electronics would have an interest in someone knowledgeable about batteries unless they were making cars...
This is my signature. There are many like it, but this one is mine.
Weren't we up in arms about the artificial wage stagnation due to silicon valley employers agreeing not to "poach" (AKA participate in capitalism) each other's employees?
If A123 wants to keep their employees, they might have to *gasp* offer them better conditions/compensation? The horror.
I thought Apple and others were being sued for having non-poaching agreements between them? If so, I would conclude that these agreements were anti-competitive and therefore illegal. But now they're being sued for *not* holding to a non-poaching agreement?
They weren't holding their employees correctly.
Those employee agreements are rarely enforceable
Our supreme court made a supremely wonderful decision on this very issue. Basically they said, that people in Canada have the right to work for anyone they want, where they want, and when they want. Also people are free to communicate thus can "poach" all they want and that any contract to the contrary would be a rights violation and thus those parts are null.
This particular decision actually even went further by saying that poaching clients was fine as well as long as the contact information was reasonably in someone's head.
The result would be that the only place that a non-compete could stand would be if there was another aspect such as the sale of a business. So if someone sold their business for $10,000,000 and then violated an agreed to non-compete there could be a lawsuit to recover some portion of the sale price. But they couldn't get any kind of injunction that would violate your constitutional rights only a monetary judgment.
So while our rights tend to be viewed as less black and white than the US constitution I was pretty much bouncing in my seat and clapping my hands when this decision came down the pipe as a serious blow against corporate tyranny.
Didn't Apple just lose a suit over the legality of noncompete and nonsolicit agreements?
Higher Logics: where programming meets science.
I'll have to side with Apple in this one just because I have little trust in a company that was given $249 million by the government, then stiffed the American people by going bankrupt and selling itself to China.
Gamingmuseum.com: Give your 3D accelerator a rest.
Here in the UK in the 1980's, there was a company called Sinclair Research that made a fortune in portable music and video players, home computing and wearable electronics. It then made a bold move into electric vehicles and completely screwed the whole thing up.
Contracts should exist similar to loans or buying things on ebay. There is risk to both parties making the contract and you can only go by the reputation of the party you are dealing with.
By having governments enforce contracts you just externalize the costs of dealing with dishonorable people.
If these employees signed a contract with A123 and broke it the only thing A123 should be able to do is make those contracts public and try to hurt the reputation of those employees.
I love Jesus, except for his foreign policy.
I am sorry, but if you have a 371 million dollar IPO and then are bankrupt three years later, that is horrible mismanagement. Smart employees are going to leave a company like that.
-Matt
Searching the reuters aricle for "Trade Secret" comes up empty. I see no "intellectual property" problem here.
IANAL, but non-competes are bullshit, and need to be outlawed. A supreme court ruling would be welcome. A123 would have to prove that Apple is a competitor, then they would have to go after the former employees. Apple can't legally have a non-poaching agreement anymore.
Employees have value and are willing to work for the highest bidder. This is called capitalism, and employers need to compete for a skilled labor force. If A123 wants to keep its employees, they should increase their pay offerings.
Actually it use to be that lots of car manufacturers had odd tire sizes so you either ponied up the $$$$$$ for the same tires or you bought a whole wheel/tire set brand new and threw away the oem set snd sasved $$$$$$ in the long run.
I got Mini wheels on my Yaris but needed to get two front tires. They were 50$ more than other brand name tires for a 175 65 r15
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
I'm sure someone will correct me:
I believe A123 had an exclusive with GM/Chevrolet for some time that precluded them from selling to competitors, or to the public. The enthusiast community in the US (electric car, bike, etc kits) then had to rely on re-importing A123 batteries from China/black market that had potentially been exported from the US into the grey market. This made them tough to get, but they had an ideal form factor, power density and draw rate.
If this play by Apple can change that scenario at all, it would be a big move.
Naming your company A123 anything is a lazy, sleazy choice. I'm sure since they're B2B they don't care, but it's dumb. It goes back to phone books (yup, still get them) and naming your company so it appears first. This probably helps them appear in some asinine searches online first as well. Screw them.
Oh and if Apple thinks your employees are worth it, maybe you should pay them more.
Actually, I'm all for engineers attaining rock star status. Let the bidding begin. Although agents and head hunters will have to actually work for the engineers and not the employers as they do now.
By having governments enforce contracts you just externalize the costs of dealing with dishonorable people.
I thought that was the point.
I thought this article was about hunting or eggs.
Want your employees to stay, give them working conditions and wages that encourage them to do so. (that said, it may be hard to compete against Apple pay-wise).
Apple et al already got crucified recently for agreeing not to "poach" employees (i.e. offer them a better pay/benefits to work elsewhere), and it was rules anti-competitive and illegal. Non-competes are similarly stupid and evil.
HOWEVER, if those employees are sharing corporate secrets or confidential data gleaned from their work with A123 with Apple... that would seem a reasonable grounds for a lawsuit.
the Apple car(t) or something.
http://www.acetonestudio.com
http://www.xconomy.com/boston/2012/12/10/a123-sells-bulk-of-company-to-wanxiang-feds-must-approve/
In America, the law is fair.
It's just as illegal for a rich man to starve under a bridge as a poor man.
At least we're before Apple in the Yellow Pages... except for those schmucktards from "A1 Auto Glass and Body Repair."
Slaves are valuable property that can only be sold. They can't just walk out and work for someone else. I mean, soliciting someone to leave would be like taking your stuff off the loading dock, it would be theft.
I'm being facetious, but if you treat employees are free individuals who should be able to chose their destiny, there should be no concept of "poaching"
I mean, if I was working there, I would be planning my escape now from these crazy career destroying idea hogs. And if I was doing a PhD in battery chemistry, I sure as hell wouldn't let these guys near any of my research. Any real company wouldn't do this sort of thing as litigating former employees (rather than just paying them the money you will spend on lawyers to entice them back) is a sure fire way to destroy your talent pool. To be fair, they stuffed up the battery venture, and are probably just run by some MBAs now who are slowly turning it into a patent trolling outfit.
Contracts should exist similar to loans or buying things on ebay. There is risk to both parties making the contract and you can only go by the reputation of the party you are dealing with.
By having governments enforce contracts you just externalize the costs of dealing with dishonorable people.
If these employees signed a contract with A123 and broke it the only thing A123 should be able to do is make those contracts public and try to hurt the reputation of those employees.
Yeah, I think that's how organized crime works... Hopefully you aren't suggesting that A123 goes that route to enforce their contracts...
Credit ratings are an accurate analogy, not organized crime. Organized crime uses actual violence, or the threat of violence. Credit ratings simply give a number that indicates the likelihood lending money to someone is a good idea.
This is where a group of idiots declares that Apple doesn't invent anything, their employees only "integrate" technology invented elsewhere. As someone who (a) invents hardware technology for a living, and (b) doesn't work for Apple, I can tell you with absolute certainty that you are completely full of shit. Apple does a huge amount of hardware R & D.
I don't see how they can even be legal. Blatent anti-competitive tactics.
Of course there are many laws enforced by governments concerning with how you are allowed to use credit ratings (not discriminatory), how you can get recourse for mistakes, how long dings/marks/bankruptcies are allowed to stay on your credit report, various usury and reporting laws, etc, etc..
OTOH, with less regulation, you get things like "bond-rating" companies that can collude with security issuers causing chain reactions that put the whole economy in the dumpers for a few years...
The question at the root of this is if people actually have the natural right of redress or not. If you have no right of redress, it is up to you to enforce the performance of any contracts or suffer the victimization of a tort (say by attempting to besmirch your tortfeasor's reputation).
However, if redress is a right, then it is a reasonable function of common entity to provide a forum to do so to prevent the anarchy of perpetual revenge or from those with more resources to crush those with fewer resources. For a simple transaction on Ebay, the company provides a redress resource to further its business goals (of skimming transaction profits). In other real life situations, that is often the government (because there isn't much profit in providing a redress forum for most torts, so nobody will provide it gratis).
Note that for many large contracts, they specify arbitration clauses anyhow so they specifically don't use the government courts to arbitrate, but merely enforce the result of the arbitration.
Without some backstop authority like the government, I suspect there would be larger non-compliance and increased use of "other-means" which is probably not what anyone wants (e.g., the organized crime element)... Have you ever heard of businesses like mugshotsonline or dontdatehimgirl ? You don't necessarily need violence to be organized and criminal...
Or people would actually do some research into a person they are about to sign a deal with. As it stands now people really don't bother because if the deal falls through they can use other peoples money (taxes) to hire goons (police) to make the other person pay.
Let's say you get three bids for a contract. You go with the low bidder because you always can go to court to get them to adhere to the contract. If you actually took the risk yourself you would either have to go through a third party (like e-bay or credit card companies that have buyer protection) or actually take the risk yourself. Either way is superior in my opinion.
I love Jesus, except for his foreign policy.
How do you think A-123, aka, APC South, got many of their employees in the first place?
I think you are conveniently ignoring the "tort" issue of redress.
Certainly you can put the burden of up front research on everyone, but as they say, shit happens (even with the most reputable companies), or in some situations there is little choice (e.g., high-speed internet through cable providers). You of course can always do without interacting in commerce as a choice, but I would venture to guess that historically, many folks all over the political spectrum would want to "socialize" that aspect of human interaction even if you might think it is a waste of government tax money.
Also, "research" that is privately provided is sometimes of limited value. Although conventional wisdom might think It varies from internet forums, yelp and bbb to consumer reports and dun and bradstreet, but eventually extortion site like mugshotsonline and dontdatehimgirl or yelp creep up? With these options, sometimes you don't want to do commerce with anyone and I think it's in the best interests of government to provide at least a little incentive for commerce, if nothing else to increase tax revenue and keep the little people happy with shiny new toys...
There are much easier solutions that already exist like credit card companies. My Amex has buyer protection. If a vendor screws me over (which happens from time to time) I call Amex up and the investigate and refund the charges. The cost is what they charge to the merchants. So both the merchant and I are voluntarily paying a fee. The merchant gets a larger customer base by taking Amex and I get buyer protection.
The only people that benefit from the current system are the crooks. The whole system exists to unload the cost of doing business with shady companies to the tax payers.
I love Jesus, except for his foreign policy.
I see you have already drank the koolaid...
Although you think that AMEX (and other major credit providers) are charging both sides a fee, in reality, they are only charging the merchants a fee (the fee they charge you is basically nominal).
The profit from the credit card enterprise mostly comes from shaking down businesses (they aren't allowed to list prices as more different credit protection levels or for credit than cash) and extracting from the poor a highly regressive tax in the form of an usury/predatory loan. In reality, that no different than the government other than it's "voluntary".
The shakedown game they use is not much different than the so-called windows-tax. Companies that decided to ship any windows machines need to pay for every machine regardless if windows is shipped with that machine or not. Credit card merchant agreements generally require merchants to list the same prices for simple credit and rewards cards (generally the only ones with the buyer protection and no fees) even though they pay different processing fees for the rewards cards (up to 3x the merchant fees).
The only reason it seems workable to you is that you are free-riding on the "tax" paid by others in the system. With the "government" scheme, you feel others are free riding on your taxes and you resent it. Much like the government scheme, if the poor folks boycotted the credit card tax, your free-ride would end because it is not sustainable. I can't see much of a difference to be honest...
China bought A123 several years ago and have really not done much with it.
Apple by bringing over top ppl will hopefully make things go right. As it is, with Tesla building 2 gigafactories in America, Apple might be willing to have tesla build a couple for them, using their own technology.
Regardless, hopefully, this will use Tesla's charging system and skip the other BS ones.
I prefer the "u" in honour as it seems to be missing these days.
The difference is voluntary and force.
This is also how large stores give a 5% discount using their own cards. They don't have to pay the fees.
I love Jesus, except for his foreign policy.