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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.
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.
A123 has had a number of problems, from their bankruptcy in 2012, their massive layoffs and executive bonuses, to later being purchased by a Chinese company and selling off their assets
Also, non-compete agreements are not valid in California. Even out-of-state NCAs are invalidated if the employee is to work at a CA company, (Exceptions if the employee is a stakeholder/partner/owner, which doesn't apply here).
They weren't holding their employees correctly.
A contract usually requires an exchange of consideration. If you're going to demand that one of the parties agree to terms beyond their agreed upon work duration, then you need to provide them with compensation beyond that duration.
And anyway, you can't sign away your civil rights. An employer can't make you sign a contract that says "...and I will be your slave forever and will never work for another company."
SJW's don't eliminate discrimination. They just expropriate it for themselves.
What about transferring company trade secrets to a competitor, like Apple? After all, there is no shortage of PhDs with knowledgeable in battery tech. Why did Apple hire 5 whopping engineers from a single company instead of from the open market? Was it because they had experience in this technology?
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.
They're not valid here either, if memory serves.
Do not look into laser with remaining eye.
If those five people did not take documentation from their former employer to their new employer, then they probably are clear of transferring trade secrets. After all, I'm not barred from using the skills that I learned at one employer at another employer, that's simply how the game works.
As for going for a team, this is not the first time that a team, or a significant portion of a team, has moved as a group from one company to another, and it certainly won't be the last. If A123 wants to retain their employees then they need to sweeten the pot for their employees. That could be more pay, or better working conditions, or more vacation time, or whatever those employees want. If another company makes a better offer then those employees have every right to pursue that offer.
Do not look into laser with remaining eye.
What about transferring company trade secrets to a competitor, like Apple?
Transferring trade secrets is illegal. But the fear that someone might transfer trade secrets (commit a crime) shouldn't stop them from getting employed, because most people do _not_ become criminals. Apart from that, _if_ Apple wanted trade secrets they could just pay the guys, they wouldn't have to employ them. Apart from that, no company including Apple would knowingly accept such trade secrets, because that would make someone at Apple criminal, and nobody wants to go to jail.
What this is about is that we have here a company which had massive layoffs, but wants to fuck its employees, and wants to grab money from Apple.
Unless you're talking about discrimination against a protected class, they can indeed make you sign whatever they want, if you want to keep your job. You can sue if they fire you for it, but you'll lose. The burden of proof would be on you to show that your former employer fired you for not signing that contract, and that they acted improperly when they did so. With Apple's lawyers, you wouldn't have a prayer of prevailing in court.
Never underestimate the power of stupid people in large groups.
Didn't Apple just lose a suit over the legality of noncompete and nonsolicit agreements?
Higher Logics: where programming meets science.
This is one company suing another company for not having to invest in plain employees to make them look attractive to another employer.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
Who says they didn't get that compensation?
When the employees signed the contract, they sure as hell thought it was sufficient compensation.
This isn't some non-compete for a totally different joy; these employees are basically doing the exact same job, but at a competitor.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
Perhaps I should have stated it differently. They can make you sign it, but the contract itself wouldn't be worth the paper it was printed on. I can twist someone's arm and make them sign a contract agreeing to be my slave for life. But no court of law is going to recognize it as a valid.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
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.
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.
Most states that allow non-compete had requirements that you be compensated about the normal amount, that there be a time limit and resonable geographical limitation and that your job be have responsibilities that make major changes for the business.
So a cook at a restaurant would not have a valid non-compete but if you were the head cook who designed all the recipes and the menu and were paid above what the other cooks made and were limited from working with-in 100 miles of the restaurant for the next two years then most states would accept that agreement. Some allow some consideration so if you were getting a whole lot of money that 100 miles range could be extended alot further.
If these are just regular workers then few states are going to accept the non-compete besides this is in california which outlaws all non-competes except for some very strict allowances.
I think you might be under the impression that you would prevail in a court of law, or, indeed, that being in the right has any affect on a lawsuit's outcome. It doesn't matter who's wrong and who's right; the party with the better lawyers wins the case, regardless of how wrong they might be.
Even if you did eventually prevail in court, by the time you got there you'd be an unemployable pauper. No company would give you a job (you're obviously a malcontent and a troublemaker who works contrary to your employer's interests, namely fucking you over as hard as possible), and lawyers are expensive. You might win (or, more likely, be arm-twisted into a settlement) but you'd lose everything you own along the way.
Never underestimate the power of stupid people in large groups.
Why did Apple hire 5 whopping engineers from a single company instead of from the open market?
They hired on the open market. You can hire engineers who either are unemployed, or who are willing to quit their current job. So it seems that either A123 laid off these five engineers, or the company is so awful that five engineers are willing to leave at the same time. From what I hear, both is equally likely. And from what I hear, I wouldn't put it beyond these guys to first fire an engineer, and then preventing him from getting another job.
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.
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.
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
But what employee has the wherewithall to fight a court case if it come to that? I never signed anything but my former employer had his lawyer call me to say in a 'friendly' way that I should not call on former clients. I was in no position to argue.
http://www.acetonestudio.com
Well said sir.
http://www.acetonestudio.com
I don't know, man, it sounds like you were in a position to argue. You could have asked him what it was worth to him.
You are right. It depends on the state and statutes vary widely. My understanding is that noncompete contracts are hard to enforce in California, but obviously this company thinks it is possible.
Yeah, but the company went out of business, so we were potentially both competing for the same clients. What it was worth to the douchebag was a lousy two weeks severance.
http://www.acetonestudio.com
It's also possible that the employer will settle relatively quickly. If an employer relies that heavily on such non-compete clauses, they certainly don't want to risk having a judicial precedent that nullifies that part of their contracts.
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.
Apple isn't even a party to these A123 agreements. Those are between A123 and the employees, so unless A123 is arguing some sort of wacky six-way conspiracy I think Apple will get this dismissed rather quickly.
Then A123 can decide if they want to sue the individuals, whereupon Apple will provide the five with complementary legal counsel to point out that non-compete agreements aren't valid in California.
It doesn't hurt to be nice.
And, since the employees are not employed in Massachusetts, they are not violating the agreement in Massachusetts. I think A123 is going to need to sue them in California where the contracts are being violated (and are void due to superseding state law). The employees just need to be sure not to visit MA for business until the non-compete term wears out.
It doesn't hurt to be nice.
According to Wikipedia, stealing or misappropriating a trade secret is a Federal crime. (IANAL, and I don't know whether this applies.) Other than that, it's state law, and a state might well criminalize transferring trade secrets illegitimately.
A "trade secret" is not just a phrase, it's a legal concept.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
5 PhDs VS 5 PhDs with credentials proving their ability to satisfy their specific needs. That's why.
I think you are mistaken. Unauthorized transferring of a trade secrets (or conspiring to do so) is criminal both federally and in CA and the damages are likely to accrue to civil proceedings as well if there is any tort claims.
As I understand it, it is an extension of the laws that restrict unfair competition.
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.
It is quite common to find a good hire, and then be very interested in who they would recommend. Or the people left behind ask about this new opportunity the hire left for, become interested, and ask to have their resumes forwards. I have seen a number of hires that come in such clusters of 3 or 4 in Valley, and I am not a well connect or a highly knowledgeable person on this topic. Even the "cluster" is spread out over a few months, it can feel like "unfair" poaching if a certain key group is denuded.
The fact that Apple made them an offer they didn't want to refuse hardly proves A123 are awful.
They might be. But this isn't evidence of that.
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.
And anyway, you can't sign away your civil rights
You absolutely can sign away certain rights.
If I sign a contract that says "don't reveal what you saw here" as a stipulation of getting a tour of some restricted area (say, a movie studio), then I post on my blog everything that I saw, yes I'm legally liable. Probably not criminally liable, but those are two different things.
Also, non-compete agreements are not valid in California. Even out-of-state NCAs are invalidated if the employee is to work at a CA company
But isn't the employee still bound to the contract he signed in Massachusetts? California can't invalidate other states' contract laws.
Your fault for accepting. Never take a first offer.
Even if I had no intention of contacting former clients I would have said I intended to. Just to get more money.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
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...
It is, but trade secrets are fleeting things and hard to prove. They are also hard to seperate from simple expertise in a field.
If a new hire says "At my former employer, we did Y because X always fails", it sounds like a trade secret, but the equivilent statement "X is unlikely to work well, let's try Y" is fairly hard to prove. Even "I've never seen X work, but Y looks good" is a bit ambiguous.
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.
"The burden of proof would be on you to show that your former employe"
blah blah blah...the burden of invoking arbitration and whatever the costs of that would determine your automatic settlement.
Welcome to the real world.
I object to power without constructive purpose. --Spock
An employer can't make you sign a contract that says "...and I will be your slave forever and will never work for another company."
"I'll be your slave forever", no, they can't. "I will never seek any form of employment anywhere else", yes, one most certainly can enter into such a contract. Even if no future considerations are given. It may not be prudent, but one can enter into such a contract.
As long one enters into it with full knowledge (not likely), one can agree to such terms. People exchange immediate considerations for future opportunities all the time (selling proceeds from future rights for immediate cash payout would be one such example). And no one "forced" anyone to sign a contract. Employment can be employment at will without any contract restricting the terms beyond those established by laws.
Having said all of this, I still don't understand how they can sue Apple for violating terms of a contract to which Apple is not a party.
Any guest worker system is indistinguishable from indentured servitude.
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.
A contract usually requires an exchange of consideration. If you're going to demand that one of the parties agree to terms beyond their agreed upon work duration, then you need to provide them with compensation beyond that duration.
And anyway, you can't sign away your civil rights. An employer can't make you sign a contract that says "...and I will be your slave forever and will never work for another company."
Typical R&D contracts have a non-compete clause. For 6 months or for one year you cannot work for a competitor doing the same kind of research.
The employee has the "right to work" clause, by default, and can't be stopped from working on projects in a different technical area at a competitor.
And then there is the question of ethics. Some companies have them, and some dont.
Leslie Satenstein Montreal Quebec Canada
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.
Shoot one hostage and the others start cooperating.
Generally, you're right, it's cheaper to settle and admit no wrongdoing, unless your employer wants to make an example out of you by burying you in legal fees related to discovery in the lawsuit. Employers usually have deeper pockets for this sort of thing. It's worth it to them, because it shows the other hostage.. I mean employees that they're in charge, they own you, and you cross them at your own peril. After a few months of enormous legal bills, PI harassment, and general hell, the suit gets dropped. The former employee loses everything, the employer gets to keep doing the shitty things that they do.
Never underestimate the power of stupid people in large groups.
Easy to say, but in my situation I had a 'friendly' conversation with the company lawyer warning me against contacting the clients. No way could I afford to fight it. Still, as time has passed and things become clearer it is easy to see who was the lesser human being. Former boss was a lazy, incompetent fool and killed his own business and I'm better off nowhere near the guy.
http://www.acetonestudio.com