Apple, A123 To Settle Lawsuit Over Poached Battery Engineers

itwbennett writes: Slashdot readers will remember that back in February, electric car battery maker A123 Systems sued Apple for allegedly "raiding" the Waltham, Massachusetts, company and hiring five employees, including two top-level engineers. The loss of these workers essentially forced A123 to shut down some of its main projects, the suit alleged. Now, according to court documents filed Monday, A123 and Apple "have reached an agreement, signed a term sheet, and are in the process of drafting a final settlement agreement."

Comments

A123 was THAT THINLY staffed?

[swschrad]

(( checking to makes sure I don't have that stock anyplace ))

Re:A123 was THAT THINLY staffed?

[bobbied]

(( checking to makes sure I don't have that stock anyplace ))

Trust me, you don't own any, or if you do, it's worthless anyway. They went bankrupt and got sold off by the courts. Stockholders got nothing.

Here's the thing

[Anonymous Coward]

Take care of your engineers, let them be engineers and not managers, and other companies like Apple wouldn't be able to "poach" them.

Re:Here's the thing

[Anonymous Coward]

everyone has a price, and if you have the dollars, you can use the dollars from your monopoly to poach anyone. This isn't an anti-collusion suit; this is a civil suit about monopoly abuses.

Re:Here's the thing

[sexconker]

everyone has a price, and if you have the dollars, you can use the dollars from your monopoly to poach anyone. This isn't an anti-collusion suit; this is a civil suit about monopoly abuses.

Globex Corporation couldn't buy Waylon Smithers.

Re:Here's the thing

[war4peace]

Coca Cola couldn't buy Dr. Pepper either. But that was FTC being against it so it doesn't count :)

Re:Here's the thing

[citizenr]

AFAIR they got $250K no questions asked transfer bonuses and +20% pay bump, who would refuse that?

Re: Here's the thing

[oobayly]

But they got the second most senior employee.

Re:Here's the thing

[gnasher719]

everyone has a price, and if you have the dollars, you can use the dollars from your monopoly to poach anyone. This isn't an anti-collusion suit; this is a civil suit about monopoly abuses.

You're being ridiculous. This is a suit about one company not liking that another company offers an employee a better paying job. To which I say "suck it up".

Re:Here's the thing

[ultranova]

everyone has a price, and if you have the dollars, you can use the dollars from your monopoly to poach anyone. This isn't an anti-collusion suit; this is a civil suit about monopoly abuses.

And by "monopoly abuse" you mean "paying the best price". But don't worry, I'm sure lobbyists are already busy at work to fix this strange bug in capitalism that caused it to momentarily benefit people, rather than corporations and stockholders.

Re:Here's the thing

[BVis]

This. When the job market is soft and people are hard up for work, then you can pay them less. When the job market for these employees is super duper tight, to the point that one or two key people can make or break a company, wages SHOULD go up. That's supply and demand. Employers can't have it both ways. They TRY to through overt and covert collusion (this goes on a hell of a lot more than is generally known, people DO play golf together, after all) and simply refusing to pay more. As long as every company refuses to increase salaries, people will get paid less.

If A123 was worried about their people being poached away by a company that pays more, they should have given them raises to keep them happy and working there. For some reason, the suits don't understand that the workers are, in fact, NOT chained to their desks, and have the right to leave whenever they choose, and they frequently do so when someone offers them more money. Yes, it's inconvenient and annoying, but that's the situation. Something about slavery being illegal. Damn hippie socialist fascist homosexual liberals, wanting workers to have rights.

Re:Here's the thing

[Coren22]

Something about slavery being illegal. Damn hippie socialist fascist homosexual liberals, wanting workers to have rights.

Those sentences taken together are rather funny. The republicans put an end to slavery, the democrats were for it. So are you trying to say the northern republicans were socialist, fascist, homosexual, liberals now?

Re:Here's the thing

[BVis]

Better than being Dixiecrats, which is who you are referring to about being pro-slavery and anti-minority in general. There are no longer any Dixiecrats, there are some "blue dog" Dems but that's an entirely different thing.

Both ways?

[JBMcB]

Last year: Hey Apple, you can't collude with other companies to prevent poaching from each other!
This year: Hey Apple, you can't poach other company's employees!

Well which is it? Either you can hire other company's employees or you can't.

Re:Both ways?

[rahvin112]

Considering they are two completely different things you shouldn't be struggling with it.

The first, apple colluding with others, was a violation of the law. Market collusion between competitors is illegal, in this case in particular it cost hundereds of people thousands of dollars apiece.

The second, was a civil suit between companies likely for unfair competition. Apple's settlement of suit, rather than just going to court and winning indicates that Apple might have engaged in some improper behavior in acquiring those employees.

The only the first was illegal, the second very well could have opened Apple up to a civil lawsuit or they could have just settled to avoid the legal fees. Here's a tip for you, anyone can sue anyone (including themselves) for any reason. It's not till you get to court that you have to actually justify that suit and present evidence.

Re:Both ways?

[Anonymous Coward]

I feel like there is a grey line between paying engineers exorbitant salaries to shut down a competitor by attrition and offering to pay engineers a marginal increase within a standard deviation or two of the mean. I don't claim to know anything about the case specifics (IANAL, either), but I think that it could be argued that once you get passed a standard deviation or so, your actions become what amounts to anti-competitive tactics. Especially when your targets are effectively strategic assets to the company.

Re:Both ways?

[ozzee]

Being a big company, Apple has many to be careful not to use its size to kill companies. Simply put, if Apple wants A123's tech and it can simply provide key A123 employees an offer they can't refuse, it gives them an unfair advantage and they can do this to any company. A company the size of Apple is able to do this many times over and it simply becomes an unstoppable monopoly which goes against the the whole spirit of capitalism when one company can control everything.

Re:Both ways?

[afidel]

Uh, how is this any different than when Apple ties up all the Gorilla glass capacity, or 1.8" hard drives (original ipod), or Samsung fab capacity for X months, or any other scarce resource that doesn't allow competitors to compete directly with them through contracts and offering a higher price? Oh, it involves non-executives earning a higher wage so therefore it's somehow bad. Pure BS.

Re:Both ways?

[TechyImmigrant]

Last year: Hey Apple, you can't collude with other companies to prevent poaching from each other!
This year: Hey Apple, you can't poach other company's employees!

Well which is it? Either you can hire other company's employees or you can't.

And you either do or don't. It's a 2x2 matrix. can't/do, can/do, can't/don't, can/don't.

Re:Both ways?

[Anonymous Coward]

Complete garbage. So you'd rather have undervalued employees? If your employees are so valuable that your company dies when they leave then you need to pay more. You're just undervaluing their work.

Re:Both ways?

[RenderSeven]

Well, the suit claimed that Apple hired Mujeeb Ijaz (in charge of R&D), who in turn enticed his key scientists and engineers to follow him. A123 claims that:
- Ijaz has a non-compete clause in his contract,
- The other employees have a non-compete also
- Ijaz has a non-solicitation clause in his contract
- Apple knew about the clauses and enticed them to break them
- All the employees shared A123 proprietary knowledge and trade secrets with Apple
- Apple orchestrated all this to obtain trade secrets illicitly
- Ijaz attempted to solicit A123 partners on Apple's behalf

Yeah yeah, 'A123 claims' doesnt make it true. And, non-compete clauses may or may not be enforceable, though this type of situation may be one of the rare cases where it is. Still, if Ijaz had a contract to not solicit his former employees, thats enforceable, as is violating confidentiality, as is enticing people to break the law, as is conspiring to do so. I'd say it was far from a slam-dunk dismissal and there was enough risk that they settled. While A123 may have not had the resources to fight a protracted legal battle, their Chinese buyer apparently did.

Re:Both ways?

[phorm]

It's one thing to hire talented worked away from a company and have them design new things.
It's another to get your grips on one worker, and essentially use him as a mole to take away a whole team and/or any proprietary stuff they've been working on (which is what seems to be alleged here).

If the latter is allowed, then if any smaller company is working on a breakthrough idea can be easily broken and their tech taken by a larger company with buckets full of cash to steal their staff and secrets.

Re:Both ways?

[whoever57]

Well which is it? Either you can hire other company's employees or you can't.

I hate to break it to you, but, in the USA, different states have different laws. In this case, the legality of non-compete agreements is different between CA and MA.

(sees parent modded up to 5, thinks: mods, you are idiots!)

Re:Both ways?

[Anonymous Coward]

You can be sure a company buying up all of the capacity of a given component will draw some watching eyes to it.

Especially if Apple, for example, paid Corning or Samsung not to expand their capacity when they had customers to justify doing so.

See the Clayton Anti-Trust Act.

Re:Both ways?

[Harlequin80]

Non-Compete clauses are hard to enforce unless the employee left demonstrates certain behaviours that show them operating in poor faith. The type of thing would be calling all your old clients and saying "I did this for you at A123 for $x, now I'm with Apple I will do it for $y where y is less than x"

Other enforceable clauses are the non-solicitation clauses. In particular the courts frown on knowingly breaching the non-solicitation clauses to entice other employees. It is considered again operating in bad faith.

Re:Both ways?

[Harlequin80]

The first case was not a non-poaching agreement it was a non-hiring agreement. You work for google then apple won't hire you. It isn't about tempting someone to change jobs.

The second case is you have an agreement not to solicit another companies employees. Nothing stopping you from hiring them. Everything stopping you from calling them up and saying "what do I have to do to get you to quit your job and come work for me"

These are not opposite sides of the same coin.

Re:Both ways?

[Anonymous Coward]

well, if you're a monopoly, you're not allowed to do these things *to harm competitors*. However, if you're buying all of the hard drives because tehre's not enough capacity, that's okay.

Re:Both ways?

[ZorglubZ]

If your start-up (i.e. poor) company is dependent on the work your lead researcher is doing, and an other company offers $bignum to hire her (with a co-hiring bonus for every former cow-irker that follows), and everyone involved except you are in on the deal, how can you possibly bid to keep your top dog, especially since he already has a fairly good understanding of what you can - and cannot - afford to pay?

Re:Both ways?

[gnasher719]

If your start-up (i.e. poor) company is dependent on the work your lead researcher is doing, and an other company offers $bignum to hire her (with a co-hiring bonus for every former cow-irker that follows), and everyone involved except you are in on the deal, how can you possibly bid to keep your top dog, especially since he already has a fairly good understanding of what you can - and cannot - afford to pay?

And what reason can you give why the lead researcher shouldn't be able to make more money?

Re:Both ways?

[ultranova]

Simply put, if Apple wants A123's tech and it can simply provide key A123 employees an offer they can't refuse,

An offer they can't refuse? Did Apple threaten to break their kneecaps? Or did Apple simply promise to pay more?

A company the size of Apple is able to do this many times over and it simply becomes an unstoppable monopoly which goes against the the whole spirit of capitalism when one company can control everything.

The spirit of capitalism is that resources should go to those who can extract most value out of them, determined by being willing to pay most for them. If Apple can afford to pay those engineers more than A123, then Apple can apparently get more value out of them, and thus should have them.

You don't get to approve when employees have to compete for employers, yet turn around and start whining on the odd occasion when the tables are turned and employers need to compete for employees. Not unless you're willing to abandon even the pretense of fairness and equality before the law. Which, you should note, will eventually lead to a revolution.

The very fact that A123 brought a suit like this is evidence that the system is breaking down and degenerating into feudalism. Property gets "poached". That A123 uses such terms in regards to human beings should get its executives on some kind of watch list.

Re:Both ways?

[afidel]

Non-competes are basically unenforceable in California unless you're a principal who is selling the business and nonsolicitation clauses even against poaching clients are void in California so going after former coworker is almost surely protected. The ONLY leg they might have to stand on is if they can prove that Apple was hiring these folks to misappropriate A123's trade secrets, not merely to hire them for their skills in the arts which is a very hard thing to prove so long as Apple was smart enough not to leave a smoking gun like an email stating clearly that they wanted A123's tech.

Re:Both ways?

[edtice1559]

Everyone is saying that non-competes aren't enforceable in California (and many other places) But non-solicitation is enforceable almost everywhere. If Apple were to hire people improperly solicited, it would be along the lines of tortious interference. I am not a lawyer and I'm not beautiful enough to play one on TV.

Re:Both ways?

[Anonymous Coward]

"how can you possibly bid to keep your top dog"

If he/she is THAT important to your business, you could offer an equity stake in the business.

Re:Both ways?

[RenderSeven]

Non-competes are basically unenforceable in California

Thats my understanding as well, which is why A123 sued in Massachusetts, and Apple tried (unsuccessfully) to move the case to California. According to Wikipedia the current applicable MA law states “A covenant not to compete is enforceable only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest”. The most recent test case I could find is IBM v. Papermaster (2009) involving (perhaps not coincidentally) Apple poaching. The court backed IBM and granted an injunction against Papermaster, citing and expanding "inevitable disclosure". Papermaster & Apple settled before trial, just like they did with A123.

Google, Microsoft, Apple and so on have all settled these cases in the last 10 years or so, so nothing has gone to trial so no case law has been established, but IBM v. Papermaster lays the groundwork for more enforcement of non-competes in some cases. IANAL but it seems the anecdotal assumption that "non-competes are basically unenforceable in xxx" may not be as absolute as we engineers assume it is.

Re:Both ways?

[david_thornley]

Offer the lead researcher lots of stock or stock options. If there's a good prospect of $biggernum if the startup succeeds, that may keep the researcher there. Is there some reason said lead researcher should accept less than market rate for his or her talents, just to help somebody else's company?

Re:Both ways?

[Plumpaquatsch]

Considering they are two completely different things you shouldn't be struggling with it.

The first, apple colluding with others, was a violation of the law. Market collusion between competitors is illegal, in this case in particular it cost hundereds of people thousands of dollars apiece.

The second, was a civil suit between companies likely for unfair competition. Apple's settlement of suit, rather than just going to court and winning indicates that Apple might have engaged in some improper behavior in acquiring those employees.

The only the first was illegal, the second very well could have opened Apple up to a civil lawsuit or they could have just settled to avoid the legal fees. Here's a tip for you, anyone can sue anyone (including themselves) for any reason. It's not till you get to court that you have to actually justify that suit and present evidence.

So your argument is that Apple, Google, Adobe and all the other should have sued each other for poaching their employees instead? Because going to court is the American way?

Re:Both ways?

[Plumpaquatsch]

Being a big company, Apple has many to be careful not to use its size to kill companies. Simply put, if Apple wants A123's tech and it can simply provide key A123 employees an offer they can't refuse, it gives them an unfair advantage and they can do this to any company. A company the size of Apple is able to do this many times over and it simply becomes an unstoppable monopoly which goes against the the whole spirit of capitalism when one company can control everything.

What gives you the idea that it was Apple's poaching that drove A123 into bankruptcy - considering the 5 people left after the filing - more than a year later.

Re:Both ways?

[Plumpaquatsch]

If your start-up (i.e. poor) company is dependent on the work your lead researcher is doing, and an other company offers $bignum to hire her (with a co-hiring bonus for every former cow-irker that follows), and everyone involved except you are in on the deal, how can you possibly bid to keep your top dog, especially since he already has a fairly good understanding of what you can - and cannot - afford to pay?

Errm, A123 was founded in 2001 as a MIT spin-off, and non of the original founders were poached.

Re:Both ways?

[Plumpaquatsch]

Well, the suit claimed that Apple hired Mujeeb Ijaz (in charge of R&D), who in turn enticed his key scientists and engineers to follow him. A123 claims that: - Ijaz has a non-compete clause in his contract,

Bing-bing-bing. How exactly do Apple and A123 compete? Or will compete? Will Apple suddenly go in the business of selling batteries to other companies?

Re: Both ways?

[Anonymous Coward]

As many of the linked articles point out, there is speculation that Apple is developing an electric car. Their stockholders brought it up with Cook on the last conference call, and also the posibility of buying Tesla. Since Apple could probably have most everything dismissed if they weren't going to complete, it may be telling that they choose to settle rather than open the subject up to discovery.

Re: Both ways?

[Plumpaquatsch]

As many of the linked articles point out, there is speculation that Apple is developing an electric car. Their stockholders brought it up with Cook on the last conference call, and also the posibility of buying Tesla. Since Apple could probably have most everything dismissed if they weren't going to complete, it may be telling that they choose to settle rather than open the subject up to discovery.

But A123 doesn't build cars. So where do they compete?

Re: Both ways?

[Anonymous Coward]

This is what happened with a high up BlackBerry employee that jumped ship to Apple. It was shown to negotiate in bad faith as he negotiated position and raise over 3 month period with BlackBerry while in negotiations with Apple. BlackBerry won the 6 month injunction preventing him from starting at Apple until over. This was in Canadian court, IIRC. Too lazy to track down source. I think it was a combination of knowing trade secrets and being high level with inside knowledge of company plans for next year.

Re: Both ways?

[Plumpaquatsch]

This is what happened with a high up BlackBerry employee that jumped ship to Apple. It was shown to negotiate in bad faith as he negotiated position and raise over 3 month period with BlackBerry while in negotiations with Apple. BlackBerry won the 6 month injunction preventing him from starting at Apple until over. This was in Canadian court, IIRC. Too lazy to track down source.

If you had, you'd seen it was Motorola, not Apple http://www.tomsguide.com/us/RIM-Sues-Motorola,news-3241.html - but maybe you did remember that ...

Apple...

[bobbied]

Dirty rotten poachers.... Who would have guessed?

Actually, this was about Apple helping these guys break non-compete agreements. As long as they moved to Cali, I don't see how this is a legal issue for Apple. Non-competes for employees are not enforceable in Apple's home state, so just move the employees there until the terms of the non-compete agreements laps. I guess if you cannot go after the ex-employee, go after their employer if they are a competitor...

From what I know about this, Apple was in the clear and despite my general negative feelings about the company, I don't think they did anything wrong. Why are they settling?

Re:Apple...

[Anonymous Coward]

In the U.S.A. it is a lot cheaper to settle than go to court.

Re:Apple...

[PopeRatzo]

In the U.S.A. it is a lot cheaper to settle than go to court.

Not if you have an in-house legal department.

The settlement could well be because Apple fears what might come out in the discovery phase.

Re:Apple...

[slew]

If I had to speculate (and /. is the place to do so), I would guess that it was likely that at least one of the Engineers...

* Recruited another employee in violation of a no-solicitation agreement.
* Had a "choice-of-law" provision attached to their employment agreement (and were originally employed outside of California)
* Had some ownership stake in the A123 which had some restrictions which Apple volunteered to buy-out. (which would be stupid for apple to do, but you never know).

As I understand it, Apple was in process of petitioning for a change of venue (to California). Although California law is clear that no-compete employment agreements cannot be enforced, it less clear when no-competes agreements are entangled with ownership changes or in the case of no-solicitation so as to avoid any distraction to their new employees, they probably just decided to settle (for the right price)...

Re:Apple...

[perpenso]

In the U.S.A. it is a lot cheaper to settle than go to court.

Not if you have an in-house legal department.

It is if they are already busy with more important issues and cases. Its only not a burden if they currently have some free time.

Re:Apple...

[AnotherSeattlePrgmr]

In the U.S.A. it is a lot cheaper to settle than go to court.

Not if you have an in-house legal department.

The settlement could well be because Apple fears what might come out in the discovery phase.

Non competes almost always don't apply in California. If they moved those employees to California, wouldn't that mean the non-comp end? Non-competes are only good for companies. They should be ended. Did you know that as a matter of policy, lawyers aren't subject to noncompetes.

Re:Apple...

[drinkypoo]

Or it could be a token settlement that simply permits A123 to save face, because Apple is otherwise going to shit all over them. We're not going to get to see the agreement.

Re:Apple...

[edtice1559]

No compete is not the same as no-solicitation. Looks like I will have to copy and paste this all around the discussion.

Re:Apple...

[Plumpaquatsch]

In the U.S.A. it is a lot cheaper to settle than go to court.

Not if you have an in-house legal department.

Only if your in-house legal department has even one trial lawyer in the team, not when it consist of people writing EULAs and other contracts. So why don't you present us one trial lawyer working for Apple?

Why are they always poaching them?

[ArcadeMan]

You can have them scrambled, hard-boiled, soft-boiled, sunny side-up, deviled, baked, curried, etc.

Oh wait, did you say "engineers"?

Re:Why are they always poaching them?

[Whiteox]

Yeah I wondered about that. How many engineers does it take to change a battery?
Two. Because you need 4 hands to crack open an iPod.

So employees are property?

[trout007]

You don't own your employees and there is no such thing as poaching them. Offering a better deal is a perfectly legitimate business move.

Re:So employees are property?

[Harlequin80]

No but you can have agreements to not approach employees of another company to come work for you. This is different to "We will not employ your staff" which is what Apple got in trouble for previously.

You see "do not poach" clauses as a regular component of contracts where two companies are working very closely on a project together. The no-poach agreement usually runs for the duration of the project plus a period of time (usually 6 or 12 months)

Re: So employees are property?

[Anonymous Coward]

Maybe you need to remember what this was in. It is quite clear that here in the land of free you indeed owned by the corporations. This story proves you don't even have the right leave one without them claiming illegal activities.

Re:So employees are property?

[tompaulco]

No but you can have agreements to not approach employees of another company to come work for you. This is different to "We will not employ your staff" which is what Apple got in trouble for previously. You see "do not poach" clauses as a regular component of contracts where two companies are working very closely on a project together. The no-poach agreement usually runs for the duration of the project plus a period of time (usually 6 or 12 months)

If someone wants to come work for a company and the company is willing to hire them, then it seems like any agreement preventing that would be in violation of the employees fundamental rights of pursuit of happiness.

Re:So employees are property?

[Harlequin80]

No sorry you misunderstand.

You want to come work for me you are absolutely more than welcome. In fact I would LOVE you to come work for me. I have no restrictions on hiring you at all. As long as you make the first move.

What I have is an agreement with your current employer that I wont walk up to you and say "So TomPaulco, what is it going to take for you to leave your current work and come over to me?"

As I said there is nothing stopping you coming and working for me, nothing stopping you from your rights to pursue happiness. The restriction is on my ability to tempt you to come work for me.

Re:So employees are property?

[Anonymous Coward]

You can collude with other companies to artificially inflate the price of something? (i.e. number of hours exchanged for amount of dollars)

It's interesting that collusion is allowed when dollars are on the other side of the equation, even though it affects the population in pretty much the same way.

Re:So employees are property?

[Anonymous Coward]

Did you even read the stuff you copied? Key words are "to not approach". It matters who makes the first move.

Definitely a different kind of hostile takeover

[Qzukk]

Who cares about buying 51% of the stock when you can hire 100% of the employees away.

Re:Definitely a different kind of hostile takeover

[Plumpaquatsch]

Who cares about buying 51% of the stock when you can hire 100% of the employees away.

5 people is 100% of >2500 employees? Remind not to hire you for any job involving Math. Or Reason. Or sweeping the floor.

non-compete agreements

[Harlequin80]

For this to work A123 would have to successfully argue that Apple had a binding non-compete, common for companies that work together, and that poaching those staff was specifically to compete with A123.

I'm not a lawyer but I work in recruitment & employment, it is no uncommon for one company to poach a large part of a team from another. Generally you start with the leader and then work your way through the best people in the team.

smart

[Anonymous Coward]

A123: We will sue you
Apple: What we are doing is legal bring it on
A123: In the lawsuit we will publicly release the projects they are working on

Profit

Re:smart

[Plumpaquatsch]

A123: We will sue you Apple: What we are doing is legal bring it on A123: In the lawsuit we will publicly release the projects they are working on

Profit

Anything more specific than "batteries", then? "Batteries for cars", but unlike those that croaked in a Fisker during a Consumer Report test? "Batteries for use in electrical power distribution networks" - I'm sure Apple would want to keep that secret for now. "Batteries for small devices"?

Covert Operations

[Jacob Shumway]

Those engineers were allegedly working on a car battery for Apple. Perhaps Apple was concerned that details of their work for Apple would leak out. There's also the possibility, depending on how much Apple was paying for those engineers' contracted work, that A123 was able to hire some additional employees with the gains from the project, making their loss essentially a wash for the company. But if you can cash in on the success of the Apple Watch, why not have a go?

Re:Covert Operations

[Plumpaquatsch]

Those engineers were allegedly working on a car battery for Apple. Perhaps Apple was concerned that details of their work for Apple would leak out.

Interesting point, especially now that A123 is Chinese owned, working with several Chinese car makers.

It still amazes me that we treat labor as pawns

[Virtucon]

It's obvious that the A123 employees left of their own accord. A123 doesn't hold any exclusive rights to those folks unless their under contract. If these folks were "at will" employees then by all means if a new deal comes along they should go. All of this begs the point that Apple shouldn't be paying a dime to A123 in this case. Employees are not slaves and it's time to get out of the mindset that they are pawns that can be traded or kept at the whim of some task master.

Re:It still amazes me that we treat labor as pawns

[Registered Coward v2]

It's obvious that the A123 employees left of their own accord. A123 doesn't hold any exclusive rights to those folks unless their under contract. If these folks were "at will" employees then by all means if a new deal comes along they should go. All of this begs the point that Apple shouldn't be paying a dime to A123 in this case. Employees are not slaves and it's time to get out of the mindset that they are pawns that can be traded or kept at the whim of some task master.

Exactly. It's called employment at will. Revenue down? Layoff staff? Can't pay your bills? Sorry, not my problem. Better job offer? Leave company. Can't complete important projects? Sorry, not my problem. Absent an enforceable non-compete it works both ways.

Re:It still amazes me that we treat labor as pawns

[tomhath]

Noncompete is different from nonsolicit. If a couple of them had just left A123, no problem. But when they recruited other top talent after signing a nonsolicit agreement - lawsuit.

However, it seems A123 was more about raising money than actually delivering any products anyway. Hope, spare me the change, and all that.

A123 Systems was supposed to be a leading light in the next phase of clean-energy innovation in the U.S.—hundreds of millions of dollars in federal grants, state-government support in Massachusetts and Michigan, deals to supply the batteries for luxury electric cars.

In 2009, the Waltham, MA-based company registered the country’s biggest IPO, at $371 million. The company’s future, and the road ahead for cleantech manufacturing in the U.S., looked promising.

It didn’t quite work out that way. Today, A123 is in the middle of bankruptcy proceedings, with bids for its assets raising political alarm bells in Washington, DC.

Re:It still amazes me that we treat labor as pawns

[Virtucon]

non-solicits/non-competes should be illegal, period. If a company wants to raid, let them. This is part of the problem when you talk about tech talent that nobody likes to acknowledge. Because of soft handcuffs, you're not truly mobile depending on who your work for or who you'd like to transition to. I've had it happen twice in my career and it's bullshit. These employees didn't agree to indentured servitude and I doubt that A123 had them under contract.

Re:It still amazes me that we treat labor as pawns

[Registered Coward v2]

Noncompete is different from nonsolicit. If a couple of them had just left A123, no problem. But when they recruited other top talent after signing a nonsolicit agreement - lawsuit.

Most of the non-solicits I've seen prevent you from pursuing current customers, although not from them contacting you. As for not soliciting current employees, a recruiter can insulate you from that problem pretty easily.

Re:It still amazes me that we treat labor as pawns

[Anonymous Coward]

As for not soliciting current employees, a recruiter can insulate you from that problem pretty easily.

If you aren't allowed to do something, then sending someone else to do it for you is usually orohibited too. You might get conspiracy tacked on for a bonus.

Poached battery engineers?

[Ecuador]

Holy smokes! I never heard of engineers working on fried batteries, never mind poached!

I don't get it.

[mark_reh]

They poached engineers for their battery expertise, yet my wife has to keep charging her iPhone a couple time each day?

Look at all the iCrap portable "chargers" that have a bigger battery to be used to charge up iPhones (or maybe I am thrown off by the "i" they put on the names of these things and the Apple compatible cables they come with). If Apple had the battery figured out that whole cottage industry would not exist. It seems like Apple is in desperate need of help with batteries and they sure didn't get whatever they paid for by hiring this company's employees.

Re:I don't get it.

[Anonymous Coward]

They poached engineers for their battery expertise, yet my wife has to keep charging her iPhone a couple time each day?

Yup. It takes talent to make such a shitty battery, and making it nearly impossible to replace the battery.

That way, you are always forced to buy a new iphone!

Apple might need a better plan

[Anonymous Coward]

Plan A
      Apple hires one guy.
      The guy, working for Apple, uses proprietary info from 123 about which are the good guys.
      Apple had to pay for the misdeed of their employee.

Plan B
      Apple 'publishes' that they are looking for a battery team.
      A group of smart guys at 123 decide to all go apply to Apple.
      Seems like Apple ought to be able to hire from folks that come to them.

Looks like plan A was over the line.
If non-compete clauses are bogus, then I wonder if plan B would be ok?

Nothing to get: you're a Hateboi Hipster

[Anonymous Coward]

yet my wife has to keep charging her iPhone a couple time each day?

Then either she's:

1) Using it heavily
2) Using an iPhone several years old

Neither of which would be any different if she was using an Android, Fandroid.

Look at all the iCrap portable "chargers" that have a bigger battery

As opposed to all the portable chargers that come with USB cables for charging Android, Microsoft or Blackberry phones? Hateboi, heal thyself.

Re:Nothing to get: you're a Hateboi Hipster

[mark_reh]

Oh yeah? Sez you! I'm rubber, you're glue, whatever you say bounces off of me and sticks to you. Plplplpl Take that! hah!

Decimating small companies

[Anonymous Coward]

The comments on here seem to be pro-Apple, mostly, and look as if Apple did no wrong. I see a different story. I see a giant corporation with tons of money doing whatever they can to seduce people to leaving the small company. The comments about A123 not paying enough, or giving the best perks, are literally apples to oranges. A123 can't come back with a counter-offer if Apple raises the stakes high enough. Suppose Apple offers the employees 10 times their current salary. Could A123 be able to make that same offer to keep them? I seriously doubt it. The recruitment by the former lead seems fairly shady. Apple would never have settled if they could weasel out of it with delays. There must have been a smoking gun somewhere, and I would bet their is a non-disclosure rider on this settlement.

There will be no small companies at the rate business is conducted today. They will all be sued(patents), or poached, out of business.

Re:Decimating small companies

[Anonymous Coward]

If Apple is willing to pay 10x the market rate for engineers, it is not buying engineers, it is buying something more.

For 10x, it is likely more than just a team that works together.
Possibly 123's institutional knowledge of what works and what doesn't when building batteries.

It is a really interesting question if that is fair game.
On the one hand, engineers should be free to go seek employment elsewhere.
On the other hand, they should not divulge the proprietary knowledge of their previous employers when they do.
Who is to say what is proprietary knowledge and what is just engineering experience that they carry with them?

It seems unlikely that Apple paid that much.
More likely this is just a case of hiring the manager and then him knowing which are the good folks to hire.
That definitely seems shady use of proprietary knowledge.
But this particular shady may be done every day and not over the line?

Re:Decimating small companies

[Cocioc]

From my point of view, it's not that the comments here are pro-Apple, the majority are pro-employees. The way I look at it, if your company's future is dependent on these employess, you are definitely underpaying them if Apple (or any other big company) can poach them away. If your company is going bust without these people, maybe you can offer them ownership in the company, so if you make it big everyone wins. But, like most said here, most companies would rather sue, and treat their employees like a resource that can be abused, rather than compensate them fairly.

Instead of suing...

[Anonymous Coward]

Why don't you pay your employees more?