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Former IBM Exec Ordered To Stop Working For Apple

ScuttleMonkey posted more than 5 years ago | from the petty-jealousy dept.

IBM 270

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.'"

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states rights! (5, Insightful)

mactard (1223412) | more than 5 years ago | (#25712963)

I could've sworn that non-competes were illegal in California. States rights need to be preserved!

Re:states rights! (5, Informative)

Actually, I do RTFA (1058596) | more than 5 years ago | (#25712997)

I could've sworn that non-competes were illegal in California

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.

Re:states rights! (-1, Flamebait)

Philip K Dickhead (906971) | more than 5 years ago | (#25713015)

Free country.

right.

Lame response (5, Insightful)

Anonymous Coward | more than 5 years ago | (#25713073)

He signed the non-compete. *HE* gave away his freedom. Not the State.

The State is just going to hold him to HIS word.

Re:Lame response (2, Insightful)

Atlantis-Rising (857278) | more than 5 years ago | (#25713215)

But...but... but.. What about my freedom to tell people lies and break my word?!

Re:Lame response (5, Interesting)

ScrewMaster (602015) | more than 5 years ago | (#25713297)

But...but... but.. What about my freedom to tell people lies and break my word?!

You always have that freedom. You just aren't guaranteed to always get away with it.

Re:Lame response (5, Informative)

bennomatic (691188) | more than 5 years ago | (#25713721)

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.

Re:Lame response (2, Interesting)

Retric (704075) | more than 5 years ago | (#25713859)

I did not sign a non compete and I kept working for the company for over a year. If they want a non compete say fine I want 50% over the average for my position. Company's only have the power people give them by blindly taking their crap.

Re:Lame response (4, Insightful)

plasmacutter (901737) | more than 5 years ago | (#25713265)

He signed the non-compete. *HE* gave away his freedom. Not the State.

The State is just going to hold him to HIS word.

non-competes represent collusion within various industries in a conspiracy to remove employees' civil liberties and subject them to increased risk of improper compensation.

"industry standard" = collusion, plain and simple.

Re:Lame response (1)

moderatorrater (1095745) | more than 5 years ago | (#25713505)

If it's that big of a deal to you then don't sign it. I've known several programmers that confronted management about the non-compete and didn't have to sign.

However, non-competes make a ton of sense, at least the narrower ones which specify that you can't go to a company in direct competition with your current one. For tech jobs, knowledge is everything, and knowledge doesn't just disappear overnight. If a senior programmer where I currently work were to jump to a competitor, it would be worth millions of dollars if they could pick his brain about techniques, abilities, and which customers were dissatisfied.

Re:Lame response (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25713619)

If it's that big of a deal to you then don't sign it. I've known several programmers that confronted management about the non-compete and didn't have to sign.

However, non-competes make a ton of sense, at least the narrower ones which specify that you can't go to a company in direct competition with your current one. For tech jobs, knowledge is everything, and knowledge doesn't just disappear overnight. If a senior programmer where I currently work were to jump to a competitor, it would be worth millions of dollars if they could pick his brain about techniques, abilities, and which customers were dissatisfied.

So you're saying that a person cannot go to a higher bidder if demand/pay for their services is higher than what they are currently being offered?

Doesn't that sort of defeat the whole capitalism thing?

Re:Lame response (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25714141)

Good job.

Competition and capitalism are antithetical. As soon as any corporation achieves an absolute advantage over any other corporation for the same product, they can sculpt the market to look however they want. Likewise when employers all enter into a tacit cartel by all requiring the same non-compete agreements--essentially taking monopoly power over all hiring in a particular industry. Add the fact that such contracts are supposedly enforced by the government and you are essentially giving autocratic control of an industry to those already in charge. Free market my ass. Why don't we make IBM enforce their own contracts, instead of having the taxpayer enforce them.

Re:Lame response (0)

MrMarket (983874) | more than 5 years ago | (#25714149)

So you're saying that a person cannot go to a higher bidder if demand/pay for their services is higher than what they are currently being offered?

Not if they want to work for me. If you don't like non-competes, don't work somewhere that requires you to sign one. Capitalism is about making trade-offs.

Re:Lame response (4, Insightful)

bennomatic (691188) | more than 5 years ago | (#25713763)

If it's that big of a deal to you then don't sign it. I've known several programmers that confronted management about the non-compete and didn't have to sign. However, non-competes make a ton of sense FOR THE EMPLOYER, at least the narrower ones which specify that you can't go to a company in direct competition with your current one. For tech jobs, knowledge is everything, and knowledge doesn't just disappear overnight. If a senior programmer where I currently work were to jump to a competitor, it would be worth millions of dollars if they could pick his brain about techniques, abilities, and which customers were dissatisfied.

There, fixed that for you. If the employee is worth that much, employers should treat them well, compensate them appropriately and make them feel appreciated. There are already laws about trade secrets; a non-compete agreement is just a control mechanism which, when enforceable, gives great leverage to the employer and none to the employee.

Re:Lame response (2, Insightful)

billcopc (196330) | more than 5 years ago | (#25713769)

The problem is a non-compete effectively makes you worthless if you leave your job. What's the point in being a pro if you can't legally sell your skills to the highest bidder ?

Even if a pro jumps ship over to your competitor, all that knowledge is worth very little unless they can put it to work against you within a short time frame. That same knowledge could have been used by YOU, to fix what's wrong with YOUR company. If the clients find a better deal elsewhere, it is not because "the employee knew too much", it's because the product/service sucks and management is too stupid to fix it.

The problem with American capitalism is it has way too many exceptions throwing the game off-balance in favor of the rich losers, it's an end-run around the whole ethos.

Re:Lame response (1)

nurb432 (527695) | more than 5 years ago | (#25713895)

And time and time again, when they are unreasonable they have been struck down by the court.

While not knowing the full contact, i would venture its unreasonable and should also be struck down.

Restricting what you do AFTER you leave a company, is just plain wrong.

Inalienable (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25714075)

There are a class of rights that you can not give up. Even if you try to sign them away in a contract, you still have them, and the courts will find the contract unenforceable.

So, just because he signed it doesn't mean he has to abide by it...especially since most companies require the signing of such contracts these days....it is not like you can refuse to sign and just go work for someone else, the "someone else" will also require you to sign.

So the question is whether or not the right to hold a job is Inalienable

Re:Lame response (1)

marco.antonio.costa (937534) | more than 5 years ago | (#25714105)

On the other hand, I could argue that non-competes are unconstitutional and void since 'life, liberty and the pursuit of happiness' are _unalienable_ rights.

You can't give away your right to earn a living as a law-abiding citizen anymore that you can sign a contract that has a section that says you'll be executed by a firing squad if you breach one or another clause.

Re:Lame response (1)

aliquis (678370) | more than 5 years ago | (#25714173)

Maybe with unions you wouldn't get such stupid contracts to get a work ;)

(I think we have similar rules in Sweden though... So maybe not :D)

Re:states rights! (0)

Anonymous Coward | more than 5 years ago | (#25713127)

I would argue that to be truly free, one should have the ability to put any wacky clauses you want and it's the one it is presented to who has the freedom to tell the company to go fuck themselves.

If he did not want to be in this position, he could have told IBM no back when this was first presented to him.

Re:states rights! (1)

Mike Buddha (10734) | more than 5 years ago | (#25713341)

Yeah, because a free country means no personal responsibility.

Re:states rights! (5, Informative)

tylersoze (789256) | more than 5 years ago | (#25713071)

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."

Re:states rights! (2, Informative)

tylersoze (789256) | more than 5 years ago | (#25713157)

Pacific Employers Insurance v. Industrial Accident:

"...the full faith and credit clause does not require one state to substitute for its own statute, applicable to persons and events within it, the conflicting statute of another state, even though that statute is of controlling force in the courts of the state of its enactment with respect to the same persons and events"

Re:states rights! (2, Insightful)

Pincus (744497) | more than 5 years ago | (#25714097)

The US Constitution explictly states...

From wikipedia:

Which is the more reliable documentation?

Re:states rights! (1)

danlor (309557) | more than 5 years ago | (#25713111)

* Citation needed.

I just read Article IV again to be sure... but I don't see it "explicitly" here.

Re:states rights! (5, Insightful)

Maudib (223520) | more than 5 years ago | (#25713131)

Either way it doesn't matter. This was a federal court, not state.

Re:states rights! (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25713371)

It still matters. IANAL, however, Contract law is typically state law. Federal courts can, and often do, litigate state law claims. When they do, they must determine which state's law applies. The question here is, first, whether California's law applies, and second, whether California's law is effective against the contract.

Re:states rights! (0)

Anonymous Coward | more than 5 years ago | (#25714021)

IANAL, but I don't think it is required by law to mention that you are not a lawyer when posting a comment on Slashdot.

OT -- sig (1)

zooblethorpe (686757) | more than 5 years ago | (#25713399)

JUICHE! I think it means '42' in North Korea.

Reading your sig, all I can think of is that old disturbing Flash fanimutation, Hyakugojuuichi! [google.com] If your "juiche" is from that, then it means "11" (eleven) in Japanese. :)

The original song in the Flash video is a children's song from Japan that talks about having 111 friends, with the chorus something like "tomodachi ga hyakugojuuichi" ('friends [subj marker] 111' = 'I've got 111 friends'). The PeeWee-Herman-on-crack video version is much funnier, but I refuse to watch it again in order to preserve my sanity.

Cheers,

Re:OT -- sig (1)

PitaBred (632671) | more than 5 years ago | (#25713561)

I now hate you more than I ever thought it was possible to hate someone.

I am sending that link to as many of my enemies as possible in order to try to cleanse myself of it.

Re:OT -- sig (1)

korean.ian (1264578) | more than 5 years ago | (#25713765)

JUCHE - is the North Korean state ideology. It means "spirit of self-reliance" or "spirit of independance". It is literally everything to the North Korean people, so I can see the joke the OP is making in his sig.

Re:OT -- sig (0)

Anonymous Coward | more than 5 years ago | (#25714095)

Sounds more like the pokemon theme song. Go = 5. So it's 151, like the 151 original pokemon.

Re:states rights! (1)

Rinisari (521266) | more than 5 years ago | (#25713315)

IANAL.

Actually, CA courts ruled that the state has an interest in protecting business interests within the state. If my understanding of the Wikipedia summary of non-compete clauses [wikipedia.org] is correct, being that the individual in question, as well as his destination is in CA, CA court could claim jurisdiction.

U.S. Constitution Article I, Section 10, Paragraph 1 states No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. The Full Faith and Credit clause (Article IV, Section 1) could apply, but I don't know enough case law to know how it could be effectively applied in IBM's favor--it seems that the courts favor the less restrictive state when using it.

Re:states rights! (1)

BronsCon (927697) | more than 5 years ago | (#25713555)

If the non-compete is not legal in CA, then it may be discharged by the state of NY, as the obligation was not made legally in CA.

Re:states rights! (1)

juiceboxfan (990017) | more than 5 years ago | (#25713839)

What about the fact that Apple has a presence (Apple store, repair depot, training center) in NY?
States have successfully used this to defend charging sales tax on mail order and internet sales that originated out of state.
Couldn't IBM use a similar argument to defend their contract?

Re:states rights! (1, Flamebait)

commodoresloat (172735) | more than 5 years ago | (#25713593)

I could've sworn that non-competes were illegal in California

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.

I could have sworn that "Constitution" thing was made illegal by the Patriot Act.

Re:states rights! (1)

conlaw (983784) | more than 5 years ago | (#25713667)

Drat, I hate to give up my mod points on what promises to be an interesting discussion after the chaff is sorted from the wheat. Where do you think that you read that in the US constitution?

Re:states rights! (5, Interesting)

spire3661 (1038968) | more than 5 years ago | (#25713029)

So what, the guy cant work in his professional field anymore? I get that you want to protect your IP, but not at the cost of a very highly qualified individual's livelyhood. If Nvidia makes an infringeing part, you sue them, but you dont stop people from taking jobs. Chilling effect indeed! I have friends that would think twice about working for Big Blue now. Makes me nervous of the thought of signing your brain over to a corporation.

Re:states rights! (1)

harlows_monkeys (106428) | more than 5 years ago | (#25713269)

So what, the guy cant work in his professional field anymore? I get that you want to protect your IP, but not at the cost of a very highly qualified individual's livelyhood

RTFA

Re:states rights! (2, Insightful)

DWIM (547700) | more than 5 years ago | (#25713365)

So what, the guy cant work in his professional field anymore? I get that you want to protect your IP, but not at the cost of a very highly qualified individual's livelyhood.

I am sure a guy with his qualifications understood completely that he signed a non-compete with IBM to advance his livelihood as an employee of IBM.

I have friends that would think twice about working for Big Blue now. Makes me nervous of the thought of signing your brain over to a corporation.

An entirely understandable, reasonable response to this. I wouldn't sign with them either (unless I desperately needed the work or they waved obscene money at me or gave me some other reason to sell my soul).

Re:states rights! (1)

perlchild (582235) | more than 5 years ago | (#25713411)

It doesn't say he can't work, but it certainly makes me wonder if the goal of the non-compete clause was to protect trade secrets, or just to get to pick who he gets to work for if he leaves... Quite a few companies seem to think the latter... I can't wait to see them disabused, but I'm not holding my breath. If the trade secret, and not the contract, was the meat of the issue, the audience would show it neh?

Re:states rights! (4, Interesting)

kae77 (1006997) | more than 5 years ago | (#25713421)

This is standard corporate procedure. You work with a company, they reveal trade secrets, you sign a clause saying that you won't work in the same industry or with a direct competitor for a year. This guy was treated more than fairly. They didn't kick him to the curb, they offered him a years paid salary to sit out, and he still left the company. When you take into consideration that Apple recently dumped IBM's processors, and some lingering animosity from that, it's no wonder why IBM is being aggressive in it's approach. While I'm no fan of corporate overlords, you don't just let some high level shirt walk off with all of the trade information about your current and future plans to a competitor and sit idly by. This guy knew exactly what he was doing and decided to roll the dice.

Re:states rights! (1)

Nutty_Irishman (729030) | more than 5 years ago | (#25713875)

Or you walk into the contract negotiations with a red pen and cross out the 12 month extension beyond employment termination.

The problem with non-competes is that they are so vaguely written that it can cover pretty much any new job in the field you're trained for. Sure, you can bring it to litigation to prove otherwise, but what employer would be willing to risk taking a new employee that might have a possible contractual obligation?

Re:states rights! (0)

Anonymous Coward | more than 5 years ago | (#25713513)

If you read the NCA, it states it is in effect for a period of 12 months following termination of employment.

Unless I Miss ... (1)

Robin47 (1379745) | more than 5 years ago | (#25713547)

My guess, This is just a preliminary injunction. It's only so that discovery can take place and the judge can get the trial started. I can understand the judge wanting to hedge his bets on the outcome but let's not confuse things here. IANAL but nowhere in TA did I see anything about permanent. Sure, the possibility is there.

Re:Unless I Miss ... (1)

Anonymous Cowpat (788193) | more than 5 years ago | (#25714055)

so if it's decided at the end of the trial that the non-compete didn't apply and he was free to work for Apple, who compensates him for the lost earning whilst the temporary injunction was in place? What about secondary losses? Loss to Apple?

Re:states rights! (2, Informative)

Rinisari (521266) | more than 5 years ago | (#25713037)

You are correct, noncompete clauses are illegal in CA [wikipedia.org] . The decision could be appealed to the SCOTUS, I believe, where undoubtedly it will be reversed.

Re:states rights! (0)

Anonymous Coward | more than 5 years ago | (#25713287)

Unless you are being sarcastic, you have no idea what you are talking about. IANAL, but the court that ruled on this was the Southern District of New York. This is a contract claim which typically is governed by state law. Therefore, it is likely the court is sitting in diversity jurisdiction (i.e. the federal court can hear it because the parties are citizens of different states). Therefore, the court has to determine which state's law to apply. The contract may have a "choice of law" clause that the parties have agreed upon, but the court is not completely bound by that.

Also, they wouldn't directly appeal to the Supreme Court, but would instead appeal to the Second Circuit Court of Appeals. Wikipedia suggests that federal courts have not yet determined the effectiveness of California's restriction on non-compete clauses for people who make contracts out of state but seek employment in state. This could be an interesting case, but unless it arises more frequently, I doubt SCOTUS will chose to hear it.

Re:states rights! (1)

jlarocco (851450) | more than 5 years ago | (#25713195)

Okay, I RTFA. Where does it say anything about California?

Re:states rights! (1)

compro01 (777531) | more than 5 years ago | (#25713383)

Apple's headquarters (presumably where a VP would work) is located in Cupertino, California.

Re:states rights! (0)

Anonymous Coward | more than 5 years ago | (#25713695)

And both the contract and the applicable legal standard is...New York law.

Moreover, noncompetes are presumptively, not categorically, illegal in California. There are several circumstances in which they are enforceable, assuming they are carefully crafted only as necessary to protect trade secrets.

Re:states rights! (1)

jlarocco (851450) | more than 5 years ago | (#25713855)

So? If he signed the contract in New York, where the lawsuit was filed and where IBM's headquarters is located, then it has nothing to do with California.

Is this Dilbert or Slashdot? (4, Funny)

Sponge Bath (413667) | more than 5 years ago | (#25713047)

An executive named Papermaster?

Re:Is this Dilbert or Slashdot? (1)

Tubal-Cain (1289912) | more than 5 years ago | (#25713093)

Apple decided they wanted to start up a line of printers.

Re:Is this Dilbert or Slashdot? (1)

Kenshin (43036) | more than 5 years ago | (#25713833)

Apple actually had some pretty decent printers until they dumped that product line in the '90s.

Re:Is this Dilbert or Slashdot? (2, Funny)

ScrewMaster (602015) | more than 5 years ago | (#25713319)

An executive named Papermaster?

Just another nail in the coffin of the Paperless Office.

Re:Is this Dilbert or Slashdot? (1)

morgan_greywolf (835522) | more than 5 years ago | (#25713349)

Apple is resurrecting the LaserWriter. The new version will be an all-in-one with scanning, fax, copy and print functions. It will be called the iPapermaster and will also include integration with iTunes and the iPhone App Store.

Re:Is this Dilbert or Slashdot? (1)

treeves (963993) | more than 5 years ago | (#25713361)

Neither, it's Wernham-Hogg.

Re:Is this Dilbert or Slashdot? (1)

jollyreaper (513215) | more than 5 years ago | (#25713845)

Better that than a German tosser named Wankshaft.

Get over it IBM (0)

Anonymous Coward | more than 5 years ago | (#25713051)

Apple dumped your processors... deal with it.

And the federal judge needs to go fuck himself.

Time to get rehired (4, Funny)

sleeponthemic (1253494) | more than 5 years ago | (#25713053)

As "food and beverage technician".

Re:Time to get rehired (0)

Anonymous Coward | more than 5 years ago | (#25713475)

The funny thing about Obama is that he'll
be president for only a few years, but
he'll be a nigger all this life.

Re:Time to get rehired (0)

Anonymous Coward | more than 5 years ago | (#25714013)

But you don't have to be a racist all your life... you can repent right before you blow your brains out. Make it soon, please.

Apple can expect a lot more rulings like this one (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#25713075)

thanks to Proposition 8

Prop 8 was clearly targeted at Apple employees and customers

Re:Apple can expect a lot more rulings like this o (0)

Anonymous Coward | more than 5 years ago | (#25713557)

Bravo... Best troll ever!! *Slow clap*

Slave (2, Funny)

GrahamCox (741991) | more than 5 years ago | (#25713097)

Next, he'll be changing his name to 'squiggle' and carving 'Slave' on his face. That usually works.

What kind of an idiot... (5, Funny)

Anonymous Coward | more than 5 years ago | (#25713107)

...starts litigation against a guy named Papermaster?

NY law applies (4, Informative)

UnknowingFool (672806) | more than 5 years ago | (#25713165)

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.

Re:NY law applies (2, Interesting)

fermion (181285) | more than 5 years ago | (#25713381)

And here is the hypocrisy. Texas is a right to work state, which means that it is illegal to set up impediments that prevent a person from working. While this is narrowly interpreted, and largely intended, to prevent the workers in a free market from engaging in the same type of activities that employers do to keep profits at a reasonable level, there is no reasonable cause for such interpretation. Right to work should be right to work. No one, not the union, not the corporation, not the government, should be allowed to set up impediment for a person to seek and achieve gainful employment of their choice.

Re:NY law applies (1)

CodeBuster (516420) | more than 5 years ago | (#25713737)

Unless Papermaster has assets or other property interests in the State of New York or is a resident of that state then he could probably just ignore the orders of the NY court since this is not a criminal matter, but an issue of differing state contract laws (IANAL). Apple, on the other hand, has a very nice store in downtown Manhattan and probably has other business and financial interests in New York as well (NYSE for example). I am not sure what the repercussions of that might be, but it probably is important because it means that the State of New York, at least theoretically, has some leverage over Apple (i.e. do what our courts say or we will have to play bad cop and close the store in Manhattan and pressure NYSE to drop your listing). In terms of the relative power of states, New York probably has more power than most because of their financial capital status among other things. This probably also explains why crusading NY attorney generals, like Elliot "The Don" Spitzer and his successors, tend to get their way despite their apparent lack of actual juris-my-diction.

Re:NY law applies (1)

91degrees (207121) | more than 5 years ago | (#25713385)

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.

Seems most likely that he'd be working on developing new ipods based on the chip. Of course IBM can't be sure where he'd be working. Still seems odd that IBM would be worried. If he was working on IBM servers he probably didn't work closely enough with their chips to cause any serious risk.

Re:NY law applies (3, Interesting)

chefmonkey (140671) | more than 5 years ago | (#25713963)

Ummm... non-compete agreements are perfectly enforceable in Texas [smith-robertson.com] so long as certain requirements are met (agreed-upon timeframe, agreed-upon geographical location, agreed-upon activities). There's some degree of latitude in what those requirements are, depending on the type of job the non-compete is attached to -- I've had lawyers confirm that "worldwide" is likely sufficient qualification to meet the "geographical location" criteria in certain circumstances.

And that's ignoring that, with sufficient compensation, the "at-will" nature of employment can actually be transcended. In layman's terms, if they pay you enough, then you can agree to almost anything, and it will be legally binding. It's guaranteed not to be an issue for most people, but it can make a difference once you're playing at the "executive in a large company" level.

Re:NY law applies (1)

Spy Hunter (317220) | more than 5 years ago | (#25714125)

Do you have a reference as to how non-competes are not enforcable in Austin, TX? A cursory Google search seems to suggest that non-competes are, in fact, enforcable in Texas.

I may not fully understand non-competes... (4, Insightful)

NoobixCube (1133473) | more than 5 years ago | (#25713191)

A non-compete seems to me the perfect way to pay your best employees peanuts. If you sign a non-compete, then you're basically trapped at one company, and can never get a job in the same industry again. Using that information, your employer could pay you as little as they want and never fear you leaving for another company.

Re:I may not fully understand non-competes... (1)

Walpurgiss (723989) | more than 5 years ago | (#25713301)

I would imagine that non-compete clauses would have some kind of expiration date. It would be completely insane for someone to sign a neverending non competitive agreement in their field of expertise.

Re:I may not fully understand non-competes... (2, Informative)

TechForensics (944258) | more than 5 years ago | (#25713565)

You're right. IAAL and non-competes, to be enforceable, must be reasonable under the circumstances as to both duration and geographical area. Of course, in this case there will be an issue of fact (namely whether his specific duties are likely to result in transfer of secrets), normally resolved by a jury, but in this case due to the irreparable harm of excluding him from employment for a year, more likely to be decided by a judge on briefed motions.

Re:I may not fully understand non-competes... (4, Interesting)

digitalchinky (650880) | more than 5 years ago | (#25713881)

Some really do last a lifetime, I have a non-compete agreement in my secret 3 letter agency clause that says: "We, as in a bunch of guys with guns and the keys to all the jails and stuff, will come get you no matter where you are in the world if you don't keep your mouth shut about our government secrets until you die. If you work for someone else in the trade we might even hang you until you are dead, then put you in jail for 322 years just to make sure"

Sign the delta brief and you've signed on for life.

My choices were quite limited after resigning. People don't want to employ former spies. The best I could manage were a few low paying industrial espionage gigs. So I put ~disgruntled former spy~ in the resume and my troubles went away overnight.

Re:I may not fully understand non-competes... (1)

maxume (22995) | more than 5 years ago | (#25713325)

If you are the best employee, you don't need to sign a long term, binding contract to get a job (and most states have limits on the terms of the non compete anyway).

Re:I may not fully understand non-competes... (1)

ScrewMaster (602015) | more than 5 years ago | (#25713347)

A non-compete seems to me the perfect way to pay your best employees peanuts.

Up to a point. Smart, motivated types will either break the non-compete (as this guy may be able to do) or find something else worthwhile to do with their time. Can't keep a good man down, I say.

Competition? (3, Funny)

goodmanj (234846) | more than 5 years ago | (#25713283)

Wait, hunh? What market do IBM and Apple compete in, anyway?

Apple:
Desktop PCs
Desktop operating systems
Media Players
Phones
Artsy Pretentious Attitude

IBM:
Semiconductors
Server hardware
Point of Sale crap
Overpriced IT services for senile old corporations
Lawyer zerg rushes
B-school Pretentious Attitude

The only possible overlap was in desktop PCs, and IBM sold that division to Lenovo.

Re:Competition? (1)

konohitowa (220547) | more than 5 years ago | (#25713509)

Semiconductors.

Re:Competition? (3, Informative)

sustik (90111) | more than 5 years ago | (#25713677)

Look up: Wii, Xbox, Playstation, Websphere, Cloud computing, ...

California wants to make this difficult... (4, Interesting)

cdrguru (88047) | more than 5 years ago | (#25713335)

Sure it would be nice if such non-compete agreements could not be implemented. From what I have seen in the past it was unusual that an employer would get themselves into this situation in the first place - if a possible non-compete problem existed they just didn't bother with that applicant.

Once you start opening the door to such things, it is very difficult to just sue the company. What the non-complete may be relevent for may be something that is buried deep in the processes of the company and not at all apparent in the resulting product. And besides, that just opens the door to exploratory lawsuits because the person that got hired might be disclosing information they have no right to disclose.

This isn't just "personal knowledge" either. It is often "organization knowledge" that you have to know about in order to do your job at Company A. Upon going to Company B it is clear that if they only knew what your former employer did, they would get more sales, make products faster and cheaper, whatever.

Where some co-workers got themselves into trouble was (a) not disclosing there was a non-complete agreement in the first place and (b) trying to find out how much this knowledge might be worth to their new employer. As in "I might be able to offer some advice on how to do this better for $5000." Yes, I heard about that offer once. It was a while ago and resulted in immediate (same hour) termination of the employee.

Money grubbers (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25713353)

This is ridiculous. Papermaster gave IBM a two week notice in which he disclosed his new position with Apple. Instead of protesting at that time, IBM waits until he starts work with Apple, and THEN sues him. It looks like IBM is just hoping for an out-of-court settlement from Apple. They can't seriously believe that their blade server secrets are threatened by iPods...

Re:Money grubbers (1, Offtopic)

CodeBuster (516420) | more than 5 years ago | (#25713899)

Who says that IBM doesn't play dirty when it suits them? It wasn't so long ago when they were the Microsoft of their day after all.

Re:Money grubbers (1)

jargon82 (996613) | more than 5 years ago | (#25713917)

IBM is concerned about the new iBlade. These blade servers are similar to IBMs, except permanently glued into an apple blade chassis. Just imagine if Papermaster showed them how much more flexible removable blades would be!

Big deal (-1, Flamebait)

nighty5 (615965) | more than 5 years ago | (#25713433)

Fuck Apple.

They are trigger happy, litigating, non-compete iphone apps, trade secret party pooper mother fuckers.

I want my Think Secret back!

Its about time they get some of their own back.

Re:Big deal (1, Informative)

Anonymous Coward | more than 5 years ago | (#25713815)

They gave the ThinkSecret guy six figures to shutter the site. I'm sure he could have fought them with free EFF lawyers til the end of time, but he accepted a payout.

Trade secrets? (1)

girlintraining (1395911) | more than 5 years ago | (#25713525)

I didn't know IBM trade secrets had a shelf life of 365 days. Are the added preservatives healthy? More seriously, with a company the size of IBM... he might as well just take a one year vacation because everyone in IT is a competitor to them in some market or another. This guy will probably do just that too, since the cost of litigation is so expensive. So what IBM has effectively done then is snub Apple, at the expense of this guy's career. How very mature of them.

Counterproductive Legalese fluff... (1)

Phizzle (1109923) | more than 5 years ago | (#25713533)

From the ruling - he can not WORK for Apple, but he can be an ADVISOR to Steve Jobs. Seems like a punitive move, I do not think Mr. Papermasters compensation or contribution will diminish, although the way he gets his compensation will have a different label and channel... There really is no real way to stop someone from working for someone else if thats what they want. That said, I am sure he will bear no ill will towards IBM and not go that extra mile to screw his formal employer. IBM energy and expenses would have been betters spent on retaning their employee than trying to mess afterwards.

I dont get it (1)

renegadesx (977007) | more than 5 years ago | (#25713597)

If he was moving from IBM to Sun or from nVidia to AMD/ATi I would understand that. Please correct me if I am wrong but they are only just in the same business

IBM mostly focus on professional services and stuff that goes in the server room (servers, mainframes, storage etc) while Apple focus mostly on desktops, laptops and digital music. Both companies IMO make great products and provide good services but are mostly in two completly different markets.

In my line of work (UNIX servers) I would work with IBM and never really talk to Apple, yet when my brother calls and asks what is a good desktop for stuff like CAD and Photoshop for his uni work I point him to the Mac

IBM sold off its laptop and desktop business to Lenovo years ago so they are not really competing anymore. How is a no compete clause valid if the 2 companies are not really competing?

Re:I dont get it (0)

Anonymous Coward | more than 5 years ago | (#25713741)

most likely because of that his job deals with hardware devices which IBM does.

But from what I remember NY doesn't allow non-compete agreements either since it's a At-Will state.

Re:I dont get it (1)

renegadesx (977007) | more than 5 years ago | (#25713805)

Yes but they still dont compete

Yes NY doesn't allow non-compete agreements but California does and takes precendent in the constitution. The legality of the agreement is not in question, its weather he violated that agreement or not which I dont think he did considering IBM and Apple dont compete with eachother.

Compensation? (4, Insightful)

JakiChan (141719) | more than 5 years ago | (#25713735)

I think if a company wants to force someone not to work in their area of expertise for a year then they should be forced to compensate that person for a year. They should match Apple's compensation and benefits and the guy doesn't have to work. That seems fair.

Re:Compensation? (4, Informative)

Trojan35 (910785) | more than 5 years ago | (#25714175)

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.

gardening leave? (0)

Anonymous Coward | more than 5 years ago | (#25713831)

Hanon.. If anyone has ever been through this, one fundemental thing that has to be addressed is whether or not Papermaster was put on gardening leave and if he joined IBM during this period.

If this is not the case then the argument is fundementally flawed and will be overturned very quickly.

It Brings Meaning (1)

MrKaos (858439) | more than 5 years ago | (#25713883)

to I'm Being Managed

Slavery tag? (0)

Anonymous Coward | more than 5 years ago | (#25714023)

There you have it gentlemen. What we always knew about non-compete agreements. Slavery by another name. If you ever sign one you are a traitor to your profession, a fool and deserve eveything you get. And if your argument is that you need the money, you are a _weak_ foolish traitor too.

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