Not even remotely literally. Color had a software engineering division. These employees worked for that division. Apple acquired the division. These employees still work for that division. (They have the same option to leave during or after the acquisition as they did before the acquisition.)
The difference between doing things this way and individually hiring the employees amounts to both parties getting to ignore any non-compete agreements the engineers may have signed, and a simplification of the paperwork involved for each employee brought over this way. (At the expense of a single set of additional paperwork for the acquisition itself.)
It boggles my mind that people either don't understand this (or simply don't know what "literally" means), but feel the need to make broad, unfounded, rediculous statements anyway.
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Given that they supposedly had a $41M initial round of venture capital, if they aren't actively sinking, they certainly seem to be taking on a lot of water. 😀
Erm... I know exactly what 'literally' means.
Apple didn't buy the company - none of its products or fixed assets were of value. What was valuable were the people. If those people didn't want to move and quit, the division would have no value. Those people don't belong to the company; they have no obligation to remain with that division.
Apple is quite literally paying for the people. It's their personal qualities and talents that give the division such a high value. Like I said, if it were me I'd want some personal reward for my personal contribution to that sales price. I think that would be much, much fairer than the alternative.
Actually, your notion that non-compete agreements are valid in California is 'rediculous'.
Wikipedia said:
Non-compete agreements are automatically void as a matter of law in California, except for a small set of specific situations expressly authorized by statute. They were outlawed by the original California Civil Code in 1872.
Exceptions - valid non-compete agreements in California
There are limited situations where a reasonable non-compete agreement may be valid in California.
1. If an owner is selling the goodwill in their business.
2. When there is a dissolution or disassociation of a partnership.
3. Where there is a dissolution of a limited liability company.
None of those special situations apply here. In fact, several SV companies (including Apple) have been investigated for so-called "anti-poaching agreements"; essentially gentlemen's agreements that have the same effect as a non-compete. These practices are extremely detrimental to employees and the economy in general (like anybody needs less freedom to find work). They're illegal almost all over the globe.
As regards exception #3 (
here), it expressly states that these you must agree to a non-compete "upon or in anticipation of a dissolution of, or the termination of [your] interest in, a limited liability company"
Anyway, it isn't my problem. Would that it were.
