Judge Orders Apple's New Hire to Stop Work

[ridgezin]

Non-competes signed in another state are rarely enforceable for employees working within California. There are many examples of non-California companies losing these cases in the California courts. I used to work for a Fortune 500 company based in New Jersey. They insisted that all employees at all sites sign their standard non-compete agreement, drawn up by their New Jersey-based lawyers. Pretty much everyone in California knew that it wouldn't apply to them (even the HR folks admitted it) but they were required to sign it anyway. So, is the employee being unethical for signing an agreement that they have no intention to honor, or is the company acting unethically for asking their employees to sign a contract that they know is illegal? I put a greater burden on the companies in this case. They should know better. A good friend of mine was sued by this large, NJ-based company after he left them and went to work for a Silicon Valley startup. He was successful in his defense, although I suspect that the company will not change its practices.

These so-called "right to work" laws are a critical engine for an innovative incubator like Silicon Valley. There is no doubt that we wouldn't have such a fertile ground for development of new business in Silicon Valley if not for the prohibition of non-competes. Individual companies may not like it, but it's unquestionably good for the economy as a whole. You are still prohibited from revealing any confidential or proprietary information from your previous employer, but you cannot be barred from working in your field.

Here's a website with some information about California's laws
http://www.donnerlaw.com/contracts.htm

 

[BenRoethig]

IBM might be able to force the suit in New York, but I don't see how a New York court can have jurisdiction over a California employment law.

California, Texas and other states are "Right to work" states. One employer can not prevent a former employee from making a living no matter what they signed as a condition of employment.

I would think that under New York law, IBM might be able to prevent him from working for a competitor in New York. But how can they prevent him from working for a company in California.

Doesn't the state courts jurisdiction end at the state border?

In a civil case, perhaps, but if they defy they NY judge, he/she could issue a bench warrant for contempt of court. Trust me, its not in Apple's best interests to have your newest executive taken away in handcuffs.

 

[JAT]

It doesn't take much of an imagination to see the problems if employers could write up anything as a non-compete and have it be ironclad. All employees would basically become indentured servants.

This seems to be the prevalent thinking in this thread, but it is completely incorrect. Because, see, it doesn't happen like this. Doom and gloom and the universe ending....yeah, right. It's an employment contract that he agreed to. It's perfectly legal to have these agreements and it prevents some fishy business practices, which I'm guessing you guys would also rip into if some industrial espionage was the news item of the day.

And what was his compensation in return for this agreement? Millions, I presume. People working at Taco Bell for $10/hr don't sign NCAs, this is a practice for experts in certain fields and high-end executives. What, IBM is holding down the little man? Gotta fight back? Gimme a break. I'm betting he's already gotten a check from Apple that's larger than my yearly salary.

I seriously doubt this will be held up, as it doesn't sound like competition is really an issue, more like IBM is whining. But how about people relax?

 

[dagger01]

Are you kiding?!?!

what if you were ibm and your top guy leaves for a similar company after he had signed a non-compete?

i dont know how people can take apple's side on this to be honest as the job would on some level be "competeting" with ibm. tends to happen when you are an expert/specialist in a topic

Non-compete clauses are ridiculous horse hockey! "Oh, sorry, you can't work for a competitor because you know too much, ergo, you need to wait at least a year before working with someone we deem a 'competitor' to our products." PUH-LEASE! If you were that good to begin with you didn't need the company you were working for. A company doesn't own me because I work for them and if they think they do they can kiss my lilly white, furry butt! Besides, if engineers have to sign a non-compete clause, why don't marketing people? Hmmm, funny how that works. Effing, BS!

NO COMPANY OWNS ME OR MY BRAIN, NOR ANYTHING MY BRAIN COMES UP WITH WHILE I WORK FOR THEM.

IBM can suck it! Their employees are not slaves!

P.S. My father worked for IBM for more than 40 years (1966 - 2007). Oh, and he got screwed by them on more than one occasion.

There's my $0.02 on this issue.

 

[dagger01]

No!

In a civil case, perhaps, but if they defy they NY judge, he/she could issue a bench warrant for contempt of court. Trust me, its not in Apple's best interests to have your newest executive taken away in handcuffs.

Ummm.no. Bench warrants only work in criminal, not civil, cases. Nice try.

 

[Sun Baked]

Non-compete clauses are ridiculous horse hockey! "Oh, sorry, you can't work for a competitor because you know too much, ergo, you need to wait at least a year before working with someone we deem a 'competitor' to our products." PUH-LEASE! If you were that good to begin with you didn't need the company you were working for. A company doesn't own me because I work for them and if they think they do they can kiss my lilly white, furry butt! Besides, if engineers have to sign a non-compete clause, why don't marketing people? Hmmm, funny how that works. Effing, BS!

NO COMPANY OWNS ME OR MY BRAIN, NOR ANYTHING MY BRAIN COMES UP WITH WHILE I WORK FOR THEM.

IBM can suck it! Their employees are not slaves!

P.S. My father worked for IBM for more than 40 years (1966 - 2007). Oh, and he got screwed by them on more than one occasion.

There's my $0.02 on this issue.

Not all of them are bad, since some of them actually include pay for the period they tell you not to work. If that is the case it isn't too bad.

Here, go on a 1-2 year vacation from this business. And gives you a chance to do something else.

However, non competes when you sell a business are typical and normal and keep people from cherry picking their old employees and starting a competing business within days/

 

[MacViolinist]

Non-competition agreements are different from NDAs. Several people on this thread have conflated the two. These are not the same things.

Non-competition deals are things that people almost invariably force down your throat after you've already been on the job for a while. Don't sign, get fired; sign, and you get to keep your job.

This is coercion into a contract and it makes the practice legally questionable at best. You have to remember that contract law assumes that both parties to a contract are on somewhat equal terms. And employer-employee relationship is not a somewhat equal relationship.

Courts are hesitant to render contracts unenforceable based on fairness, but they do so from time to time.

So far, courts are ruling that non-competes are not enforceable contracts. The non-competition agreement is an instrument designed to keep people from working if they depart from a given company.

This would be sort of reasonable if it were restricted to people who left for other companies. But then it's also redundant, because NDAs already cover that. Restricting people who are fired or laid off (not that this is the situation with Papermaster) from pursuing opportunities in the same industry . . . that's insanity.

I hope that IBM pursues this all the way to the Supreme Court. If they do that all the non-comps in the nation will be invalidated. But I don't think this will happen. I think IBM is just looking for a little cash. Hopefully, Apple will take this situation and help all of us out by not settling.

 

[dukebound85]

Non-compete clauses are ridiculous horse hockey! "Oh, sorry, you can't work for a competitor because you know too much, ergo, you need to wait at least a year before working with someone we deem a 'competitor' to our products." PUH-LEASE! If you were that good to begin with you didn't need the company you were working for. A company doesn't own me because I work for them and if they think they do they can kiss my lilly white, furry butt! Besides, if engineers have to sign a non-compete clause, why don't marketing people? Hmmm, funny how that works. Effing, BS!

NO COMPANY OWNS ME OR MY BRAIN, NOR ANYTHING MY BRAIN COMES UP WITH WHILE I WORK FOR THEM.

IBM can suck it! Their employees are not slaves!

P.S. My father worked for IBM for more than 40 years (1966 - 2007). Oh, and he got screwed by them on more than one occasion.

There's my $0.02 on this issue.

you obviously are clueless to how the real world operates, especially the part i bolded

PS: I dont care what your father did as it doesnt give you any credibility

 

[LethalWolfe]

This seems to be the prevalent thinking in this thread, but it is completely incorrect. Because, see, it doesn't happen like this. Doom and gloom and the universe ending....yeah, right. It's an employment contract that he agreed to. It's perfectly legal to have these agreements and it prevents some fishy business practices, which I'm guessing you guys would also rip into if some industrial espionage was the news item of the day.

Actually the legality of non-compete agreements is up for grabs and in CA they aren't legal at all. I'm in favor of reasonable IP protection (NDAs, trade secret protection, copyright laws, etc.,) and I'm in favor of an individual's right to work. Employers shouldn't have carte blanche to decide when and where their former employees can seek employment. IMO Papermaster should be allowed to work at Apple and if IBM-owned IP starts showing up in Apple products Papermaster and Apple should be held accountable if an independent investigation finds evidence of wrong doing.


Lethal

 

[gnasher729]

Non-compete clauses are ridiculous horse hockey! "Oh, sorry, you can't work for a competitor because you know too much, ergo, you need to wait at least a year before working with someone we deem a 'competitor' to our products." PUH-LEASE! If you were that good to begin with you didn't need the company you were working for. A company doesn't own me because I work for them and if they think they do they can kiss my lilly white, furry butt! Besides, if engineers have to sign a non-compete clause, why don't marketing people? Hmmm, funny how that works. Effing, BS!

German law is quite simple: The company can put anything into their contract, and it is enforceable, _as long as they pay reasonable compensation_.

So if they want you to work for MacDonalds flipping burgers for a year after you leave, that's fine, as long as they pay for the difference in salary, plus a good bit on top to compensate for the fact that after a year you will have lost experience in your real job. Which means such contracts are very, very rarely enforced, and if they are, you don't mind too much.

With a law like that in place, IBM could absolutely stop the guy from working for Apple, but it would cost them real money. Most likely he would up getting the same pay for doing nothing if IBM insists.

 

[BenRoethig]

Well, it looks like its a Federal Judge who issued the order, so the CA-NY stuff is moot. Federal rulings supersede state law, so if the district court rules that he is indeed in violation of the no-compete clause, its binding.

 

[barijazz]

Steve Jobs - "I'll make him an offer he can't refuse".

 

[twoodcc]

wow, i didn't realize this was such a big deal. i hope they can get this worked out. this guy must be good, considering how bad apple is going after him

 

[jmann]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5F136 Safari/525.20)

I love how confident Apple is.

 

[JAT]

Actually the legality of non-compete agreements is up for grabs and in CA they aren't legal at all. I'm in favor of reasonable IP protection (NDAs, trade secret protection, copyright laws, etc.,) and I'm in favor of an individual's right to work. Employers shouldn't have carte blanche to decide when and where their former employees can seek employment. IMO Papermaster should be allowed to work at Apple and if IBM-owned IP starts showing up in Apple products Papermaster and Apple should be held accountable if an independent investigation finds evidence of wrong doing.


Lethal

You really don't grasp the concept of signing something, do you? Try reading the rest of my post, now.

 

[frankly]

thats a consequence when you sign a non-compete. should have told ibm he had an offer before hand and used it as levergae to possibly get a higher salary at ibm lol

I hope that this lawsuit finally makes those types of contracts illegal. A company could effectively stall a person's career using those stupid clauses. If IBM can prevent you from taking a new job with anyone that they deem to be competition and they also refuse to increase your salary and/or benefits to match what you could make elsewhere how can this possibly be legal?

I have seen companies exercise these clauses even when they fire the person. I'm sorry but how can it be legal for a company to prevent you from earning a living? Are you supposed to start a new career?

what if you were ibm and your top guy leaves for a similar company after he had signed a non-compete?

i dont know how people can take apple's side on this to be honest as the job would on some level be "competeting" with ibm. tends to happen when you are an expert/specialist in a topic

Did you ever stop to think that perhaps we are taking the employee's side of this? Put yourself in his shoes. What if you had his job and you wanted to leave IBM? Are you an indentured servant to IBM for the rest of your life just because you are good at your job?

once again, you cant be serious....

when you sign something saying you cant compete or whatnot, then you are agreeing to it. if you dont like it, dont work there. otherwise be prepared to suffer the consequences legally

You can't be serious, can you?

Once you choose to work for someone are you supposed to work there or nowhere else? Don't you think that ANY company that you wanted to work for would be a competitor since you would be looking for a job using your base of knowledge?

 

[sirgant]

So this guys name is papermaster and he's having problems with an agreement? Hmm...

 

[frankly]

what people are missing in the article and the case is the guys who is leaving IBM is not a floor wiping, toilet cleaning guy... He is one of the top executives, and has very important trade secrets in his experience within the company...

NON-COMPETE laws at certain levels can be made 100% legal for certain period of time!

Think of it this way, you are a GENERAL of The Army, and you quit your job to Join Russian Army, how is that sound?

Sounds a bit extreme right, and you can say it is a different story, well it is different story but same principal... if you get it...

I wouldn't say it sounds extreme. I would say it sounds ridiculous that you would use that as your analogy. Give me a break.

It is also ridiculous that you think that the higher the level the person is the more enforceable this contract should be. Please tell us exactly what this guy is supposed to do if he wants to stop working for IBM. According to your logic he has to either work for IBM or be unemployed. That is patently ridiculous.

The US company I work for has consistently and 100% successfully sued every employee who signed a non-compete, left the company and then violated the terms of that non-compete. They DO hold up in court. We've won at least a dozen in court, and had at least that many cases settled in our favor before going to court.

Depending on the specific terms of the contract, IBM can at the very least keep this guy from holding a key position at Apple for whatever length of time the contract stipulates.

This is probably due to your company having vastly superior legal resources as compared to the poor ex-employee that just wanted to start a new job. I've seen that happen where people will just decline offers because they can't afford to defend themselves.

Just because your company won doesn't mean they were right.

This seems to be the prevalent thinking in this thread, but it is completely incorrect. Because, see, it doesn't happen like this. Doom and gloom and the universe ending....yeah, right. It's an employment contract that he agreed to. It's perfectly legal to have these agreements and it prevents some fishy business practices, which I'm guessing you guys would also rip into if some industrial espionage was the news item of the day.

And what was his compensation in return for this agreement? Millions, I presume. People working at Taco Bell for $10/hr don't sign NCAs, this is a practice for experts in certain fields and high-end executives. What, IBM is holding down the little man? Gotta fight back? Gimme a break. I'm betting he's already gotten a check from Apple that's larger than my yearly salary.

I seriously doubt this will be held up, as it doesn't sound like competition is really an issue, more like IBM is whining. But how about people relax?

I'm sorry but you're wrong here. This is not limited to people making tons of money. This is common practice in software development jobs as well and most people in that field do not have enough money to simply take 6 months to a year off just because they want to change jobs.

 

[frankly]

Not all of them are bad, since some of them actually include pay for the period they tell you not to work. If that is the case it isn't too bad.

Here, go on a 1-2 year vacation from this business. And gives you a chance to do something else.

However, non competes when you sell a business are typical and normal and keep people from cherry picking their old employees and starting a competing business within days/

Define some, because from my experience I would say that less than 1% off something like that.

 

[frankly]

You really don't grasp the concept of signing something, do you? Try reading the rest of my post, now.

Wow, do you actually think that if you sign something you are bound by it, even if it is illegal?

 

[bradl]

You really don't grasp the concept of signing something, do you? Try reading the rest of my post, now.

Actually, Lethal is right:

http://news.slashdot.org/article.pl?sid=08/08/08/1335253

Plus you should try reading some of the cases against Amway/Quixtar in California and other states, especially regarding non-compete clauses. The State Supreme court ruling trumped the non-compete IBM has, regardless of what they signed with any employee.

IBM is seriously going to be on the losing end of this, especially if this lawsuit was filed in California.

BL.

 

[LethalWolfe]

You really don't grasp the concept of signing something, do you? Try reading the rest of my post, now.

You really don't grasp the concept of non-compete clauses being illegal in CA do you? Or the fact the employer is limited in the restrictions that they can legally apply? If a judge finds a non-compete to be 'unreasonable' then it can be ruled illegal.


Lethal

 

[dukebound85]

Did you ever stop to think that perhaps we are taking the employee's side of this? Put yourself in his shoes. What if you had his job and you wanted to leave IBM? Are you an indentured servant to IBM for the rest of your life just because you are good at your job?

um yes i did. doesnt mean hes right

he signed a non-compete and as such going to a company that MAY be considered a competitor, he is asking for legal trouble

and this is for the courts to decide isnt it

You can't be serious, can you?

Once you choose to work for someone are you supposed to work there or nowhere else? Don't you think that ANY company that you wanted to work for would be a competitor since you would be looking for a job using your base of knowledge?

if you dont like the terms of employment, dont work there. no one made him work at ibm did they? notice how i bolded terms of employment for you. let that sink in......

understand that?

once again this is for the courts but to anyone who think ibm would just stand by after getting top talent taken away is on something, esp if a non compete clause wa there


PS: try to use the multiquote feature (the "+ button at the bottom right of each post)

 

[frankly]

um yes i did. doesnt mean hes right

he signed a non-compete and as such going to a company that MAY be considered a competitor, he is asking for legal trouble

and this is for the courts to decide isnt it



if you dont like the terms of employment, dont work there. no one made him work at ibm did they? notice how i bolded terms of employment for you. let that sink in......

understand that?

My point is that I don't think they are legal, and many courts have agreed. What is the employees option if they work in an industry where all employers use these? Are the options then to simply not work at all or to be enslaved to one particular company?

It isn't as black and white as you'd like it to be and your answers seem to point to you never having seen one of these contracts. It appears that you don't work in the type of industry where these are commonplace.

It must be nice to live in your pollyanna world.

 

[dukebound85]

It isn't as black and white as you'd like it to be and your answers seem to point to you never having seen one of these contracts. It appears that you don't work in the type of industry where these are commonplace.

It must be nice to live in your pollyanna world.

oh i do and have, being an engineer and all. in fact i probably see the reason from a company's viewpoint more now because i see the need for them in a sense