Judge tells Apple exec to stop work

Judge tells Apple exec to stop work

Summary: The court of public opinion is now in session.On 4 November 2008 Apple hired IBM PowerPC expert Mark Papermaster to replace Tony Fadell, its outgoing SVP of the iPod division.


The court of public opinion is now in session.

On 4 November 2008 Apple hired IBM PowerPC expert Mark Papermaster to replace Tony Fadell, its outgoing SVP of the iPod division. Papermaster accepted the position as Apple's senior vice president of Devices Hardware Engineering after a 25 year stint at IBM.

Reuters reports that U.S. District Court judge Kenneth Karas ordered that Papermaster "immediately cease his employment with Apple Inc until further order of this court" because he might be violating a one-year non-compete agreement he signed with his former employer, IBM.

ComputerWorld's Seth Weintraub reports that Papermaster agreed that he will not (within 1 year of termination) “engage in or associate with (a) any ‘Business Enterprise’ or (b) any significant competitor or major competitor of the Company…”. Since it probably wouldn't be too much of a stretch to call Apple a "significant" or "major" competitor, the agreement would appear to be iron clad.

BTL's Larry Dignan asks the pertinent question: exactly how binding is a non-compete agreement? Does the fact that IBM manufacturers microprocessors prevent Papermaster from working at any company that uses such chips? While I'm definitely not a lawyer, that interpretation may be a little over-reaching if it precludes him from earning a living.

If you really want to jump into the fray, BTL has posted Papermaster’s reply (PDF) to IBM’s original suit, Big Blue’s reply (PDF) and the judge’s call (PDF).

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Topics: Apple, IBM

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  • Non-competes never stand up in court.

    The rights of the individual are held higher than those of the corporation. I have discussed this with several HR departments. Generally they ask people to sign them knowing they cannot enforce them.

    Its a matter of livelihood. You cannot infringe on someones method of earing income. By saying you cannot work in the industry you were trained and have experience in for one year.. you violate his right to work.

    On top of those issues, often people who do abide by these types of contract, just live off the state, thus placing the burden on the state. Another reason why states invalid such contracts.
  • RE: Judge tells Apple exec to stop work

    I've gone thru a similar event early in my career. While I wasn't a senior exec, I had a non compete contract with my employer. I was hired away by a client, and my prior employer tried to enforce the contract. Given that the state I was in, was a right to work state, the contract would not have stood up; however we came to an agreement between the two companies which gave additional business to my old company. Wonder if IBM and Apple would think of such an arrangement.
  • If he had been terminated ....

    I would argue that if he had been involuntarily terminated (fired, layed off, down sized, whatever) then he would have a leg to stand on and IBM would have no recourse but to pay him a year's earnings. Since he left voluntarily for his benefit all bets are off. It's not like the poor guy is a starving billionaire with no marketable skills!
    • Left Voluntarily


      You said "It's not like the poor guy is a starving billionaire with no marketable skills!" But that's the point, he has marketable skills, that is why Apple hired him. What the court is telling him that he cannot market those skills. He can only go into an unrelated field and hope the company doesn't "compete" in some way. So, if the court wins, then he has no marketable skill. In one year's time, those skills would be dated. IBM's position is that Mark Papermaster is "not keeping his promise". They keep indicating "promise" never once did they mention legal obligation. The judge is a New York, district court judge, is his ruling fully binding in California? It seems like he is not allowed to work for Apple in New York but if he moved to California, would it still be binding?
  • Ridiculous

    Where is Apple a "significant" or "major" competitor of IBM? How do Apple's server sales compare? Where else do they compete, or are they likely to compete? The whole idea is silly.