Papermaster temporarily blocked from Apple job

From a legal standpoint, the case of Mark Papermaster, who Apple recently hired away from IBM as VP of device hardware engineering, is pretty fascinating. On Friday a federal District Court judge ordered Papermaster to stop working, based on a non-compete agreement he signed with IBM, in which he promised not to work for competitors for a year after leaving the company.

Now you might say a contract is a contact, but the California Supreme Court has held noncompetes invalid if they prevent someone from working in their area of expertise. What's not exactly clear is whether trade secrets suffice to permit such restraint. The California Labor and Employment Law Blog explains that in August, the state supreme court decided Edwards v. Arthur Andersen:

The Court explained that under the “plain meaning” of California Business and Professions Code section 16600, “an employer cannot by contract restrain a former employee from engaging in his or her profession, trade, or business unless the agreement falls within one of the exceptions to the rule” [referring to statutory exceptions that allow non-compete agreements in the context of a sale or dissolution of a corporation, partnership, or limited liability company].

Notably, the Court did not address the enforceability of restrictions tied to the protection of trade secrets (such as provisions prohibiting an employee from using the employer’s trade secrets to solicit customers), or restrictions against recruiting co-workers to work for a competitor.

While I'm certainly no expert here, it seems to me that IBM's trade-secrets-based noncompete on Papermaster may well be too broad. It seems that a proper ban would prevent an employee from using trade secrets to solicit customers to a new enterprise but IBM's noncompete basically prohibits Papermaster from working in the technology industry for an entire year after termination. That essentially ties him to IBM for his entire career, which clearly violates B&P 16600. (California law should control here, even though the case is in federal court.) Right now, a temporary injunction is in place. The arguments on the preliminary injunction should be interesting.