Apple rivals wield anti-compete lawsuits to fight executive flight
Apple's competitors are trying to enforce non-compete clauses in court as a way of preventing executive talent -- and maybe valuable intellectual property -- from flowing in Apple's direction.
At least two high-level industry executives hired away by Apple lately have beem slapped by ex-employers with charges of breaking non-compete pacts. Mark Papermaster, sued by IBM this month, follows Michael Fenger, who got hauled into court by Motorola in July.
IBM is now trying to stop Papermaster, a Power chip and blade server guru, from taking a job as a technology advisor to Apple CEO Steve Jobs.
Motorola reacted less immediately, filing its suit against Fenger in Illinois fully four months after the former Motorola mobile phones exec started his gig as Apple's VP of global iPhone sales.
Meanwhile, in the US District Court for the Southern District of New York, IBM now argues that as one of 300 members of IBM's "elite Integration & Values Team," Papermaster is "privy to a whole host of trade secrets and confidences" related to IBM's development of processor and server products.
According to IBM's complaint, Papermaster resigned from IBM on October 21, saying that his job at Apple would start in November.
IBM lawyers contend that Papermaster's plans run counter to non-compete terms in his IBM contract that prohibit him from working for competitors for a year. Papermaster is also banned from soliciting other IBM employees to move to a company for a total of two years, the court document said.
As for Fenger, Motorola's suit alleged that he received "millions of dollars in cash, restricted stock units, and stock options" in return for inking an agreement not to work for a competitor for two years after leaving Motorola.
The Motorola case purported that Fenger "cannot perform his duties for Apple without inevitably disclosing Motorola's trade secrets."
In February of 2008, the month when he did leave Motorola, Fenger sold his home in Boca Raton, FL for $3.2 million, according to an article in the real estate journal BlockShopper. Fenger then started his new post at Apple in March.
Motorola took Fenger to court in July, during the same month as Apple's launch of the pioneering iPhone 3G and App Store.
Meanwhile, Apple is rumored to be eyeing Papermaster's knowhow for projects ranging from enterprise-class server hardware to Power processors for small devices.