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Papermaster ordered to halt work with Apple

updated 09:10 pm EST, Sat November 8, 2008

Papermaster forced to stop

Apple's newly-hired iPod chief has already been ordered to step down from his position until further notice, Reuters reports. A US District Court judge for New York state has declared that because Mark Papermaster may be in violation of a non-compete agreement with his former company, IBM, he must "immediately cease his employment" with Apple. Apple's management has agreed to abide by the decision for now.

The judge, Kenneth Karas, has stated that Papermaster can file an objection by Tuesday. A separate hearing has been scheduled for November 18th.

IBM claims that under the terms of its NCA, Papermaster agreed to avoid working for a competitor for a year. Papermaster's lawyers have argued that a year without work in the electronics industry would be "incredibly damaging to his career," and that the Apple position is a "once-in-a-lifetime 'dream job.'"

Papermaster has also suggested that Apple and IBM do not compete with each other, at least not in an area related to his chip design expertise, and that he was not hired because of his technical knowledge. Comments from Apple CEO Steve Jobs, however, have indicated that Papermaster could be called upon to use knowledge of chips to help guide iPod and iPhone development, if not participate directly.




by MacNN Staff

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Comments

  1. jameshays

    Joined: Dec 1969

    +3

    Once In a Life Time

    Unfortunately, he did sign a contract. Dream Job or not, he's bound by law if they do in deed find his new position at Apple to be in a competitive position. At this point, I think it all comes down what he signed.

    I've signed many of these contracts and they all suck. Some suck worse than others and have many more restrictions. If a year outside of the tech industry would be detrimental to his career, he should have thought of that before he signed the dotted line.

  1. Roger@MacNN

    Joined: Dec 1969

    +3

    Re: Once In a Life Time

    That's a fair point, but at the same time, I doubt they would've let him go with severance if he declined. Might've been worth the tradeoff in retrospect...

  1. dimmer

    Joined: Dec 1969

    +1

    At will

    Most every company in the Bay Area employs under the "At will" clause: so you can quit when you want (or be fired when perhaps you don't) and the right to make payday is above reproach.

    The only item really to be questioned is whether the guy took trade secrets with him to his new employer; which doesn't look likely.

    Nice Talking Heads reference though.

  1. testudo

    Joined: Dec 1969

    -1

    Re: Once in a lifetime

    That's a fair point, but at the same time, I doubt they would've let him go with severance if he declined. Might've been worth the tradeoff in retrospect...

    How does 'severance' come into play? Usually these agreements are signed prior to employment, not when you leave.

    And even if it was when he left, if he was leaving IBM for Apple, he never would have signed an NCA just to get a lousy severance package anyway.

    So what it all comes down to is the wording in the agreement, how broad is it and how big of a swath of work does it cover.

  1. testudo

    Joined: Dec 1969

    -1

    Re: at will

    dimmer, a lot of states, I believe, have 'at will' employment. But that doesn't mean anything. Companies still go through the CYA hoops before they fire anyone, to keep from being sued for wrongful termination. (This is why so many firms want to use contractors. It is so much easier to dump a contractor than an employee).

    And they certainly are more likely to want certain prospective employees to sign NCA so they don't get all your knowledge, then go and join some start-up that can now bypass the entire design phase and go straight to implementation.

  1. Guest

    Joined: Dec 1969

    -1

    dimmer

    "The only item really to be questioned is whether the guy took trade secrets with him to his new employer; which doesn't look likely."

    you dont have any strong point in your comments mate, all your talking is based on your love towards apple... you cant make a fair judgement...

    Papermaster was not some guy who was wiping toilets and cleaning the floors at IBM... "He was one of the main architects of PowerPC designs... Since then, he has authored many papers on chip design and is generally regarded as one of the leaders in the chip design field." quoted from some other places...

    Now tell me now about your stupid point (it is really stupid of you to still insist on him being employed by Apple since it acquired Arm processor design company. And not hard to see the lie to put a top chief in chip designer to put in front of ipod designs only, tell me that you believe all this bullshit?)

    NON-COMPETE aggrements in deed should be enforceble for certain type of jobs with certain trade secrets, and that is what happening now. You train someone in a unique field of industry and a competitor (small or big does not make any difference) hires him... and tells taht we ll put him into toys devision. Only crows and dumbs will believe in this lie...

  1. slider

    Joined: Dec 1969

    +3

    NC Just Sucks, But....

    I really hate these things, but I'd wager this guy has been in the hiring role and that he's at the very least threatened to enforce this with employee's looking to leave.

    And, IBM really does have a valid concern, sure the job he's taking does not really deal with what he was doing, but the fact that Jobs says he could "help guide" could be subjective, and once at Apple, what's from keeping Apple (and him) from doing some internal restructuring, nothing. Companies often reneg on promises made to employees if it serves the company, the employee has the option to accept this or leave the company.

    IBM may even be willing to let him go if they can get certain enforceable guarantees put in place by the court, ie not dept. head change for him and an explicate stipulation that Papermaster go nowhere near Apple's processor design group.

    I can't really feel bad for the guy, I'm sure he's been well compensated by IBM over the years and likewise Apple has offered him a very impressive package. It's all a give and take, if you were at a lower tier in the company, you probably wouldn't have to deal with a court injunction, but you'd probably be getting paid less.

  1. dimmer

    Joined: Dec 1969

    +1

    Actually

    I'm taking my opinion from California State Law: in CA, you cannot stop someone from taking gainful employment. No if's, and's or butts about it. The only exception is trade secrets (as I said), and there's no evidence of that going on.

    As a former IBM and Apple employee, I have none of the stated "love"; as a former employer I do have a very good idea of what is legal or illegal in CA.

  1. Guest

    Joined: Dec 1969

    -3

    dimmer

    u know laws, but u dont seem to understand. how are you so sure that trade secrets will not be transferred. steve jobs is well known playing around people to misdirect them. Apple bought high performance low energy chipmaker very recently, and the guy is one of the top in its field as well.tell me that he will work for toy department and will have a very narrow focus in where he will work?what more evidence are you looking for? it is not hard to see the direction of apple now and what will come in the future.there is no ifs or ands or buts maybe but exceptions can be made for certain fields and not so hard to see why.also not hard to see your love towards apple although you say you dont.

  1. dimmer

    Joined: Dec 1969

    +1

    Know

    So, you accept that I know the laws involved, but don't think I can understand? Interesting point of view.

    If IBM wish to claim that trade secrets are being shared it's up to them to prove such an allegation.

    You may wish to take an English 101 class or at least find a keyboard with a shift key before you make u-self look even dummer than u jus tdid.

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