When Apple hired away Mark Papermaster from IBM as its new senior vice president of hardware engineering for devices, IBM struck back with a lawsuit attempting to bar him from switching jobs. Citing his non-compete clause, IBM convinced a judge to order Papermaster to stop working at Apple until the dispute was resolved. IBM even brought Papermaster’s children into it.
Well, now he can finally go make future iPhones and iPods for Apple. The two companies have settled out of court. It kind of makes you wonder why companies even bother with non-compete clauses in employment contracts, especially when they are overly broad. More often than not, they are not worth the paper they are written on.
I recently walked out on a job because of the non-compete clause. I refused to sign it. My position is a web developer and the non-compete clause stated that I could “be employed by another web design company” that is located in “Connecticut (my home state), New England, one of the 50 United States or any other country.”
like….forever?
Ah, sorry, forgot to put that part in. For two years.
my comment should have a “not” after “could”
About damn time. I wish I had two of the largest tech companies on the planet fighting over me.
@timothy. I’m banned from a certain industry for two years because of the same thing. The only difference for me is I’m done with that industry.
@ The Weakonomist, I even talked to some lawyers, and at least here in CT laws like that don’t even have legal binding. I’m not sure about other states though
If Papermaster stayed at IBM he would have been laid off by now
Haha nice
how do you know it was worthless for IBM? maybe apple had to pay them off.
Schonfeld: How do you know “they are not worth the paper they are written on” if you don’t know the settlement terms? And for example, Microsoft is famous with its predatory hiring practices; why shouldn’t intellectually valuable/expensive employees be guarded in such an environment?
Douglas,
different states have different rules when it comes to this. Michael is right on the money in this case as it most likely involves California.
The east coast on the other hand is a different story…
Luckily in California non-competes are illegal. I would not work for a company either way that forced me to sign one.
I meant to say “Eric is right…”
This case actually involves two states that don’t give much teeth to non-compete clauses – Texas (where Papermaster worked for IBM) and California.
Oh IBM, you make me smile. You destroy your quarter and silently layoff thousands. Grow a pair and tell everyone the truth: You made a shit load of money, you gave a rosy guidance and now it’s time to layoff in North America and move jobs to South America.
They say the American public is morally bankrupt.. I say the American Multi-Nationals are morally bankrupt – with IBM leading the charge.
While some states won’t enforce many non-compete provisions, they often have a strength in and of themselves regardless of what the courts might say. When a former employee is threatened with a lawsuit by her old employer before joining a competitor, the competitor won’t, in most situations, handle the cost of litigating the dispute (Mr. Papermaster excepted). As a result, the old employer can get away with enforcing a legally dubious contract because the employee will probably be intimidated by the lawyers and the costs involved.
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