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IBM blocks Papermaster's work at Apple

November 10, 2008

Mark Papermaster — the engineer who IBM is suing for breach of a non-compete agreement after he moved to Apple earlier this month — was ordered on Friday to "immediately cease his employment with Apple" until further notice by US District Court Judge Kenneth Karas.

You’ll recall that Papermaster, a 26-year IBM veteran who worked on the PowerPC architecture and most recently worked in IBM’s blade server division, was set to replace Tony Fadell at Apple, taking over Fadell’s responsibilities for the company’s iPod and iPhone hardware-engineering teams. Fadell is reducing his work at the consumer electronics company and will from here on out act as an advisor to the CEO. Apple reported last week that it had hired Papermaster and that he was on track to get rolling at the company.

But IBM blocked the move in court by suing Papermaster (not Apple) for violating a non-compete agreement he signed in 2006 that prohibits him from working at an IBM competitor for a year after leaving the Armonk, NY-based company. 

According to New York State court documents, Papermaster began talking to Apple in January about a job and in his arguement against the IBM non-compete agreement claimed that there are "significant differences between IBM’s business (focused on large-scale machines for business) and Apple’s business (focused on consumer-oriented) electronics."

That’s a seemingly logical argument, except that Apple now plays in the PowerPC realm after buying PA Semi, which makes MPUs based on the architecture, last spring. Apple once bought PowerPC MPUs from IBM for its Mac computers. This blog, as did many of its commenters, made the PowerPC competitive point last week and wondered if Apple had more up its sleeve when it comes to future in-house chip work.

The White Plains, NY-based judge agreed when IBM disputed Papermaster’s claims, making specific point of the PowerPC architecture.

According to court docs, IBM said: "Mr Papermaster’s attempt to distinguish between ‘large-scale’ and ‘consumer’ electronics misses the point. In fact, electronic devices–large and small–are powered by the same type of intelligence, the microprocessor. And to build microprocessors, designers use, among other things and architecture such as IBM’s ‘Power’ architecture, concerning which Mr Papermaster was an IBM top expert."

Papermaster has until 4pm eastern tomorrow to submit his objections to the order and the judge has set a status conference for the matter on November 18.

This may seem like a lot of fuss for one engineer, even one with such a highly regarding reputation as Papermaster’s. But if the judge continues to uphold IBM’s non-compete argument, Papermaster could effectively be forced to sit out of the electronics industry for a year–and in our Moore’s Law driven world, a year is an awful lot of time to exclude from a career.

This case could become one for the records. If all electronics are "powered by the same type of intelligence, the microprocessor," as IBM argues, where could someone like Papermaster possibly be employed until his non-compete agreement becomes null and void next fall? 

As of 10:30am eastern this morning, Apple had not issued a public statement as to if it would help Papermaster fight the order.

What do you think? Share your thoughts on non-compete agreements, Papermaster’s situation, and IBM’s argument in the matter below.

Posted by Suzanne Deffree on November 10, 2008 | Comments (15)

January 27, 2009
In response to: IBM blocks Papermaster's work at Apple
petedc commented:

Really bad of IBM to do this to an individual. When corporates are laying off thousands and offshoring, this is the final straw. I imagine Papermaster was among those that had his IBM pension frozen or changed? I just had my pension frozen, removal of my co's 410K matching and final insult is my 401k is now worth half of what it was last year. It's absolutely amazing what the corporate world think they can get away with. I hope Mr Papermaster wins this case unwarranted as it is. Hopefully Corporate world is going to get their come upping's in the next year or so...


December 29, 2008
In response to: IBM blocks Papermaster's work at Apple
BTDT commented:

For a non compete to be valid, IBM had to have offered Papermaster some sort of compensation or other consideration for his signing the non-compete. He was already employed in 2006 so unless he received something in exchange for signing, he wins in court. Let's say, though, that IBM does win. IBM will likely have to pay his salary for a year while he sits it out. You can't keep people from supporting their families. In response to Kim's comments, sometimes you are threatened with you job if you don't sign (which of course is illegal). This is called signing under duress which is also unenforceable.


December 23, 2008
In response to: IBM blocks Papermaster's work at Apple
Ampman commented:

Non-compete agreement for engineers is not enforceable in California.


December 18, 2008
In response to: IBM blocks Papermaster's work at Apple
kim commented:

Most of these postings miss the point entirely. He signed a non-cometition agreement, then violated it. If he had no intention of living up to his end of the bargain, he should not have signed it. It does not restrict his employment to anthing other than a handful of companies. As was mentioned , if you make mopre than $20.00 an hour non-competion clauses are pretty much the norm in almost any industry..not just R&D. Just as a matter of course, you should have the backbone, and the honesty to live up to the contracts that you have signed in your life both personally, and professionally. Apple should think again about hiring anyone who has no professional honesty or integrety, as he probibly will, in a few years turn around and do the same to them.


December 4, 2008
In response to: IBM blocks Papermaster's work at Apple
Mae''''n diwrnod braf commented:

As an IBM employee, I applaud Mr Papermaster and his stand. The IBM "golden noose" is nothing more than "Restraint of Trade". By employing someone with very specific skill sets, and then to block their right to exercise that skill is at best immoral. A comparison would be to block a neuro-surgeon from working at hospital "B" after leaving hospital "A", simply because he would be practising the same procedures. This cannot be allowed to come down on the side of IBM. It has to be a basic human right to utilize the skills someone has spent time and money to gain at university, without constraint.


November 11, 2008
In response to: IBM blocks Papermaster's work at Apple
Normal commented:

It is normal for many businesses to have a non-compete clause. Even my dad had one with his concrete pumping business. BUT a business CAN NOT force someone to be unemployable. On that, there is many other jobs Papermaster could do, even if that means working at a sandwitch shop (been there done that).


November 11, 2008
In response to: IBM blocks Papermaster's work at Apple
ralph commented:

If this was all in Calif. this would be moot. In August, the CA Supreme Court re-affirmed earlier rulings that non-compete agreements are not-enforceable because they unduly restrict the rights of workers to change jobs. This is a great example. There are only minor exceptions. I wonder what would happen if Apple sued IBM in CA courts? Any lawyers out there?


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
Howard commented:

Uless a old employer secures its "non-compete" challenge by provide court with hard evidence on (1) Sufficient "trade secret" involved this employee (2)the new employer''s competition or indication on competition, I do not think it is legitimate to block an employee''s right in pursuit of his right. The point is between business competition and people''s right of working.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
Homer David commented:

Why can't IBM and Apple work together instead of trying to block each other's direction? Ahh...yes this is reality's plane old simple profit sense or do not let anyone profit from it.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
Matt Schmidt commented:

Does anyone think it funny that IBM says a job overseeing iPod and iPhone development is "competitive" to its business? I''d agree with Papermaster that there is a significant difference, regardless of the base processor technology that MIGHT be used.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
BH commented:

Why invest hundreds of millions in research when all the benefit could walk out the door when a key employee jumps ship? Apple buys a fab that makes MPUs based on the Power PC architecture and then hires away IBM''s expert on that product. This does not seem like a coincidence. Apple could have cut a licensing deal with IBM which included Papermaster. Apple chose not to that.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
IBMer commented:

IBM sucks.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
ru commented:

I totally agree with Dave. This is ridiculous. They should let Papermaster carry on his work with Apple. The markets are pretty much orthogonal. Plus, IBM has a zillion patents to protect it's IP. If Apple is found to have violated patents, then IBM can go after Apple in courts.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
Larry M commented:

Dave, where have you been hiding? Non-compete clauses are common at the executive level.


November 10, 2008
In response to: IBM blocks Papermaster's work at Apple
Dave commented:

This over the edge. To prevent someone from working in the industry they are trained in is bad for everyone. To keep him from taking trade secrets is another matter. From this is seems that once you have worked with even a resistor a company could prevent you from working for any electronics Company.

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