Court Tells Ex-IBM Exec to Stop Working for Apple
Papermaster has been told by a New York federal court that he cannot work at Apple
By: Maureen O'Gara
Nov. 12, 2008 11:00 PM
Well it appears that non-compete agreements may carry a bit more weight in New York than they do in California - at least to a judge right down the block from IBM headquarters.
Steve Jobs' pick to run Apple's iPod and iPhone development has been told by a New York federal court that he can't work there.
Mark Papermaster only started working for Apple last Tuesday and on Friday Judge Kenneth Karas told him to "immediately cease his employment with Apple Inc until further order of this court."
IBM, Papermaster's former employer, got the temporary injunction it was looking for when it filed suit late last month trying to hold Papermaster to his non-compete pledge that he wouldn't go work for a competitor without a year's sabbatical.
Papermaster was IBM's top PowerPC expert and, according to Armonk, one of the 300 executives who address the most important issues facing IBM.
Big Blue basically told the court he's a walking security risk because he knows all its secrets - its strategic plans, marketing plans, product plans, long-term business opportunities and trade secrets - and can't be trusted not to use or disclose those secrets "for his own benefit and the benefit of Apple."
Oddly enough, IBM did not escort Mr. Papermaster out of the building when it found out he was determined to go to Apple but continued to let him work through the transition with full access to its IP for two weeks. It did however block any sales of his stock options.
IBM appears to be afraid of Papermaster coupled with Apple acquisition PA Semi, the fab-less semi start-up that Apple bought in April that's got a low-power dual-core 64-bit PowerPC derivative that only needs something like 4W-7W to run at 2GHz.
Although it's unclear Apple would ever wants to pursue PowerPCs again having thrown them over for Intel - and Papermaster says he won't be managing PA "assets" or be "responsible for developing the microprocessors that are used in iPod and iPhone products" - IBM seems to object to Papermaster getting near anybody else's microprocessors for any reason.
Papermaster argues that IBM and Apple haven't been competitors since IBM sold its PC unit to the Chinese and that being force to sit on the sidelines for the next year would work a "severe hardship" on him particularly in his economic environment.
He told the court that "Aside from the divested IBM personal computer business and a single sale several years ago of Apple's Xserve product to a university, I do not recall a single instance of Apple being describes as a competitor of IBM during my entire tenure at IBM."
Papermaster was with IBM for 26 years, virtually all that time in MPUs and servers, his last job there being VP of blade development.
He told the court the Apple job was a "once in a lifetime opportunity" and since IBM does high-performance business system and Apple does consumer goods, he's not violating his non-compete.
IBM wants a permanent injunction enforcing the non-compete. The next hearing is scheduled for next Tuesday, November 18.
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