Judge orders I.B.M. executive to stop working for Apple immediately

Sat, Nov 8, 2008

Analysis, Legal, News

A U.S. District Court in New York has ordered former IBM executive Mark Papermaster to immediately stop working for Apple. Papermaster was recently wooed away from IBM after being offered what he described as “a once in a lifetime opportunity”.

Papermaster, a server expert and chip guru, was recently sued by IBM to prevent him from going to work at Apple. IBM asserts that Papermaster is subject to a non-compete agreement and is prohibited from working at a competing company for a year. Papermaster, however, claims that Apple isn’t a competitor to IBM to the extent that IBM does not manufacture consumer electronics. Furthermore, Papermaster joined Apple as a Senior Vice President of Devices Hardware Engineering, and will oversee its iPhone and iPod development.

In a court document filed this Thursday, Papermaster stated:

“To the best of my knowledge, IBM does not design, manufacture or market consumer electronic products. Instead, IBM focuses on high-performance business systems such as information technology infrastructure, servers and information storage products, and operating systems software.”

I.B.M., however, wasn’t buying this argument and responded:

“Electronic devices large and small are powered by the same type of intelligence, the microprocessor”.

IBM fears that Papermaster, should he work for Apple, would disclose proprietary information about IBM’s processors and server technology, helping them to develop rival products. Apple, though, states that Papermaster will lead Apple’s iPod and iPhone engineering team, and Papermaster himself noted that his new position at Apple involves “entirely different technology from what he managed at I.B.M.” He also noted that he was hired by Apple primarily for his managerial skills than for his technological expertise.

Some, however, claim that Papermaster’s new job description is merely a placeholder position/title that’s in place until Papermaster’s 1 year covenant to compete expires. And given the fact that Apple seems to have its eye on developing proprietary chips for the iPhone, it seems that Papermaster’s expertise would necessarily come into play in his capacity as the executive overseeing iPod and iPhone development.

In response to the Judges ruling that Papermaster must immediately stop work for Apple, an Apple spokesman had this to say:

“We will comply with the court’s order but are confident that Mark Papermaster will be able to ultimately join Apple when the dust settles.”

A hearing on the issues is set for November 18, and Papermaster’s lawyers have until November 11 to file any objections to the Judges most recent ruling.

Fortune has a comprehensive timeline of the IBM/Apple/Papermaster dispute which can be found here.

Interestingly, Papermaster’s bio is no longer on Apple’s website.


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15 Comments For This Post

  1. Robert Nelson Says:

    Typical IBM reaction, just another reason not to use IBM for anything. Best wishes on the appeal

  2. Television Spy Says:

    With a name like Papermaster he could get any job and girl he wanted.

  3. Teora laufier Says:


    IBM + Hitler = IBMSUCKS

  4. Daniel Says:

    Doh! How much of an idiot are you if you leave IBM and go to Apple and expect no repercussions? Papermaster… Oh dear..

  5. Tao54nyc Says:

    I’d love it if he continued to work in defiance of the court order – what would the judge do, jail him? This could be a real test case. It’ll be interesting to see if he has any cojones.

  6. Richard Says:

    Unless IBM is willing to pay Papermaster to sit at home and twiddle his thumbs, they can go to Hades.

    This is Amerika!

  7. John Says:

    When you work at IBM, you come to expect this sort of crap. I would know.

  8. slaingod Says:

    IBM did offer to pay him 1 year salary for the Non-compete. Whether that is fair or not, or whether his role is in a ‘competitive’ field related to his duties at IBM & Apple is something else entirely.

  9. Gargoyle Says:

    Are there no restriction of trade issues in the US with non-compete clauses?


    Papermaster funny name guy should be called for PenisMaster. Guy like this have brain in his dick too, shouldn’t be problem getting a new job hahaha

  11. J.T. Says:

    I’ve actually had to fight off an injunctive relief before. It’s not quite as easy as you’d think and I bet there are some interesting court room acrobatics to get a judge to see the difference between server technology and an iPhone or iPod. IBM will argue the size of the device has no relevance to the technology under the hood and how the judge interprets that kind of logic will mean everything.

    He may end up waiting a year … and so will the next line of barely upgraded but somehow just a touch slicker iPods.

  12. GR Says:

    I’m an employee myself but I can see the other side of the argument, too. A non-compete clause can be both ethical and legal. It can help protect innovative companies against predatory companies poaching staff and, therefore, intellectual property (although I’m not saying this is necessarily the case here). The employees are no doubt aware of the clause when signing the contract and typically, they are paid for the duration of the non-compete clause.

  13. erichansa Says:

    Papermaster just got served!..with a piece of paper.

  14. TV Guide Says:

    Pretty normal for a corp to have a non-compete agreement with it’s employees. Even The Goog has it.

  15. Daniel Says:

    Not surprising he got the cease and desist order. Common people, read you contracts and always contact an attorney before you quit to check the situation!

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