I.B.M. loses its apples

I.B.M. Sues to Block Executiveâ??s Move to Apple – NYTimes.com

SAN FRANCISCO â?? I.B.M. sued one of its top executives on Thursday in an attempt to prevent him from taking a position at Apple.

The company said that the executive, Mark Papermaster, who until last week had been manager in charge of the companyâ??s blade server business, had signed a noncompete agreement with I.B.M. that would prevent him from accepting a job with a competitor until one year after leaving I.B.M.

From the article, it sounds like nothing more than posturing because I.B.M. does not have a leg to stand on if Mr. Papermaster works in California for Apple.

The California Supreme Court, this summer, affirmed longstanding public policy in the state not to allow such non-compete agreements.

“[I]n 1872 California settled public policy in favor of open competition, and rejected the common law â??rule of reasonableness,â? when the Legislature enacted the Civil Code. … Today in California, covenants not to compete are void, subject to several exceptions discussed briefly below. … Also, Noncompetition agreements are invalid under section 16600 in California even if narrowly drawn, unless they fall within the applicable statutory exceptions of sections 16601, 16602, or 16602.5.” Edwards v. Arthur Andersen LLP, 44 Cal.4th 937, 945, 189 P.3d 285,288 (2008) (emphasis added).

Those exceptions are: (1) 16601 – with regard to selling a business (does not sound like he sold a business);16602 – with regard to a partnership (does not sound like he held a partnership with I.B.M.); and 16602.5 – applies to members of an limited liability company (L.L.C.).

I wonder if this is just a shot across the bow to make sure Apple is careful not to use any trade secret info its new employee might have gotten from I.B.M.