Noncompete

Are Apple and IBM Competitors?

November 8, 2008

Many people knowledgeable about these two companies may be surprised to learn that IBM has persuaded a U.S. District Court judge in New York that indeed, they are competitors.  The judge has enjoined Mark Papermaster, a 25-plus year employee of IBM, from working for Apple Computer.  While at IBM Mr. Papermaster was a product development executive in the area of blade servers.  After Apple engaged in an extensive, year-long interview process it hired Mr. Papermaster as the senior executive for the iPod/iPhone development team. Of course, Apple was well aware of Mr. Papermaster’s non-compete agreement with IBM, which prohibited him from working for a competitor, and I assume that it seriously considered whether it could defend a challenge of this sort by IBM.  Apple probably concluded that servers and iPods were sufficiently far apart that it would be safe hiring Mr. Papermaster.  The fact that this decision went against it highlights once again the extent to which the outcome in a case of this sort is determined by the disposition of the judge who happens to draw the case, rather than the underlying legal principles, which give the judge an enormous amount of discretion to rule either way. The Justia page for this case is here.  It appears that Justia has decided to make access to court filings in the case free of charge, and therefore the legal memoranda arguing…

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Judge Fabricant's Preliminary Injunction Decision in HRH v. Sheppard

October 28, 2008

Attached below is Judge Judith Fabricant’s lengthy decision in Hilb Rogal & Hobbs v. Sheppard, decided by Judge Fabricant in the Suffolk Business Litigation Session early this year. To my knowledge, this decision and order became publicly available only recently. This restrictive covenant case is interesting in one unusual respect: it involves what some lawyers like to call “employee raiding” – a perjorative term that one sometimes hears when a large group of employees leaves to join a new firm. Here, the group was unusually large, consisting of 24 employees who resigned en masse, leaving Hilb Rogal & Hobbs (HRH) identical resignation letters and advising HRH to contact the same lawyer in the event any legal communications were necessary. HRH filed suit and moved for a preliminary injunction, presenting Judge Fabricant with a complex set of facts (the employees did not all have the identical agreements), and factual variations in their circumstances. The decision breaks no new ground in Massachusetts noncompete law, but it’s worth making a few observations about how the Judge approached the case: Employees whose agreements were entered into in connection with a business that had been sold to HRH earlier were treated much more strictly than the “rank and file” employees, as one would expect given Massachusetts law. The Judge viewed HRH’s claim of interference with contractual relations favorably, given that the new employer offered it’s…

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Judge Gants' Decision in NERA v. Evans

October 15, 2008

One of the great benefits of the Suffolk Business Litigation Session (the BLS) is that the judges tend to write detailed opinions explaining their decisions. This tends to be less true elsewhere in the Superior Court. Recently-retired Superior Court Judge Allen van Gestel created a tradition of written jurisprudence while he headed the BLS, and his successors are keeping up the tradition. While these decisions are not published in an official reporter, and they are not binding precedent in the strict legal sense, they are often made available on the Internet, on legal search engines such as Westlaw and in the unofficial Mass. Law Reporter. In this way attorneys and the public are informed on how the BLS judges tend to see issues that come before them. And of course, any given judge is likely to be greatly influenced by a decision he or she has authored on a particular issue; there’s nothing better than citing a judge back to herself. The extensive and detailed opinion in The National Economic Research Associates, Inc. v. Evans, decided by Judge Ralph Gants in early September 2008, shows that the new BLS judges are continuing Judge van Gestel’s tradition of written decisions. In NERA v. Evans Judge Gants was asked to decide (on summary judgment) a claim that David Evans had violated a covenant not to compete with NERA, his former employer. The…

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