IBM Posts $3M Bond To Put Papermaster On Hold
What does it cost to hold an employee’s future on ice? IBM reportedly has paid $3 million in exchange for a preliminary injunction stopping Mark Papermaster from joining Apple.
Last week, Federal District Court Judge Kenneth M. Karas determined Papermaster, a 25-year veteran of New York-based IBM cannot join Apple as the Cupertino, Calif. firm’s senior vice president of hardware engineering.
Along with granting the preliminary injunction, the New York judge required IBM to post a $3 million security bond to ensure any losses by Papermaster while the court challenge is underway. Before the injunction, Apple had announced Papermaster’s hiring and set a salary.
Federal Court Rule 65(c) states such security bond must be set by the judge in order to “pay the costs and damages sustained by any part found to have wrongfully enjoined or restrained.”
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Court Blocks Papermaster from Starting Work at Apple
At issue is the validity of a noncompete clause Papermaster signed in 2006. IBM considers Apple a rival. If Papermaster’s move to Apple is permitted, he would lead Apple’s hardware development, including the iPod and iPhone.
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