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.”
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.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
6 responses to “IBM Posts $3M Bond To Put Papermaster On Hold”
Damn. What’s IBM afraid of? Their ever-fading relevance?
Ummm…. In exactly which markets do Apple and IBM compete? I don’t think any IT shop considers Apple’s 1U device a serious contender for replacement of IBM Blades, and I can’t see an IBM Blue Genie Touch device anywhere in the near-term market pipeline. Is there a VM Nano coming soon? Websphere Shuffle anyone?
Free Papermaster from the the Armonk Puppetmasters!
Is it just me or is IBM going through a LOT of trouble over this?
What in the hell are they so scared of anyway?