Apple has poached five key engineers from A123 Systems to work in a new battery division at the Cupertino technology company, with some hires possibly going as far back as June, a new report claims. The battery maker claims that these hires violated agreements it had in place to prevent them from joining competing companies.
The employees the report refers to are Don Dafoe, Michael Erickson, Indrajeet Thorat, Mujeeb Ijaz, and Depeng Wang. Three of these workers—Erickson, Thorat, and Wang—were PhD project heads working on new battery technology. Ijaz headed up the System Venture Technologies Division, which oversaw work by all four of the others.
After these employees left the company, A123 has been unable to find leaders qualified to take over for them and their respective projects are essentially dead in the water. The company says it found emails on work computers between its former engineers and Apple’s talent acquisition staff, leading to the conclusion that the workers had been poached.
A123 Systems has filed a lawsuit against Apple and its former employees, saying that its former engineers breached their non-compete contracts, while claiming Apple had engaged in “unfair competition,” among other charges.
As noted in the image above (taken from the company’s home page), A123 Systems creates “advanced energy solutions” tailored toward, among other things, vehicles. It’s certainly an interesting development, given recent rumors that Apple is developing a car, and has poached Tesla employees to help with the project.
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How is this Apple’s fault? Didn’t they just pay a settlement because of non-compete agreements?
Apple is supposed to ask whether or not those people had a no-compete clause in their contract. So unless those people lied, it’s Apple’s fault.
Since the courts have made no-poaching agreements illegal, A123 Systems doesn’t have a legal leg to stand on.
Courts rarely uphold non-compete contracts.. Even then, it’s almost always when the individual goes to a DIRECT competitor..
Since Apple is not ‘currently’ in automotive battery / energy market.. and can easily claim it’s for current or future phones, computers or tablets… It’s very unlikely A123 Systems will win this case.
No the employees are supposed to turn down the offer and not enter into discussions with the other party. The employee contracts aren’t Apples business.
That said, the argument will be whether they are even in competition. I doubt A123 has a leg to stand on and in all likelihood, unless they offer very high pay they might find themselves struggling to attract highly skilled workers if they start going after people who have decided to make a career change.
I think the blame lies with the employees, if they head-hunted, they are supposed to deny offers based on their non-compete status.
Damned if you do, damned if you don’t.
Not sure why Apple is getting the blame for offering these people jobs. If anything, people with PHD’s should be smarter than to exchange potential job offer emails with a competing company on work computers. Still, sounds like A123 is looking to cash in here. On the plus side, if Apple did hire them for a new battery division then let’s hope battery life improved dramatically in the next devices that may Incorporate such technology.
“joining competing companies” – apple hasn’t entered into that industry yet so technically they aren’t competing.
Um, people can work wherever they want.
Um, no they can’t if they signed a non-compete agreement (usually covers a relatively short period of time, say a year) with their former employer.
Apple isn’t in direct competition.. they don’t make cars, batteries or other energy products that sell to other manufacturers..
Non-competes are almost always limited to DIRECT competition.. so unless 123A can prove Apple is a direct competitor to their market (car energy products sold to car manufacturers) … they have very, very little chance of enforcing a non-compete..
The word “non-compete” is in-it-self descriptive of the nature of the contract.. meaning DIRECT market competition must be proven to uphold the contract.. lol
Apple would have to be a company that directly creates and sells car energy generation products.. they DONT.
Lots of people here are just pulling stuff out of their arse. A non-compete clause may be quite broad or quite specific or narrow. It really depends on what contract signed by the employees say. It does not necessarily limits to “direct competition”. So people here should stuff making stuff up or making assumptions.
California courts will not honor a non-compete agreement. Suits like this come up all the time, and though different states handle it differently, California, where this is taking place, has consistently ruled that non-competes are not enforceable, even if you go into competition, regardless of what an employee may have signed, so long as you are not using proprietary information. So if Apple uses A123’s proprietary information that these employees took, they could still keep the employee but could not use that information. Other states have their own precedent, like limiting a “reasonable” amount of time or geographical distance.
If the employees violated their non-compete agreements (will be interesting to see if a judge thinks Apple is a direct competitor to A123), then that’s on the employees, but has nothing to do with Apple as far as I can see. There may be more to it of course, but based on the scant info in the article that’s the only conclusion I can draw.
I am confident that the employees in question had a lawyer look at these purported agreements and have concluded that they can move ahead without issue. Of course, A123 is free to disagree and ask a judge to decide. Although it is an issue between A123 and their terminated employees, it would be surprising if Apple didn’t now offer to help these employees with free legal council.
I think they’re ok. Apple is not a direct competitor to A123. It’d be shocking if a judge interpreted the law such that the employee couldn’t work in their field at all and instead became an indentured servant due to such a contract. If A123 wants something like that, they can continue to pay the employees without obligating them to work for the duration of the agreement. A year is a long time without pay.
A123 Systems would have had to “compensate” the said employees in order for the non-compete agreement to be enforceable. Without knowing the details of the agreement it is almost impossible to know which side has a leg to stand on.
Actually, non-compete agreements ARE enforceable in most of the states if they are reasonable. California is an exception in that it doesn’t enforce such agreements. If Apple knew that 123’s engineers had non-compete agreements and attempted to entice them to come work for Apple, it is possible that it would be on the hook for their breaches. Without knowing what exactly the emails showed and the specific language of the non-competes, it’s impossible to say who’s right and who’s wrong here.