(Reuters) – Attorneys for a former Apple Inc (AAPL.(O) executive on Tuesday, and will try to convince a skeptical judge and a basic idea of the tech startup culture – that staff members in the planning of a competing business whilst still in employment.
FILE PHOTO: The Apple Inc. the logo can be seen hanging at the entrance of the Apple store on 5th Avenue in Manhattan, New York, New York, USA, October 16, 2019. REUTERS/Mike Segar/File Photo
Apple’s lawsuit against a former chip executive-turned-rival will have an impact on employees throughout California who want to strike out on their own, and make it to the start-ups who drive the tech business and the culture.
California’s long-standing public policy favors the mobility of workers, in contrast to the states in which it is possible to create a strong, non-compete agreements. This attitude has allowed for the “treacherous eight” who have their jobs at Shockley Semiconductor Laboratory, a rival in the late 1950s, and eventually led to dozens of companies, including Intel Corp. (a). (INTC.D).
Apple filed the lawsuit in Santa Clara County Superior Court against Gerard Williams III, who is in the business last year after more than nine years as the chief architect of the custom processors that power iPhones and iPads to begin with, Nuvia Inc., which is designing chips for servers.
Judge Mark H. Pierce, last week issued a preliminary ruling allowing the case to proceed, but to block Apple from seeking punitive damages. Pierce will have to decide after a public hearing on Tuesday whether to make his decision shall be final.
Apple is being sued Williams in August, and to know that he has been an infringement of an intellectual property rights agreement and a duty of loyalty to the company, it plans to have a new start time at Apple, spending hours on the phone with colleagues, which ultimately is also a member of the company.
Apple declined to comment on the matter. Through a spokesman, Williams declined to comment. Apple is not suing Nuvia herself, or one of william’s co-founders, and not rely upon any of the intellectual property and trade secret theft.
According to a copy of Williams’ contract, which is with Apple at the complaint, the contract required that Williams is “not a plan, or take part in any other work,” which is competing with Apple, or is directly related to the company’s business.
In a filing in November, Williams said that Apple’s contract was unenforceable because the California law allows employees to be able to make some preparations to compete while still maintaining their current job.
Even in California, there are limits, said Cliff Palefsky, a prominent San Francisco-based employment lawyer. The employees are there any plans for a competitor in their own time, but with the recruitment of fellow employees, during working hours, but it is a bit of a risk.”
In its preliminary statement, Pierce said that “a person is not allowed to make plans and to prepare for the creation of a competing business prior to termination, if the employee is doing the employer’s time and using the employer’s resources.”
The case is likely to hinge on the specific facts of Williams’ planning, Nuvia, Palefsky said. In view of the fact that it is the job of the modern-tech jobs are rarely sticks to traditional hours of work, it can be difficult to disentangle whether the calls were made during the company’s time or personal time.
“The sense that you are not going to compete – it brings a very interesting question as to whether (the Apple contract), it is contrary to public policy, and the question of whether the court is going to enforce it,” he said. “This is going to be a number of ground-breaking things one way or the other.”
The court has set a trial date.
Report by Stephen Nellis in San Francisco; Editing by Peter Henderson, Rosalba O’brien, Paul Commented