IBM Files Non-compete Suit Against Former Worker

By Jane McEntegart
published

IBM is filing suit against a former employee who wants to work for Dell, claiming that the new position would violate an agreement restricting his employment with rivals.

IBM’s former mergers-and-acquisitions chief David Johnson is a 27-year veteran at Big Blue. Dell has not disclosed the position offered to Johnson, but IBM doesn’t want to risk valuable information if Johnson ends up in a senior strategy position.

“Mr. Johnson has possession of valuable confidential information and cannot undertake a senior strategy position at Dell without violating his obligations to IBM,” Edward Barbini, a spokesman for IBM, told Bloomberg today. Barbini went on to say that Mr. Johnson “repeatedly received significant compensation” in return for an non-compete agreement.

The news echoes IBM’s recent suit against former vice president of microprocessor technology development, Mark Papermaster, when he tried to take up a position at Apple. A federal judge ordered Papermaster to step back from his position at Apple until the matter was resolved and it later emerged that Judge Kenneth Karas felt Papermaster’s presence at Apple could cause IBM some serious damage.

During the suit, Papermaster said that after he handed in his two weeks notice and told IBM of his plans to move to Apple, he was allowed to continue to work for two full weeks with unfettered access to all of his files and to the company’s entire computer network. Papermaster alleged that this meant the company’s claim that it would suffer irreparable harm or hardship due to ’inevitable disclosure’ of ’trade secrets’ was absurd.

Eventually a settlement was reached and Papermaster was allowed to start work at Apple once he’d been out of IBM six months. Papermaster must report back to IBM in July and again in October to certify that he has not used or disclosed any important IBM information to his new employer.

Jane McEntegart
10 Comments Comment from the forums
  • tenor77
    I've already told my story about how ridiculous some companies can be about non-compete.

    I get why companies get edgy about employees leaving the fold. How many of us know things about our company that the competition would love to have?
    Problem is, while I like my job and company, I didn't sign my contract in blood and I didn't marry my job. I should be able to stay with my current profession without having the option of leaving my company should a better opportunity come around.
    Reply
  • squatchman
    If one person is so important to the business that their lives must be made difficult if they decide to leave then there is probably something wrong with the business.
    Reply
  • Niva
    Tenor, you mean with the option of leaving...

    Sadly the companies have the right to protect their secrets, this becomes especially important in cases of major strategic positions and R&D leaders. Those people would never have the knowledge had they not worked at the company in the first place, not only that but they collected huge paychecks while on payroll. Non compete agreements typically have 6 months to a year and I think it's fully justified in the cases of senior engineers.

    Otherwise what you have amounts to industrial espionage. In cases like these tech firms a key R&D engineer crossing over could result in billions of damages to the company he/she originally worked for.
    Reply
  • ssddx
    There is a difference between safeguarding secrets and bordering on the absurd. Just because he quits for a better opportunity does not mean he is out to divulge company secrets. The man has worked at IBM for 27 years, one would think that people would respect his devotion. Even if they do not, there are other documents that he would have signed preventing the transfer of company secrets. Also, some companies seem to think that all of your experience and ideas are "theirs" since you work for them. Some even steal ideas and patents that you have created since you are an employee. The man has a right to work wherever he chooses, just as long as he does not adversely affect his old company. ie) sharing projected plans, r&d projects, salaries, marketing strategies, etc.

    The sad thing is.. If he was an entry-level or mid-level employee the company wouldn't have responded. It seems they are one of the companies that does not value the dedication he had. My 2cents.
    Reply
  • curnel_D
    The real problem is IBM is blowing through quality employees left and right.
    They've taken measures that seem to only have one goal in mind: Pissing everyone off possible.

    This is going to continue to be a problem for IBM until they come up with an employment plan that can work for it's employees. Not just the corperate guys but also the field guys as well.
    (I've stopped working with IBM completely as suplimental installations tech because they've got such piss poor attitudes about it. They went from paying decent wages to cutting me down to below avg help desk levels and harrass me if I spend more than 4 hours per install job. I'm sure you can imagine how that turned out when what they were paying was less than .1% of my income. And I know one guy who was full time with them and was layed off, so they didnt have to give benifits even after his extreme pay cuts, and then tried to invite him back after 6 months. lol, yeah right.)
    Reply
  • bill gates is your daddy
    If the former worker was going to spread IBM secrets he would most likely do it with or without employment from IBM. I find it hilarious that IBM will spend a buttload of cash to sue this guy because they are worried about him telling company secrets. Why didn't they just give the man a raise and keep him around if they were so worried? Probably would be a lot less than what they are going to spend on the lawsuit that they will most likely loose.

    IBM...stop shipping jobs over to India and focus on cleaning up your act at home. People leave IBM for a reason. (I am also an IBM ex)
    Reply
  • neiroatopelcc
    I completely understand why IBM's worried. In the past we've seen a lot of damage come from misuse of confidential knowledge by ex employees of big companies, so it's completely reasonable that they're worried. The bigger you are, the more you can lose.
    Reply
  • talzara
    There should be a legal requirement to continue full salary and benefits for as long as the noncompete period lasts. After that, the employee would get the full contracted termination benefits (including CORBA).

    This would redress the balance-of-power issues. The employer would then have a choice -- enforce the noncompete and pay up, or let the employee go.
    Reply
  • TwoDigital
    I'm confused... the article says: "IBM doesn’t want to risk valuable information if Johnson ends up in a senior strategy position."

    When did IBM develop valuable information? Maybe he knows their key strategy of sticking with Lotus Notes after the industry moves on, or how to make so-so blade servers that cost 2x more than competitors', or maybe he knows about the voodoo IBM uses to determine how they are going to provide outsourced "Global Services" that are nearly impossible for clients to leverage effectively?
    Reply
  • any idea where to find an IBM non-compete agreement?
    Reply