Former IBM exec gets green light to work for Apple

Mark Papermaster, target of noncompetition suit, cleared to start April 24

Mark Papermaster, the former IBM exec who was blocked by a federal court from working at Apple last year, will start his new job April 24 -- six months after he left IBM, according to terms of a settlement made public today.

As part of the agreement, Papermaster, a 26-year veteran of IBM who resigned in October to take a senior position at Apple, must swear at two different times this year that he has not disclosed or used any IBM trade secrets.

Papermaster was barred from working at Apple in early November 2008 -- just days after he took a job running the company's iPod and iPhone engineering group -- when a federal judge ruled in favor of his former employer. IBM claimed that a noncompetition agreement Papermaster signed in 2006 prevented him from working for rivals for a year after leaving the company.

A week, later, Papermaster countersued IBM, arguing that the noncompetition agreement was unenforceable.

In its statement today, IBM couched the agreement as a win, stressing that Papermaster would not be allowed to work for Apple until a six-month period has passed since he left. "IBM and Mr. Papermaster have now agreed on a resolution of the lawsuit under which Mr. Papermaster may not begin employment with Apple until April 24, 2009, six months after leaving IBM, and will remain subject thereafter to all of his contractual and other legal duties to IBM, including the obligation not to use or disclose IBM's confidential information," the company said.

For its part, Apple said that Papermaster will take his spot as senior vice president of devices hardware engineering in April, and that he will report to CEO Steve Jobs.

Jobs, however, is on medical leave until late June. In his stead, Chief Operating Officer Tim Cook is in charge of the day-to-day operations at Apple.

Papermaster will take the position left open by the departure of Tony Fadell, a senior vice president who has been credited with jump-starting the company's iPod business. Fadell remains with Apple as an adviser to Jobs, at an annual salary of $300,000.

Twice after his start date, Papermaster will be required to sign a declaration in which he swears under penalty of perjury that he has not disclosed any confidential IBM information, nor intends to. The first such declaration must be given to IBM in the first half of July, the second in the first half of October.

The legal wrangling between IBM and Papermaster revealed some of Apple's recruiting process. In papers filed with U.S. District Court Judge Kenneth Karas, Papermaster said Apple had approached him in January 2008 and, after talking with him about an unspecified position, offered him a position developing computer hardware. He declined the offer.

Last September, Apple again contacted Papermaster, which led to more meetings with Jobs and others in early October. "The job at Apple is a once-in-a-lifetime opportunity," his lawyers said as they worked to counter the eventual injunction.

IBM had argued that Papermaster was hired at least in part because of his expertise in microprocessor design and said that he knew of "highly confidential IBM trade secrets" that would "irreparably harm" his former company if he was allowed to work for Apple.

Papermaster will take over the engineering of two of Apple's three revenue pillars. In the quarter that ended Dec. 31, 2008, Apple sold 22.7 million iPods and 4.4 million iPhones. Together the two devices contributed 45% of the revenue Apple earned in the last quarter.

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