Docs show Apple failed to find ideal successor for iPod chief

[AppleInsider]

A series of statements made in court filings by tentative iPod & iPhone chief Mark Papermaster and those who recruited him at Apple show that the company at first considered him a secondary pick. They also reveal that IBM's own management has partly contradicted its stance on whether the executive could leave.

Apple's frustrating search

The filings were submitted to the Southern District New York court to take the various parties' interpretation of events relating to IBM's lawsuit, which accuses Papermaster of breaching the non-compete clause in his contract by leaving to head up Apple's mobile devices group.

A statement by Apple Human Resources VP Danielle Lambert reveals that the Cupertino, Calif.-based firm had started searching as early as October of 2007 for 'iPod father' Tony Fadell's replacement. Apple quickly grew frustrated as it unsuccessfully tried to find a candidate with experience in consumer electronics, and ultimately made concessions to its strategy five months later, when it became clear an ideal candidate wasn't in view.

"We interviewed numerous individuals with backgrounds in consumer electronics," Lambert wrote in court filings. "Although several of the people we interviewed possessed the technical skills necessary to understand the complex design of the iPod and iPhone, they lacked the managerial and leadership skills necessary to lead such a large and extensive undertaking. Moreover, in many cases we did not believe that the candidates would fit into Apple's culture."

Instead, the company decided to investigate generalists who happened to be a good cultural and managerial fit, and turned to its Senior VP of Macintosh Hardware Engineering, Bob Mansfield, for recommendations; he named eight candidates.

In late January 2008 email exchanges conducted just before the interview process began, Mansfield had Papermaster near the bottom of the list. While the two worked together on IBM's POWER technology years ago, Papermaster was described in one of messages as being "a long shot" in "every other way" outside of his knowledge of semiconductors. The indication put him on the relative backburner along with candidates who were strong but whose particular conditions likely ruled them out, such as one already leaving for another job or who were already valuable to Apple where they were at the time.

In fact, Apple quickly questioned how Papermaster's predominant experience with servers could translate to iPhones and iPods, and even suggested personally to the former IBM exec that he might be better developing Macs -- an offer he declined.

An email from Mac hardware chief Bob Mansfield to Human Resources lead Danielle Lambert on candidates for Fadell's successor.

It wasn't until September that Apple rekindled its interest and decided that Papermaster's "dynamic personality" and leadership was distinctive enough to overcome any short-term lack of understanding. Unintentional pressure from the then IBM exec, who had been tentatively offered a new position inside IBM, forced Apple to show its hand with an offer that Papermaster ultimately accepted on October 10th, a full year after Apple had begun its search.

IBM's response

The ensuing word of Papermaster's acceptance drew mixed reactions at IBM, according to Papermaster's own observations, and allegedly weren't as uniformly clear as his former employer would have the court believe.

On breaking the news to IBM the night of October 13th, Papermaster says IBM Senior VP Rodney Atkins had no objections to his departure other than hoping he could stay; even when Papermaster brought up the subject of non-competition, Adkins didn't contest the matter.

"Adkins told me that he was disappointed, but understood, and wished me well," the potential Apple employee recalls.

IBM Senior VP of Human Resources Randall MacDonald also purportedly made no mention of non-competition two days later and had only taken to creating a last-minute job offer that would hopefully persuade Papermaster to remain onboard. Seeing Apple as a "once in a lifetime" chance, Papermaster says he turned it down and claimed not to be interested in the financial incentive IBM had to offer.

But on October 20th, when MacDonald called again, the tone had suddenly changed. The HR official presented a second unsuccessful offer but waited until afterwards to say that he believed Papermaster violated the non-competition part of his contract based on a rough salary guide that included Apple in the same list as IBM. He was also asked what effect joining Apple would have on his family, which "shocked" him as it suggested he hadn't taken that into consideration before announcing his departure.

The about-face is also reflected in court statements from Adkins. Where Apple is confident Papermaster won't use IBM experience for mobile devices as he was mostly involved in servers, Adkins goes on to assert that its former worker's experience with POWER, and its presence in small devices, could be used against IBM in shipping products.

Apple's new recruit also has confidential knowledge of IBM's broader strategy, he adds.

IBM's punishment and Apple's incentives

And while it's already known that IBM has chosen to preemptively punish its former executive for the alleged violation, the filings make the full extent of this known. The New York IT giant made no attempts to keep Papermaster from confidential information but saw fit to block not only existing Restricted Stock Units of his that are worth about $122,729 but also 25,758 stock options previously owed to him as part of his contract, the combination of which would be a serious blow to his financial plans.

Papermaster also warns the court that IBM's "expansive" version of its non-competition agreement could imply that any technology company qualified as a rival and so would rule him out for working anywhere in his field until at least a year later. That could well result in no employment at all if he's forced to sit by the wayside and may have burnt his bridges at his former employer, according to his statement.

"Given that I am an electrical engineer by education and have spent the last two decades as a manager of engineers and professional technical executives, I have little chance of obtaining meaningful employment if IBM's broad interpretation... is accepted," he says. "Given the events that have transpired, I cannot imagine returning to a job at IBM."

Through Lambert, Apple agrees and states that Papermaster is forbidden by law from revealing confidential IBM information even if it became relevant to its work.

If he's forced to give up those stock benefits to make the jump to Apple, however, the Papermaster is known to have been offered significant benefits at the Mac maker to soften the blow. Aside from the specific terms of the deal, which remain a secret, Apple notes that his relocation costs could potentially involve coverage as much as six months of interim living costs, provide help in selling his old home, and even offer as much as a $30,000 bonus for quickly selling his old home.

Mark Papermaster's acceptance letter from Lambert outlining his compensation and relocation package, as well as conditions.

Relevant declarations in PDF format

AppleInsider is making available a few of the relevant court declarations in PDF format:

Danielle Lambert's declaration: includes Apple's long-term strategy to replace Fadell, the narrowing down of candidates, and Apple's position on why Papermaster isn't violating a non-competition agreement.

Mark Papermaster's declaration: The new hire's view account of events, including his history with IBM, what he believes he had access to and how it might relate to Apple, and the hiring process with Apple as well as IBM's reaction. Also includes possible relocation package terms and the one patent he sought to keep rights to when joining Apple.

Rodney Adkins's declaration: His personal and IBM-level views of Papermaster's role within IBM and what knowledge he has that could potentially harm IBM's business.

[ View this article at AppleInsider.com ]

[SpamSandwich]

Good lord... isn't AI putting itself in legal jeopardy by posting documents from an open legal case? I would think Jobs would want to destroy whoever leaked these documents.

[hmurchison]

Wow imagine how Danielle Lambert felt writing that up. She may as well wrote

"Mark ...here's my husbands job...enjoy"

[anantksundaram]

Originally Posted by SpamSandwich

Good lord... isn't AI putting itself in legal jeopardy by posting documents from an open legal case? I would think Jobs would want to destroy whoever leaked these documents.

Given that it's gone to court, wouldn't it all be public anyway, sometime soon?

[aplnub]

A little more thought could have went into this move on everyone's part... dirty laundry never smells good...

[monstrosity]

Somebody's been rooting through infinite loop garbage!
Interesting and revealing stuff.

[SS3 GokouX]

Wow, even the letter used the official Apple typeface… Awesome.

[JeffDM]

Originally Posted by SpamSandwich

Good lord... isn't AI putting itself in legal jeopardy by posting documents from an open legal case? I would think Jobs would want to destroy whoever leaked these documents.

When do depositions get released to the public? I thought that sort of thing was open to the public except when the judge can be persuaded that it's too sensitive for public availability, and I get the impression that the bar required for sealing these documents is pretty high.

[Synthetic Frost]

Based on everything I've read about this case, I still feel that Adkin's claims that Papermaster broke his contract is questionable...

Personally, it looks very much like Adkin just has a personal grudge against Jobs, and Apple for whatever reason, and is taking it out on his own (former) employee. What troubles me is how he, a person so high up in the industry's ranks, doesn't seem to care at all about the families affected by his own petty revenge.

[sgntscrawn]

Originally Posted by SpamSandwich

Good lord... isn't AI putting itself in legal jeopardy by posting documents from an open legal case? I would think Jobs would want to destroy whoever leaked these documents.

Once documents have been discovered in open court they are on the public record and any individual can get access, usually accompanied with an administration fee. Parties can request whole or parts of documents to be not disclosed if they reveal confidential business information - which is why you'll see none of the other candidates' names nor Papermaster's offered salary.

At least that is the position in Australia (I'm a law student here), but I think its much the same in the States.

[AISI]

Originally Posted by anantksundaram

Given that it's gone to court, wouldn't it all be public anyway, sometime soon?

Yep, that's what justia.com is for.

[Haggar]

While some people are trying to make Papermaster look bad by arguing that he broke the law, these documents suggest that Apple was actively soliciting and recruiting Papermaster while he was still working at IBM. But do the people blaming Papermaster say anything bad about Apple? Of course not.

[THT]

Originally Posted by hmurchison

Wow imagine how Danielle Lambert felt writing that up. She may as well wrote

"Mark ...here's my husbands job...enjoy"

If you take Apple's PR about her and her husband's departure or defocussing from Apple at face value, I'm imagining she was jubilant. Top level management is a 60-70 hr per week job, and from the looks of it, Apple is even moreso than that. If they have a young children, I can very easily see them making a decision to concentrate on family rather than work.

[Rayz]

Mmm .... I wonder why he wasn't interested in working on the Macs?

[nvidia2008]

Originally Posted by SS3 GokouX

Wow, even the letter used the official Apple typeface… Awesome.

Originally Posted by monstrosity

Somebody's been rooting through infinite loop garbage!
Interesting and revealing stuff.

Cool! At least I'm not the only person that finds all of this juicy, particularly the Apple HR hire letter!

"...You will report directly to Steve Jobs..." *gives me the shivers*

Seriously though, around the world, I wonder how non-compete clauses are/are not enforced.

I've been on some before, and I am currently perhaps violating one with my previous jobs. A very, very grey area...

[nvidia2008]

The issue seems to be the verbal account:

On breaking the news to IBM the night of October 13th, Papermaster says IBM Senior VP Rodney Atkins had no objections to his departure other than hoping he could stay; even when Papermaster brought up the subject of non-competition, Adkins didn't contest the matter.

"Adkins told me that he was disappointed, but understood, and wished me well," the potential Apple employee recalls.

Which is far different from IBM's fairly serious litigation and "punishments" in progress with regard to this matter.

This is one of the reasons why I am highly allergic to the big corporate world.

These kind of things... Just seem like a waste of time and money to everyone concerned.

IBM should go back to its servers, and Apple get on with the business of kickass stuff. End of story.

[meelash]

Originally Posted by nvidia2008

Cool! At least I'm not the only person that finds all of this juicy, particularly the Apple HR hire letter!

"...You will report directly to Steve Jobs..." *gives me the shivers*

Seriously though, around the world, I wonder how non-compete clauses are/are not enforced.

I've been on some before, and I am currently perhaps violating one with my previous jobs. A very, very grey area...

Seriously! I want to know who #5 is on the potential hire list and which company is it that has "several other" that are "off-limits"?

I would think Google, but even with their fledgling phone-ish business, do they have several exec-types that know phone hardware?

What hardware company does Apple have enough respect/fear of that they would not consider hiring their employees?

[meelash]

Originally Posted by meelash

Seriously! I want to know who #5 is on the potential hire list and which company is it that has "several other" that are "off-limits"?

I would think Google, but even with their fledgling phone-ish business, do they have several exec-types that know phone hardware?

What hardware company does Apple have enough respect/fear of that they would not consider hiring their employees?

Oh, wait! Maybe it's Intel or Nvidia? I guess that would make the most sense...

[nvidia2008]

So it's not just me that thinks some of this whole non-compete stuff is a big pile of doo-doo nobody really wants to deal with, it's just there for the most part, in the business world, around the world, as a scare tactic.

There are probably relevant cases of blatant non-compete violation and conflict of interest, but you know, Apple iPod and iPhone, IBM Servers... Common sense...?

I mean, IBM and Moto were the ones that EPIC FAILED in the CPU/GPU department, when it came to how it could have been an integral part of Apple's success post PowerPCG4.

Man, IBM is totally harshing the vibe...

[monstrosity]

My name was originally on that shortlist, but they said I was overqualified for the job.

honest gov

[nvidia2008]

Originally Posted by meelash

Seriously! I want to know who #5 is on the potential hire list and which company is it that has "several other" that are "off-limits"?

I would think Google, but even with their fledgling phone-ish business, do they have several exec-types that know phone hardware?

What hardware company does Apple have enough respect/fear of that they would not consider hiring their employees?

Originally Posted by meelash

Oh, wait! Maybe it's Intel or Nvidia? I guess that would make the most sense...

Sony, SonyEricsson, Samsung, HTC, Nokia, HP (if hire had worked on HP handhelds). To me, that's the obvious ones.

It's all about the mobile phone and netbooks. Nobody really thinks much of "MP3 players" as they are nowadays, in the "big corporate world".

Oh, Research In Motion is a big no-go zone

[nvidia2008]

Originally Posted by monstrosity

My name was originally on that shortlist. But they said I was overqualified for the job.

Yeah, also your non-compete clause mentioned that you could never, ever, ever, to the end of time, touch any Apple product once you left your old job.

Oh, restraining order as well, in your non-compete clause. You can forget about getting to within 30 miles of Cupertino, and when purchasing anything from a retail Apple Store, you can only step in by one foot. Thank goodness they have those wireless credit card processing things!

Also I've seen your chaperone, which is required whenever you travel anywhere east of Chicago in longitude.

In fact, I read on a rumour site that all your emails with the word "Steve" are automatically replaced to be "S**** from A**** is a poopoohead". Regardless of their last names. Not just work emails, they've got court orders for Gmail, Yahoo etc. Any email account you have. In perpetuity. Filtered.

That's why when your boss sends you an email, like

DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS
DEVELOPERS DEVELOPERS DEVELOPERS

It says:
FROM: S***** from A**** is a poopoohead

Not too bright, your boss.

[nvidia2008]

Originally Posted by meelash

What hardware company does Apple have enough respect/fear of that they would not consider hiring their employees?

A lot, nowadays. Fear is the basic nature of the human condition. Fear and survival. Instead of rocks they just carry Blackberrys nowadays.

[EyeNsteinNo]

Number 1 on list (name omitted) and the type of stated qualifications for the job.....
sounds like Doug Houseman would be the right person.

[monstrosity]

Originally Posted by nvidia2008

It says:
FROM: S***** from A**** is a poopoohead

Not too bright, your boss.

This is indeed correct! hehe

[monstrosity]

Originally Posted by meelash

Seriously! I want to know who #5 is on the potential hire list and which company is it that has "several other" that are "off-limits"?

I tried filtering the image on the off chance there were remnants of information to decipher the names. But no luck, sorry.

[meelash]

Originally Posted by nvidia2008

Sony, SonyEricsson, Samsung, HTC, Nokia, HP (if hire had worked on HP handhelds). To me, that's the obvious ones.

It's all about the mobile phone and netbooks. Nobody really thinks much of "MP3 players" as they are nowadays, in the "big corporate world".

Oh, Research In Motion is a big no-go zone

Why would Apple have a problem taking their people? I think it would be someone Apple has or hopes to have a good relationship in the future. I don't think Apple cares about any of those companies enough to care about a little bad blood. Definitely not more than IBM and obviously they got past that...

[Steven R Wilson]

I can't believe no one in this thread has brought up the CA Supreme Court case where they ruled that Non Compete clauses were unenforceable in the state, even if the employee and or employer in question were out of state and the employee was moving to CA to work.

That should pretty much end this case right there. This whole court case is just a waste of time and already settled law.

[solipsism]

Originally Posted by Steven R Wilson

I can't believe no one in this thread has brought up the CA Supreme Court case where they ruled that Non Compete clauses were unenforceable in the state, even if the employee and or employer in question were out of state and the employee was moving to CA to work.

That should pretty much end this case right there. This whole court case is just a waste of time and already settled law.

• http://en.wikipedia.org/wiki/Non-com...ot_enforceable

"The preeminent court decision discussing the conflict between California law and the laws of other states is Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881 (1998). In Hunter, a Maryland company required that its Maryland based employee agree to a one-year non-compete agreement. The contract stated that it was governed by and to be construed according to Maryland law. A Maryland employee then left to work for a competitor in California. When the new California employer sued in California state court to invalidate the covenant not to compete, the California court agreed and ruled that the non-compete provision was invalid and not enforceable in California. Business and Professions Code Section 16600 reflects a "strong public policy of the State of California" and the state has a strong interest in applying its law and protecting its businesses so that they can hire the employees of their choosing. California law is thus applicable to non-California employees seeking employment in California."

[BenRoethig]

Originally Posted by Rayz

Mmm .... I wonder why he wasn't interested in working on the Macs?

Probably wanted to try something new and exciting. The guy had been working on the computer side for a couple decades. A high level corporate executive is already set for life, so he probably wanted a challenge.

Originally Posted by Steven R Wilson

I can't believe no one in this thread has brought up the CA Supreme Court case where they ruled that Non Compete clauses were unenforceable in the state, even if the employee and or employer in question were out of state and the employee was moving to CA to work.

That should pretty much end this case right there. This whole court case is just a waste of time and already settled law.

That's probably why IBM filed the suit in the U.S. District Court. The judge can use the CA Supreme Court ruling as a precedent or he/she could rule that non-compete clause must be honored. Federal Court rulings supersede any state court.

[Steven R Wilson]

Originally Posted by BenRoethig

That's probably why IBM filed the suit in the U.S. District Court. The judge can use the CA Supreme Court ruling as a precedent or he/she could rule that non-compete clause must be honored. Federal Court rulings supersede any state court.

I can't see how the Federal District Court could rule otherwise, but even if they do then this could go to the Supreme Court if they decide to take the case. Certainly IBM arguing that any of their employees can't work in the entire technology field for a full year has to be unconstitutional, it's borderline slavery.

[Haggar]

Originally Posted by meelash

Why would Apple have a problem taking their people? I think it would be someone Apple has or hopes to have a good relationship in the future. I don't think Apple cares about any of those companies enough to care about a little bad blood. Definitely not more than IBM and obviously they got past that...

Maybe those other people also signed non-compete agreements which are as restrictive, or even more restrictive than IBM's. But then again, Apple is allowed to actively recruit and poach employees from other companies, and Apple defenders see nothing wrong with that. But when Apple successfully hires someone away from a company and that person is then sued by his previous employer for violating non-compete, these same Apple defenders will blame it all on the employee by saying "He broke the law", "He signed a non-compete agreement", "Nobody forced him to sign", "Apple didn't force him to quit his previous job", "Apple didn't force him to become an Apple employee".

[meelash]

Originally Posted by Haggar

If any of those other people signed non-compete agreements, then there would still be the same legal mess today, just with a different person. But then again, Apple is allowed to actively recruit and poach employees from other companies, and Apple defenders are perfectly ok with that. But when Apple successfully hires someone away from a company and that person is then sued by his previous employer for violating non-compete, these same Apple defenders will try to make the employee look bad by saying "He broke the law", "He signed a non-compete agreement", "Nobody forced him to sign".

You're not paying attention to the thread of that conversation. We were specifically talking about #5 in the potential hire list, where Bob Mansfield says that employees of a certain company might be considered "off-limits."

[fuyutsuki]

Originally Posted by meelash

You're not paying attention to the thread of that conversation. We were specifically talking about #5 in the potential hire list, where Bob Mansfield says that employees of a certain company might be considered "off-limits."

Another vote for Intel. They are who immediately came to mind.

Apple's in a tricky place with Intel right now. They've pissed them off opting for Nvidia's clearly' superior chipset. They already scared them by buying PA Semi for an in-house chip design team. And yet Apple are still 100% committed to Intel for processors for the whole Mac platform through the foreseeable future.

Tricky indeed. They're the only company I can think of which Apple would give a shit about not upsetting in the way described around the juicy [REDACTED]!

[aplnub]

Originally Posted by fuyutsuki

Another vote for Intel. They are who immediately came to mind.

Apple's in a tricky place with Intel right now. They've pissed them off opting for Nvidia's clearly' superior chipset. They already scared them by buying PA Semi for an in-house chip design team. And yet Apple are still 100% committed to Intel for processors for the whole Mac platform through the foreseeable future.

Tricky indeed. They're the only company I can think of which Apple would give a shit about not upsetting in the way described around the juicy [REDACTED]!

On the flip side, why should Apple treat Intel with great respect when they could run on AMD, Power, etc.? Think about it. Apple is in the perfect position to leverage their growth (within reason) against Intel and get away with it simply because they are not like Windows and currently tied to anyone one architecture. I know at the moment and forseeable future that Intel is the way they want to go and is the reason that people are switching but so you would think Apple would want to get along and I suspect that is what they are doing. Getting along. Who knows what Steve has planned. But you can bet Intel wants Apple's mobile business very bad and will continue to bite their left nut to have a shot at it no matter how far fetched getting it would seem.

They are small enough not to matter but big enough to matter. Apple is its own paradox.

I would say they went in telling Intel they are only going to get the notebook and desktop stuff for now and I would say they made no promises past that. If Intel gets bent over NVidia and PA Semi, so be it. It's business. Intel could choose to make a good graphics chip set if they decided to.

[nvidia2008]

Originally Posted by meelash

Why would Apple have a problem taking their people? I think it would be someone Apple has or hopes to have a good relationship in the future. I don't think Apple cares about any of those companies enough to care about a little bad blood. Definitely not more than IBM and obviously they got past that...

I think it can be too disruptive, having to work out all the niggles. Bad blood is fine, but Apple tends to err on the side of "just getting things done".

So "off limits" may mean, not worth the trouble. Also, it could simply mean if they risk bad blood, it's too disruptive as well with their close business partners.

If Apple went poaching Nvidia staff very agressively, for example, it might piss them off, reducing "teh good deals" Apple gets with Nvidia.

So yes, it's a grey area, does "off limits" refer to close business partners, competitors, or both??? That is the question.

[iPeon]

Apple is better off without Mark Papermaster. Not so much because of him but because of where he is coming from.

[Nano2Gfteo]

It appears from the transcript that Papermater accepted Apple's offer on Oct 10 and was still under employ of IBM ?. He has to file is resignation at IBM first with a declared exit date. Until that time, his processional work loyalty should be still with IBM. I find this strange. I personally would want to be fully "FREE" from any employer before I start with a new one, even if they are completely un-related in industry.

I think Papermaster and Apple will prevail. IBM might get to may money as compensation but to to the tune of $3M. Several hundred thousands maybe.