Apple discussing settlement with battery maker over alleged employee poaching

Posted:
in General Discussion edited March 2015
In a court filing on Tuesday, Apple informed a Massachusetts federal judge that it is in discussions with A123 Systems to settle out of court a lawsuit claiming Apple poached the battery maker's key engineers for a secret internal project.

An inside look at the Venturi Buckeye Bullet 3 land speed racing vehicle with A123 battery technology.


Apple revealed that settlement talks were underway in a motion requesting an extension on the time to respond to A123's accusations of employee poaching. Presiding Judge Douglas P. Woodlock subsequently issued an electronic order granting the motion. The filing was spotted by Reuters earlier today.

In its complaint, A123 claims Apple poached five executives attached to the firm's System Venture Technologies Division, including program lead and company CTO Mujeeb Ijaz. The battery maker has not revealed what advanced initiatives its Venture Technologies arm was working on, but claims each of the engineers' projects have been shut down due to lack of suitable replacements. The employees left "under suspicious circumstances" last June.

Alongside Ijaz, defendants include former A123 employees Don Dafoe, Michael Erickson, Depeng Wang and Indrajeet Thorat, all of whom recently left the company's advanced energy storage division for Apple. Ijaz is a key target in the suit, with plaintiffs asserting that he recruited one or more of his former colleagues after joining Apple, an action that would constitute a breach of contract.

Apple was first slapped with the lawsuit last month amid chatter that the Cupertino company is hard at work on a stealth electric car project. A123's suit stoked rumors surrounding the so-called Apple Car, supposedly referred to internally as project "Titan," as the firm has a background in electric car batteries.

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Comments

  • Reply 1 of 21
    SpamSandwichSpamSandwich Posts: 31,135member

    Poaching? LOL! Ridiculous...

  • Reply 2 of 21
    chris_cachris_ca Posts: 2,543member
    Quote:


    The employees left "under suspicious circumstances" last June.


    Company headed into bankruptcy, employees get offered job at different company and they take it and that is “suspicious”?

  • Reply 3 of 21
    Quote:

    Originally Posted by Chris_CA View Post

     

    Company headed into bankruptcy, employees get offered job at different company and they take it and that is “suspicious”?




    Didn't you know? It's the passengers that go down with the ship while the captain takes the lifeboats.

  • Reply 4 of 21
    chris_cachris_ca Posts: 2,543member
    Quote:



    Originally Posted by sog35 View Post

    This is silly. Why would anyone stay at a company that is bankrupt

    They left in June and bankruptcy was not filed until October.  Yes, they may have known something was amiss...

     

    Quote:


    Why would anyone stay at a company that is bankrupt


    To (possibly) get huge a bonus. Ask GTAT...

  • Reply 5 of 21
    syrransyrran Posts: 42member

    This Appleinsider article fails to state what law was allegedly broken. The article should summarize the grounds of the lawsuit so the reader doesn't have to take the time to read the lawsuit. 

  • Reply 6 of 21
    chris_cachris_ca Posts: 2,543member
    Quote:
    Originally Posted by Syrran View Post

    This Appleinsider article fails to state what law was allegedly broken. T


    No laws were broken. If laws were broken, there would be a criminal trial, not a civil lawsuit...

    Quote:


    The article should summarize the grounds of the lawsuit 



    It does...

    "In its complaint, A123 claims Apple poached five executives attached to the firm's System Venture Technologies Division, including program lead and company CTO Mujeeb Ijaz. The battery maker has not revealed what advanced initiatives its Venture Technologies arm was working on, but claims each of the engineers' projects have been shut down due to lack of suitable replacements. "

  • Reply 7 of 21
    MacProMacPro Posts: 18,260member
    sog35 wrote: »
    This is silly. Why would anyone stay at a company that is bankrupt

    Exactly, they wouldn't with a better offer. Maybe the top execs intended to go into bankruptcy, avoid their debtors, cream the share holders and exit with a fresh start and take home massive bonuses. Then start over with the same staff ... except they some key players left for Apple ... oops.
  • Reply 8 of 21
    solipsismysolipsismy Posts: 5,099member
    Poaching? LOL! Ridiculous...

    Someone out there is illegally hunting geeks. If you see anyone with stuffed nerds mounted on their wall let the authorities know right away.
  • Reply 9 of 21
    MacProMacPro Posts: 18,260member
    Poaching? LOL! Ridiculous...

    I get a mental image of a nerd in a pot of boiling water ...
  • Reply 10 of 21
    krawallkrawall Posts: 157member
    Now I have an idea, hear me out:

    Judge Koh should take over this case. Since she let go forward the ruling for Apple (and other's) anti-poaching agreements, now it's the time to strike back against Apple for poaching employees from other companies.

    Oh and yes, poaching: "[to] take or acquire in an unfair or clandestine way."

    Why don't we just put in an Apple tax. Just because Apple has money, why not take out XX% of that and distribute this to clueless headless chickens on a recurring basis.
  • Reply 11 of 21
    syrransyrran Posts: 42member
    Quote:

    Originally Posted by Chris_CA View Post

     

    No laws were broken. If laws were broken, there would be a criminal trial, not a civil lawsuit...

    It does...

    "In its complaint, A123 claims Apple poached five executives attached to the firm's System Venture Technologies Division, including program lead and company CTO Mujeeb Ijaz. The battery maker has not revealed what advanced initiatives its Venture Technologies arm was working on, but claims each of the engineers' projects have been shut down due to lack of suitable replacements. "


    Thanks, but a rule of common law, or a statutory law that is actionable by a private party must have been broken in order for there to be a civil lawsuit.

     

    "Apple poached five executives"--How is hiring away employees from another company not lawful?  

  • Reply 12 of 21
    syrransyrran Posts: 42member
    Quote:

    Originally Posted by Krawall View Post



    Now I have an idea, hear me out:



    Judge Koh should take over this case. Since she let go forward the ruling for Apple (and other's) anti-poaching agreements, now it's the time to strike back against Apple for poaching employees from other companies.



    Oh and yes, poaching: "[to] take or acquire in an unfair or clandestine way."



    Why don't we just put in an Apple tax. Just because Apple has money, why not take out XX% of that and distribute this to clueless headless chickens on a recurring basis.

    This is what confuses me. First we are told Apple has to pay $415 million to tech workers because Apple entered into anti-poaching agreements. Now we are told Apple is negotiating to pay another company money for poaching. First, poaching is good. Now poaching is bad. 

  • Reply 13 of 21
    foggyhillfoggyhill Posts: 4,767member
    Quote:

    Originally Posted by Krawall View Post



    Now I have an idea, hear me out:



    Judge Koh should take over this case. Since she let go forward the ruling for Apple (and other's) anti-poaching agreements, now it's the time to strike back against Apple for poaching employees from other companies.



    Oh and yes, poaching: "[to] take or acquire in an unfair or clandestine way."



    Why don't we just put in an Apple tax. Just because Apple has money, why not take out XX% of that and distribute this to clueless headless chickens on a recurring basis.

     

    You make NO SENSE AT ALL. You do realize the other ruling was because they WEREN'T POACHING. Good grief!!

    Hiring people from other companies is allowed; it pisses off the competition, but so what.

    Bet this will be settle for quite low and everybody will go on their merry old way.

  • Reply 14 of 21
    arlorarlor Posts: 498member

    If you want an article that covers the legal details more fully (and two weeks ago), try http://www.law360.com/articles/622308/apple-poached-workers-for-new-battery-division-a123-says. ;

     

    In brief: Apple's accused of misappropriation of trade secrets, tortious interference (intentional interference with contractual relations), raiding (of employees, not villages), and unfair competition. There's a pretty clear -- and brief -- explanation of the general legal issues at stake (with no reference to this dispute) at: http://mccandlishlawyers.com/wp-content/uploads/2013/12/Raiding-Competitors-Emp.pdf.

     

    An excerpt from the latter: 

     

    Quote:


    Did Company X properly compete for the engineers’ services or has it violated the law related to intentional tortious interference with contracts?


     


    The answer requires examination of whether: (1) Company Y had a valid contractual relationship with the engineers; (2) Company X knew the engineers were under contract with Company Y; (3) Company X intentionally approached the engineers and caused them to breach their contracts; (4) Company Y was damaged by the interference and breach; (5) the engineers were hired for a fixed duration, no duration or could otherwise terminate their contracts at-will; and (6) Company X used "improper methods to lure the engineers away."


     


    Regardless of whether the engineers were hired as employees or independent contractors, Company X certainly had knowledge that they were contractually bound to Company Y. Company X also approached the engineers for the purpose of hiring them away, thereby causing breach of their contracts to provide services to Company Y. If Company Y can establish that it was injured by these actions, it may recover damages for tortious interference with contractual relationships.


     


    However, if Company Y's engineers were hired by contracts which were terminable at the will of either party, Company Y would also have to establish that Company X used "improper methods: to get them to breach their agreements. 


  • Reply 15 of 21
    krawallkrawall Posts: 157member
    Quote:
    Originally Posted by foggyhill View Post

     

     

    You make NO SENSE AT ALL. You do realize the other ruling was because they WEREN'T POACHING. Good grief!!

    Hiring people from other companies is allowed; it pisses off the competition, but so what.

    Bet this will be settle for quite low and everybody will go on their merry old way.


    Yes I do understand that. I'll add an /s to my future posts so you don't have to grieve. :-)

     

    Oh and I said it because the anti-poaching suit was ridiculous and so is this one.

  • Reply 16 of 21
    runbuhrunbuh Posts: 315member
    chris_ca wrote: »
    No laws were broken. If laws were broken, there would be a criminal trial, not a civil lawsuit...
    So tort law violations are only treated as criminal offenses?
  • Reply 17 of 21
    runbuhrunbuh Posts: 315member
    arlor wrote: »
    If you want an article that covers the legal details more fully (and two weeks ago), try http://www.law360.com/articles/622308/apple-poached-workers-for-new-battery-division-a123-says

    In brief: Apple's accused of misappropriation of trade secrets, tortious interference (intentional interference with contractual relations), raiding (of employees, not villages), and unfair competition. There's a pretty clear -- and brief -- explanation of the general legal issues at stake (with no reference to this dispute) at: http://mccandlishlawyers.com/wp-content/uploads/2013/12/Raiding-Competitors-Emp.pdf.

    An excerpt from the latter: 
    You're expecting people to a) read, and b) consider that Apple might have done something wrong. Those two things generally don't happen on this site.
  • Reply 18 of 21
    so, if your CEOs agree not to poach, you get sued and lose to the tune of hundreds of millions. If you do poach, you get sued%u2026. what a system! Go America!
  • Reply 19 of 21
    thomprthompr Posts: 1,511member
    Quote:
    Originally Posted by Syrran View Post

     

    Thanks, but a rule of common law, or a statutory law that is actionable by a private party must have been broken in order for there to be a civil lawsuit.

     

    "Apple poached five executives"--How is hiring away employees from another company not lawful?  


    Well, when I imagine the conversations that were had when Apple approached these people for jobs (or, quite possibly, the other way around, doesn't matter) I see this:

     

        (1) at some point, the employee told Apple about their existing contracts that didn't allow them to leave A123 for this particular job, or

        (2) the employee never mentioned it and hoped to escape A123 without consequence

     

    I figure that (2) is unlikely.  But in the case of (2) Apple would be free and clear of any lawsuit.

     

    If (1) above was true, and Apple offered the person a job anyway, then I see this:

     

        (a) Apple either offered to indemnify the person if they broke their existing agreement and were called to task by A123, or

        (b) Apple said "take it or leave it", and the person took it and hoped to escape A123 without consequence 

     

     

    Looking at the above possibilities, the most likely circumstance that might lead to Apple seeking out a settlement involve (1a).  A secondary (but less likely) scenario is that (1b) occurred, but now Apple doesn't want to put their new, hopefully prized, employees in a bad financial spot, so they are coming to their rescue.  Of course it's even possible that (2) above occurred and Apple is only finding out about it now, but (again) they want to protect their new employees.

     

    There is nothing above that I find unethical, and only (1a) would make Apple a legitimate target of the lawsuit (which they were named on).

     

    I'm thinking that Apple gambled on (1a) and now they are living up to their pledge.

     

    Nothing insidious here... just business.

     

     

    For these 5 experts that were "poached" for an important project, I'd say that was a believable theory.  And now Apple is doing the indemnification.

  • Reply 20 of 21
    SpamSandwichSpamSandwich Posts: 31,135member
    Quote:

    Originally Posted by digitalclips View Post





    I get a mental image of a nerd in a pot of boiling water ...



    I'll have a poached employee breakfast special with a side of bacon.

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