Court allows Apple's lawsuit against former iPhone chip designer

Posted:
in General Discussion
Apple's breach-of-contract lawsuit against ex-employee and Nuvia founder Gerard Williams III can now go ahead after a judge rejected a request to dismiss the case.

A7
Apple's A7 SoC debuted as the world's first 64-bit mobile processor and was one of the chips that Gerard Williams III worked on.


Santa Clara County Superior Court Judge Mark Pierce has ruled that Apple may take its breach-of-contract lawsuit against Gerard Williams III to trial. The judge also dismissed Williams' claim that Apple had illegally obtained private text messages. However, Judge Pierce rejected Apple's claim for punitive damages.

The case of Apple Inc. v. Williams III, 19-cv-352866, centers on allegations that the iPhone chip designer founded his new company, Nuvia, while still working for Apple. It accuses Williams of going against the anti-competitive clauses in his contract before leaving the company, and also of then recruiting his former colleagues.

Williams denies the claims and argues that the clauses are illegal. "Apple cannot state a claim for breach of the duty of loyalty because it is preempted by the California Uniform Trade Secrets Act," he said in his counterargument to the court.

However, according to Bloomberg, Judge Pierce rejected this, saying that California law does not allow an employee "to plan and prepare to create a competitive enterprise prior to termination if the employee does so on their employer's time and with the employer's resources."

Nuvia co-founders, L-R: John Bruno, Gerard Williams III, and Manu Gulati
Nuvia co-founders, L-R: John Bruno, Gerard Williams III, and Manu Gulati


Williams' court document also included the claim that Apple had invaded his privacy by obtaining text messages relating to the recruitment of colleagues.

"To further intimidate any current Apple employee who might dare consider leaving Apple," the demurrer document continues, "Apple's Complaint shows that it is monitoring and examining its employees' phone records and text messages, in a stunning and disquieting invasion of privacy."

Judge Pierce also reportedly rejected Williams's request for the text messages to be excluded from the suit. "There are no allegations in the complaint establishing that the text messages were obtained as the result of eavesdropping upon or recording a confidential communication," wrote the judge.

Apple had bid for punitive damages in the case, but Judge Pierce rejected that on the grounds that Williams had not intentionally tried to harm the company.

This case was specifically to rule on whether a court trial could take place rather than on attempting to decide the suit. Claude Stern, Williams' attorney, intends to appeal.
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Comments

  • Reply 1 of 22
    neilmneilm Posts: 912member
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
  • Reply 2 of 22
    Rayz2016Rayz2016 Posts: 6,957member
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
     
    The difference is that there's no breach of contract involved in leaving a company and going to work for someone else.

    The man started a company (allegedly) while he was working for Apple which was in competition with Apple.

    I can see why they're miffed.
    MacQcStrangeDaysMacProtmaycornchiptommikeleflyingdpwatto_cobra
  • Reply 3 of 22
    flydogflydog Posts: 1,014member
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
    Read the article. First, the lawsuit is not for hiring someone and his/her colleagues from a competitor, it is for breaching an employment contract. Moreover, Apple does not enter into contracts with competitors that restrict hiring their employees.
    StrangeDaysMacProtmaybloggerblogtommikelewatto_cobra
  • Reply 4 of 22
    jd_in_sbjd_in_sb Posts: 1,600member
    The “the contract I signed is illegal” defense is usually a losing one. Especially for men who wear tight white pants. 
    cornchipchabigjdb8167watto_cobra
  • Reply 5 of 22
    jd_in_sb said:
    The “the contract I signed is illegal” defense is usually a losing one. Especially for men who wear tight white pants. 
    There was no IP theft.  There wasn’t even an effort to steal customers.
    These non compete contracts are bogus.  Sure they guy used company resources (sent text messages on company time property) but he didn’t damage Apple.  Large companies use lawyers and lawsuits as weapons against startups and discourage innovation.  Apple is acting like a personnel version of a patent troll...

    If Apple wants to keep these innovators they need to up their incentives.  If Apple feels threatened, invest in the startup and if it amounts to something buy them out (bring them back into the fold).  

    Apple comes across as petty on this one, these are employees not subjects.
    muthuk_vanalingamcornchipcanukstorm
  • Reply 6 of 22
    cornchipcornchip Posts: 1,860member
    this guy had to see it coming. my question is if he had the funds to pony up for Silicon Valley lawyers, wouldn't he have had the cash to just quit and wait it out a year? seems he chose the more ridiculous albeit, more newsworthy path.
    StrangeDayswatto_cobra
  • Reply 7 of 22
    sflocalsflocal Posts: 5,762member
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
    Your "sarcasm" is a thinly-veiled trolling attempt.  Nice try.

    Your attempt to compare the hiring of a competitor's employee to someone that is actively starting a competing company while at the same time being employed by Apple is pathetic.

    Go for try #2.
    StrangeDayswatto_cobra
  • Reply 8 of 22
    sflocalsflocal Posts: 5,762member
    If what this guy did is true, he's in a world or hurt if he loses and Apple goes full lawsuit on him.  He's got to be sweating under the color a bit.

    The text messaging thing is interesting.  I'm assuming he was using a Apple-supplied company iPhone, and was using that company iPhone for his text messages.  Does the employee have a right to privacy on anything done on a company phone?  It's legal for a company to install key logging software to monitor employee's computer use right?  Does that extend to mobile phones?
    watto_cobra
  • Reply 9 of 22
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
    Mediocre sarcasm or not, your lame attempt at snarly entertainment is just low grade trolling looking for adulation. Moral ground and ethics must be non-existent for you. You seem to think using a current employer's resources and time and wages paid by them to start up your company is perfectly okay or is it just okay with you because it is Apple who they were doing it to?
    StrangeDayswatto_cobra
  • Reply 10 of 22
    1st1st Posts: 443member
    the chap better be good enough to avoid such a black mark on his name (and his company... who is going to touch his design when under cloud of lawsuit?). if he is good enough, he should not have shortage of followers (WITHOUT text message)..
    watto_cobra
  • Reply 11 of 22
    StrangeDaysStrangeDays Posts: 11,645member
    jd_in_sb said:
    The “the contract I signed is illegal” defense is usually a losing one. Especially for men who wear tight white pants. 
    There was no IP theft.  There wasn’t even an effort to steal customers.

    These non compete contracts are bogus.  Sure they guy used company resources (sent text messages on company time property) but he didn’t damage Apple.  Large companies use lawyers and lawsuits as weapons against startups and discourage innovation.  Apple is acting like a personnel version of a patent troll...

    If Apple wants to keep these innovators they need to up their incentives.  If Apple feels threatened, invest in the startup and if it amounts to something buy them out (bring them back into the fold).  

    Apple comes across as petty on this one, these are employees not subjects.
    Nonsense. There was no claim of IP theft. The breach of contract is around starting a competing firm while working for Apple, and recruiting within Apple, while working for Apple. 

    That may sound "petty" to you, so try this -- start your own company, hire some people, launch a product, and let us know how you feel then. I have, and I'd be pissed if someone I was employing did that. So would you. If you didn't you won't be in business long.
    edited January 2020 watto_cobra
  • Reply 12 of 22
    StrangeDaysStrangeDays Posts: 11,645member

    sflocal said:
    If what this guy did is true, he's in a world or hurt if he loses and Apple goes full lawsuit on him.  He's got to be sweating under the color a bit.

    The text messaging thing is interesting.  I'm assuming he was using a Apple-supplied company iPhone, and was using that company iPhone for his text messages.  Does the employee have a right to privacy on anything done on a company phone?  It's legal for a company to install key logging software to monitor employee's computer use right?  Does that extend to mobile phones?
    When I had a work-issued phone for a publicly traded company, it was clear to me that my work communications could become public. We were explicitly told to imagine anything we said could end up on the front-page of a newspaper. So no, I don't think there is any expectation of privacy on work-issued equipment.
    watto_cobra
  • Reply 13 of 22
    StrangeDaysStrangeDays Posts: 11,645member
    jd_in_sb said:
    Especially for men who wear tight white pants. 
    Seriously what is up with that moose knuckle.
    watto_cobra
  • Reply 14 of 22
    kevin keekevin kee Posts: 1,291member
    Rayz2016 said:
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
     
    The difference is that there's no breach of contract involved in leaving a company and going to work for someone else.

    The man started a company (allegedly) while he was working for Apple which was in competition with Apple.

    I can see why they're miffed.
    Sounds like Google no 2. And you know how that ended up? *cough* Android *cough.
    watto_cobra
  • Reply 15 of 22
    smoke him!!!
    watto_cobra
  • Reply 16 of 22
    jd_in_sb said:
    The “the contract I signed is illegal” defense is usually a losing one. Especially for men who wear tight white pants. 
    There was no IP theft.  There wasn’t even an effort to steal customers.

    These non compete contracts are bogus.  Sure they guy used company resources (sent text messages on company time property) but he didn’t damage Apple.  Large companies use lawyers and lawsuits as weapons against startups and discourage innovation.  Apple is acting like a personnel version of a patent troll...

    If Apple wants to keep these innovators they need to up their incentives.  If Apple feels threatened, invest in the startup and if it amounts to something buy them out (bring them back into the fold).  

    Apple comes across as petty on this one, these are employees not subjects.
    Where do you get the idea that non-compete clauses are bogus? They certainly are not and have been ruled such for decades. There are restrictions on these clauses, such as not preventing an ex-employee from making a living, or its too broad, or the non-compete clause is too long in duration, or not relevant to the employee's position in the company -- that is, it's mere boilerplate.

    Until relatively recently, Wisconsin's non-compete law held that a non-compete clause which contained any illegal restriction would invalidate the non-compete clause in its entirety. Now, in Wisconsin, the illegal restriction language is separable from the rest of the clause. Making illegal restrictions separable allows and encourages companies to sandbag employees with illegal restrictions, a common practice. This is clearly a problem for fair treatment of ex-employees, but this doesn't make non-compete clauses bogus. 
    watto_cobra
  • Reply 17 of 22
    bellsbells Posts: 140member
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
    It would help if you took the effort to actually read the article. This guy allegedly not only created his company while still working at Apple (that would be OK), but did so while utilizing Apple's time and resources. That is a breach of his employment obligations.
    fastasleepwatto_cobra
  • Reply 18 of 22
    larryjwlarryjw Posts: 845member
    bells said:
    neilm said:
    Good thing Apple has never hired anyone from a competitor or supplier, and then tried to entice that person's erstwhile colleagues to follow.

    /s
    (In case your sarcasm detectors aren't yet fired up this Monday morning.)
    It would help if you took the effort to actually read the article. This guy allegedly not only created his company while still working at Apple (that would be OK), but did so while utilizing Apple's time and resources. That is a breach of his employment obligations.
    Using Apple resources does not automatically result in breach of employment contract. All employees violate a strict interpretation of that contract. The issue is whether such personal use is de minimus -- minor, insignificant. 
    jdb8167watto_cobra
  • Reply 19 of 22
    Normally this sort of suit is meritless. California law give employees a right to moonlight, invent stuff, and start companies regardless of whatever terms their employer puts in their employment contract. That's how Silicon Valley came to exist. But Gerard was unusually sloppy. You can't use company time or resources to do this. If you do, you make sure there's absolutely no electronic evidence of it. Especially at Apple, which is really damn good at digging it up. If you want to recruit coworkers to your new startup within a year, you need to be very discreet and indirect about it. Make sure there's deniability. Keep it off LinkedIn. Gerard was openly going around handing out job offers to his former subordinates (disclosure: I was one of them, don't work for Nuvia though). This is the first time Gerard's started a company, and I'm guessing he just didn't know better. My advice to any Apple employees planning to escape the Borg and start their own company: Get a burner Android phone.
    jdb8167watto_cobra
  • Reply 20 of 22
    Go get 'em, Apple. Make them who tries to deliberately harm Apple pays a huge paycheck and get embarrassed.
    watto_cobra
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