Motorola sues former employee turned Apple exec for ganking trade secrets

It's hard enough for Motorola's handset division to go about its business these days without losing talent, but losing executives to Apple's iPhone team? That's just a straight-up slap in the face, and Moto's not gonna take it lying down. The We Generation has filed suit against Michael Fenger, the dude running its handset business for the EMEA market for six years until March this year, when he quit to take up a posh job as Apple's veep of global iPhone sales. That isn't a problem in itself -- businessfolk switch teams all the time -- but it seems Mr. Fenger had an agreement in place not to work for a competitor inside of two years following his departure. Moto claims he "was privy to the pricing, margins, customer initiatives, allocation of resources, product development, multiyear product, business and talent planning and strategies being used by Motorola" (not to say that data's worth much more than the paper it's written on these days) and wants over a million bucks back plus a court order banning him from working for Cupertino for those promised two years retroactively to March 31; non-compete clauses generally aren't valid in California, but since this one was executed in Illinois and the case is filed in Chicago, they've got a shot here. Note to current execs still out there in Schaumburg: better start righting that ship you're on, because you ain't getting on a more buoyant one without a fight.

[Via CNET]

[Sora @ Jul 18th 2008 8:39PM]

I can see him getting a fine, most likely under the proposed million, and I can't see the employment ban at ALL.

[deyanimay @ Jul 18th 2008 9:31PM]

Maybe he could have brought something like mms from moto to the iphone.

[Cash @ Jul 18th 2008 10:50PM]

Motorola accuses him of what? Ganking?

The hell does that mean??

[haracas @ Jul 19th 2008 2:47AM]

Killing a player much lower in level than you, thats what ganking is, and low level is what Motorala is.

[Reid @ Jul 19th 2008 7:17PM]

deyanimay wins

[Sly Fox @ Jul 18th 2008 8:40PM]

I guess they need the money from the lawsuit from the lack of phones they are selling...

[Sly Fox @ Jul 18th 2008 8:45PM]

...fail?

[cardaxd @ Jul 18th 2008 8:47PM]

How you like them Apples?

[deyanimay @ Jul 18th 2008 9:31PM]

i see what you did there

[SuperSexyErik @ Jul 18th 2008 8:47PM]

they're working for apple... Ahh now I understand why the iphone had a few bugs :P

[Chris Macdonald @ Jul 19th 2008 3:55PM]

Go to your bathroom, fill the tub, put your head in the water, and hold it there until you die.

[DaLa @ Jul 18th 2008 8:51PM]

Bye Bye Moto

[SINNN @ Jul 18th 2008 8:53PM]

I need money. Can you all paypal me some cash. After spending all my check on the iphone... I am hungry.

[Eugenia Loli-Queru @ Jul 18th 2008 8:54PM]

I don't disagree to bar him from working at Apple, but asking $1million from a guy, is too much and makes Motorola look like a big bad wolf. Not good press. Drop the money.

[jupiterthunder @ Jul 18th 2008 10:21PM]

If they have evidence he's divuldged any inside information to Apple, they should ask for the money. And they have to ask it of him b/c how could they ask Apple? Apple wouldn't have been bound by the contract he signed.

Moto should get whatever the contract dictates they are allowed and any damages. Of course, considering their current state, how would they any "damages" aren't just because they are floundering right now?

[Peter @ Jul 22nd 2008 12:58AM]

The $1M is because he took stock options worth that much on the condition that he would not compete. What possible argument is there that he should not have to return that money?

[Who Knows @ Jul 18th 2008 9:01PM]

success

[thedesolate1 @ Jul 18th 2008 9:01PM]

Desperate times call for desperate measures huh motorola? Oh and Chris..... how does one go about righting a ship he is on? please tell.

[Twitchy @ Jul 18th 2008 11:03PM]

Patching the leaks, pumping the bilge, trimming the sails. I.e. that what sailors to to get a vessel back into an upright position.

[dssstrkl @ Jul 18th 2008 9:13PM]

Aren't non-competes illegal (and non-binding) in California? Seems like Moto's just trying to make *some* money for next quarter...

[Rathum @ Jul 18th 2008 9:30PM]

Noncompetition clauses are legal in Illinois and this was filed in Chicago. Californian courts nullify noncompete agreements from other states, but they're bound by the constitution to uphold a ruling from another state's courts.

[EdgeOne @ Jul 19th 2008 7:33AM]

I can see both sides of a non-compete - the company wants to protect its investment in training/educating the employee with trade secrets, business practices, etc, but then how can it be legal to hold a person hostage to job they specialize in by saying that can't go use their skills elsewhere for an extended period of time?

The burden should be equally on the employee to work well enough to keep the job, while the employer should do what it can to retain the employee. If one or the other fails, all bets are off.

However its near impossible to fire someone once they're hired and employers look out for themselves mainly so I guess I say fail to non-compete (as has California).

[xkevin @ Jul 19th 2008 7:41PM]

@EdgeOne

In many cases the former company will continue paying the employee's salary until the blackout period is over. Some call it "garden leave"...

[John @ Jul 18th 2008 9:20PM]

This seems fair to me. He signed the contract. He broke the contract. Is there some magical rule that says that he can just back out because it suits him?

[deyanimay @ Jul 18th 2008 9:33PM]

i wish cellphone contacts let us magically back out

[diode3diode @ Jul 18th 2008 9:55PM]

The thing is non-compete clauses are generally nonbinding in Calif. I can see him getting fined but NOT working for Apple? This cuts into his livelihood. How can he make a living?

[deyanimay @ Jul 18th 2008 9:59PM]

Deal with the problem many layed-off Americans deal with. look for a new job.

[diode3diode @ Jul 18th 2008 10:40PM]

The problem with this thing is he is an Exec hired by Apple because he is an Exec, therefore he is on a higher tier than the many layed-off Americans. I don't think he would settle for less. If you are valued as such by Apple & Motorola, would you settle?

[deyanimay @ Jul 19th 2008 4:52AM]

When you break an agreement you pay the price, so let him suffer a little.

[^ @ Jul 18th 2008 9:21PM]

apple (good products) has nothing to steal from motorola (very bad and FUGLY products)

[Phoenix @ Jul 19th 2008 1:26PM]

How about experience in making handheld devices? Apple has very little (a years worth by now, a device that whilst revolutionary in some ways was behind the times, now another one that plays catch up, adding features others have had for years) whereas Motorola has been there for a very, very long time. Some of their phones are good devices and are used all over the world, they have much more experience with the way the phone market works.

So yeah. There's a lot Apple might want to take from Motorola, and many other companies in different sectors.

[peter.drier @ Jul 18th 2008 9:22PM]

dssstrkl is right.. Cali voids all non-competes.. Sorry Moto..

[ranger @ Jul 18th 2008 11:21PM]

If apple products are "good products" then why is there a news story every other day about someone complaining about the iphone or some apple related product?

[Lucretius @ Jul 18th 2008 10:27PM]

that's a shallow take, man. there really are alot more positive reviews and overall, more people are content with their 'apple products' than not. like it or not, apple does seem to put "Qaulity" with a capital-fucking-Q all over the place.

[Lucretius @ Jul 18th 2008 10:30PM]

awww, Quality*

irony just kicked my ass right there

[karbon @ Jul 18th 2008 9:28PM]

Doesn't matter if it was signed or not. That contract does not apply in California. Maybe in Illinois it would be enforceable, but not CA. Goodbye Moto!

[Peter @ Jul 22nd 2008 1:04AM]

You're an idiot. He's not in Iran where he's effectively untouchable, he's in California. Of course he's prosecutable in Illinois. California's legal system is irrelevant in this case.

[Jubei @ Jul 18th 2008 9:37PM]

A desperate attempt at best. Driven by their dire situation in the market today. Every penny that they can scrape from this, if at all, will do nothing for their bottom line. Truly a sign of desperation.

[mykie @ Jul 18th 2008 9:42PM]

Non-compete agreements are really hard to enforce, no matter what state you're in.

I'm betting Moto loses this one.

Anyways, how can Moto have a multi-year plan when their burn rate won't even accommodate fore multiple years?

[jlmcp @ Jul 19th 2008 3:02AM]

Too bad for Moto that these agreements are basically unenforceable in California. That's why you see so much "team switching" in the valley.

[Pc_Madness @ Jul 18th 2008 10:48PM]

Since when has Motorola been in competition with anyone, let alone Apple?

[Twitchy @ Jul 18th 2008 11:05PM]

Hehehehe....
Schaumburg (DE) = Foam Castle (EN)

[dai dai @ Jul 18th 2008 11:34PM]

Well.. regardless the fact(s) Apple and Moto might not be in the same standings, Mr. Fenger committed a party foul, therefore he needs to take a shot.

And , yes, by shot I mean a fat little fine. :]

[Markarian @ Jul 18th 2008 11:46PM]

If the guy resides in and is working for a California company, I can't see how this lawsuit can touch him unless it goes to federal court. I think Apple should simply argue that Motorola isn't a competitor. That's like Tata Motors suing Mercedes Benz.

[Rathum @ Jul 19th 2008 12:03AM]

Motorola is based in Schaumburg, IL so the contract was likely signed there. If Motorola wins the lawsuit in Illinois, California is required to abide by the ruling under the full faith and credit clause of the Constitution.

[Phoenix @ Jul 19th 2008 1:29PM]

You CANNOT say that Motorola and Apple do not compete. They both make phones. There's a hell of a lot more Motorola devices out there than the are Apple devices. Some people just can't afford an iPhone, even at the reduced price. Some people can't afford or don't want a contract.

They compete. End of.

[vlad.m @ Jul 19th 2008 12:53AM]

I just don't see this....He no longer works for Motorola so he has no responsibility to Motorola anymore. He has no obligations towards Motorola.....even if it is trade secrets. So what? It is a free country, he no longer works there so why the hell is he liable??? Motorola has no secrets! Their phones are absolute junk and people know it, that is not a secret! If they had secrets it would mean that they had technology that nobody else has but not only do they have pretty much the same technology others have but theirs is the most buggy and crap designs!

[John @ Jul 19th 2008 1:44AM]

He has obligations towards Motorola because he SIGNED A DAMN CONTRACT. he took a piece of paper saying he wouldn't do something, signed it, then went and did it. Is that too hard for you?

[Bosco @ Jul 19th 2008 1:40AM]

Wow are there some ignorant IANALs above. Non-compete agreements are enforceable in California if they were optional and fairly compensated in the eyes of a judge. The standard device for compensating non-competes is stock options, although signing bonuses are common too.

The biggest mistake employees make is signing any employment document or contract without having it reviewed by an employment attorney. The fact that you tell your employer you want your legal representative to review what you sign tells your employer that you won't be screwed around with. An employment attorney will tell you what is enforceable and what isn't and suggest whether to tell your employer that you know what works and what doesn't. An employment lawyer in California will be chomping at the bit to find an employer who makes a non-compete a condition of employment. That is an easy lawsuit and a big pay day and you don't even have to go to work! Finally, the most enforceable non-competes generally have a provision allowing the former employer to pay you a high percentage of your former salary to not work for a competitor. If they fail to pay, you're not violating the non-compete by working for someone they don't like.

[LondonConsultant @ Jul 19th 2008 7:59AM]

All non-compete agreements should be unenforcable, unless you accept the validity of slavery...