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Apple lawsuit tests if an employee can plan rival startup while on payroll (reuters.com)
214 points by pseudolus on Jan 23, 2020 | hide | past | favorite | 211 comments

If what Apple alleges is true, the ex-employee was particularly brazen about his competitive activity on company time and using company property. IANAL, but if you're planning a startup while employed somewhere else, have a wall of separation between the two. Don't use any resource that has any sort of relationship to the employer other than through you. That includes property, equipment, time, employees and infrastructure. You are not only better protecting yourself legally, but also showing respect to your employer by not misusing/countermanding their resources.

IANAL, but what does not using company time mean for salaried employees? I'm never "on the clock" vs "off the clock" in my current role, I just have target dates to hit.

Where I am (Australia) an employer is not allowed to pay a salaried employee less than they'd earn working the same hours as an equivalent role paid on a per hour basis.

When I've had employers try to claim weekend/evening work was "theirs", I've sent them a link to that legislation and a pro forma invoice for all my time during employment with them for the difference between 168 hours per week at equivalent hourly rate and what they've actually paid me so far. That nicely sets the tone for further discussion.

(I only got threatened with being fired on the spot once for doing that, on which they did not follow through, and I was already interviewing elsewhere anyway...)

> Where I am (Australia) an employer is not allowed to pay a salaried employee less than they'd earn working the same hours as an equivalent role paid on a per hour basis.

IIRC the wording in Australian legislation is that employers can require full-time employees to work "reasonable overtime". So that doesn't sound right - at least, not as a rule across the board. Perhaps under certain awards.

Even then, it's fairly useless wording. It does nothing to resolve disagreements between employer/employee as to what's reasonable. An extra hour once a year? 10 hours every week? Big difference between the two.

IIRC (usually) the "reasonable overtime" request is closely followed by a clause saying that, over the course of 4 months, you still must do an average of 38 hours/week or something to that effect.

How often it’s ‘enforced’ is, like you said, probably isn’t great

Australian employment law is the most bizarrely vague field I've ever come across.

"Reasonable overtime" is only one example - there's a whole host of other really basic questions that you can't get simple, definitive answers to.

For example, can I employ someone on a 12 month contract? What about 24 months? 36 months? At some point, they become a full-time/ongoing employee and get the benefits of unfair dismissal/redundancy, which means the whole "fixed-term" thing becomes meaningless. The problem is, it's never clear at what point that actually occurs.

Gut feeling is that this is because all politicians know it's an absolute minefield, so none of them is willing to touch it. Better to leave it vague enough that no-one can accuse them of favouring business or employees, because no-one really has any clue what's going on. Kick the can down the road and let FWA deal with it.

As far as I know, after working for more than 180 days in a tax year they become an employee.

Sounds like you're referring to the "employee" versus "contractor" question, which is a whole other distinction.

I'm talking about "full-time employee for a fixed-term" versus "full-time employee on an ongoing permanent basis".

In both cases, they're employees, not 'contractors' (so you withhold PAYG, pay their superannuation, etc).

But in the first case, you don't have an obligation to continue employing them after (say) 12 months.

The second, you are obliged to do so, so you can't turn around and say "we just don't want to employ you any more" after 12 months. You need to follow the redundancy provisions or terminate them for cause.

The problem is that it's not explicit whether businesses can actually offer the first type of contract (or more specifically, that if I employ someone on an 18-month, it's not explicit that they can't claim a redundancy payout when those 18 months end).

Do places actually offer fixed term contracts now? Last time I was looking at contracts I was stuck between recruiters/employers demanding an ABN and the ATO saying I wasn't eligible. The ATO were right because the work has to be performed on their equipment and on their schedule but most recruiters/employers hadn't adapted yet, so anyone without an ABN were SOL.

Yes this is still common and is covered by the ATO as the Personal Services Income test - you can either work via your own company or a payroll company but basically income is treated like standard PAYG

It's common for contracts to have a time-in-lieu clause. I worked late so I get some time off later.

For some, yes - but for others, no. I didn't have time-in-lieu at one of my past jobs.

Even so, as a matter of law, it's not required.

What does that mean. A contractor is paid more per hour than an employee. I don’t understand what a per hour project manager would be paid compared to an salaried employee, I’m pretty sure to be on an hourly rate you would be a contractor. I’m sure there are jobs that have an hourly rate like plumbing

Do you have a link to that legislation? I'm salaried in Australia and I've never heard of it.

It would be easy enough to firewall your activities based on location. If you are in the office at your place of work, do the work you are paid to do, if you are planning on doing activities that relate to job hunting/ creating a new business, do it after you leave or while at lunch.

If the guy's last couple month's productivity goes through the floor and he has dozens of hour+ long phone calls to his lawyer's office, he might be in trouble.

Makes things trickier if you work remotely. Probably a good reason for having a personal computer and a work computer.

Oh, absolutely they should be firewalled by device if you are a salaried employee, especially since most employees work on computers that are the property of their company. But can't my employer assert that they bought all my time when I signed up to be an exempt employee? The moonlighting laws in CA seem to give them leway to so if they are in a related area to my project, which for AmaGoopleSoft is potentially everything that can be done with software these days.

But can't my employer assert that they bought all my time when I signed up to be an exempt employee?

No, that would be illegal in pretty much every state, except possibly the worker-hostile US Deep South.

The moonlighting laws in CA seem to give them leway to so if they are in a related area to my project, which for AmaGoopleSoft is potentially everything that can be done with software these days.

This is backwards. CA's laws are one of the few in the country that actually let you do this type of thing. Most states let companies have extremely permissive claims to products/IP created by their workers, even off the clock. CA is one of the few states that strongly protects workers' individual creations produced off the clock. In a nutshell, unless you're an executive, material employee, or significant owner of the company, the stuff you make in your free time is yours unless it's directly within the scope of the Company's business activities. And generally, even in those situations CA law provides procedures to protect the workers' independently created IP.

Note: off the clock for these purposes roughly means that you're (a) not in the office/facility and (b) not working on a specific task or project for the company. I'm not going into all of the nuances in this comment.

>> But can't my employer assert that they bought all my time when I signed up to be an exempt employee?

> No, that would be illegal in pretty much every state, except possibly the worker-hostile US Deep South.

A friend of mine had to put his PhD on-hold when the company he worked for was acquired by Oracle, while his lawyer and their lawyers argued over whether the "standard employment contract" he was being asked to sign prevented him from publishing his thesis as required by the university to complete his PhD... A face value reading pretty much claimed "everything you think while employed by Oracle becomes IP exclusively owned by Oracle", and his new manager, their manager, and several levels up the corporate hierarchy all stuck to that interpretation for months before granting what was desc ribed to them as an "extremely unusual one-time-only expemtion which you musty not disclose to any colleagues".

Companies do plenty of things that are illegal, especially when it comes to labor law.

That being said, this story doesn't make sense unless it takes place outside of CA. Work for a PhD thesis is generally done on university grounds, giving the university the putative right to the underlying IP. A third-party employer like Oracle would have to duke it out with the university to claim ownership, no matter what their employment contracts said.

OTOH, if work for the PhD was done using Oracle facilities and equipment, then it makes perfect sense for Oracle to investigate IP ownership since many PhD thesis projects go on to become valuable commercial products.

This was complex. The acquired company was in the US, but not in CA. The university was in Australia, and yes they also claimed ownership (which had already been agreed as part of starting the PhD). It's quite likely the work on the PhD prior to the Oracle acquisition was done on the original acquired companies equipment (and probably time as well).

It was without doubt a time wasting and frustrating shitfight ensuring he was "allowed" to think about his PhD topic after being acquired by Oracle (although he had enough equity to have done quite nicely out of the deal anyway, I suspect...)

Yes, but that’s not the primary issue in this case. Even then you can firewall based on device... which is a good idea considering large employers don’t even have to go through courts to get access to the device they issued you.

> It would be easy enough to firewall your activities based on location.

...if you work from home?

Switch from your work computer to your own computer. If you don't have on the clock vs. off the clock, then I think you could make the argument that you were doing work stuff and then moved to your own computer to do your own stuff.

At work computer versus at own. Or even VPN on, versus off VPN, though that’s harder if you don’t use one.

Even accounts could be a reasonable separation.

If you absolutely had to use your personal computer for a full time gig I can’t imagine how having a clean slate and user namespace wouldn’t be beneficial.

Discreet SSH keys, directories, downloads, etc.

I work from home and even when I have no startup plans I still keep two separate browser profiles, ssh keys, directories etc, exactly for the benefits you mentioned. Things like autocomplete suddenly become "smarter" if they know I'm looking for something work related.

I have two accounts on my home workstation to create a separation.

10+ years freelancer. I have virtual machines for each client, and a personal one where i test my stuff. Currently ~10 machines sitting on my PC hard, plus 20+ backed up on a separate backup hdd specially made for this. And all are backed also in the cloud, on encrypted volumes, under different providers with thousands of accounts each, all managed by a password manager (I made my own pwd manager for my own needs).

This setup allows me full separation for each client plus my own stuff. Personally I think this is the best solution. Only downside is that requires a good internet connection, which in my country is a non-issue

It's a good question. I don't know, and if you're curious, ask an employment lawyer.

I'm even further removed from company time: not only am I salaried non-exempt, but I mostly work remotely.

My own rule (without taking into account any legal advice I don't need, since I'm not working on my own startup) is to be very strict about the resources that belong to the company, and not mix them with anything I do for fun or personal/professional growth.

Non-exempt workers are generally employees paid on an hourly basis, below an annual income threshold of approximately $55k, not including certain programmers or white-collar workers, both of which have been explicitly "exempted" from the law.

Yep, I meant salaried exempt.

If you're non-exempt, then you're explicitly tracking "company time" vs "not company time".

Did you mean you are exempt?

Both of you are correct. I meant I am salaried exempt and remote. Apparently I was also caffeine deficient at the time I wrote that...

This is only true if your employment contract doesn't specify a certain number of hours a week, or if there's no standard. A simple test to see what the standard for a day is is the hours a company considers a vacation day. As much as your employer may like to think they own you, the reality is quite different, even for salaried employees who don't get paid overtime. There is a reasonableness test that can be applied.

Also IANAL, but I would say no company resources. No company information, equipment, facilities, and nothing you didn't buy with your own money

Probably not working on it during work hours or times when people expect you to work, as well as from not within any company property. If you work on your project on weekends from the comfort of your own house or a coffee shop, that's cool. If you do it during lunchtime at work or on the company office property during weekends, that is a bit shadier, even though realistically there should be no difference. Try to make your personal project situation as clear-cut and separated as possible.

Are you working out of your employer's office? While you're in the office that's generally considered "company time", or at least company resources.

If you're working from home and don't have normal "work hours" then it's not so well-defined.

>Are you working out of your employer's office? While you're in the office that's generally considered "company time", or at least company resources.

It gets trickier if you are, say, eating lunch or are there after common working hours.

Ehhh, you're gonna be arguing uphill there. Maybe you can show the courts a distinction but if you're salaried, you'd be safest considering everything done in the office as "company time".

Doing outside work while on company property during normal working hours is probably a pretty good rule.

This is why contracting is much better when building your company on the side. I have nothing in my contract that states anything about the ownership of my code (that's not company property) or about my time.

The right thing to do is to write up a letter outlining your business plan and take it to management to buy off that it is not company business, in advance. Then you're in the clear, and there's no need to worry about it and no need to sneak around.

This will forever remain in grey area. I learnt almost all my coding skills from my first job as a programmer, I owe my mentor forever for whatever successes my skills will bring me in the future.

Isn't this a traditional thing to do at Apple? After all, Steve Jobs condoned it :)

"After several months of being sidelined, Jobs resigned from Apple on September 13, 1985. He told the board he was leaving to set up a new computer company, and that he would be taking several Apple employees from the SuperMicro division with him."


He wasn't being paid by Apple while he was working on NeXT though (at least I don't believe). I think the issue arises when the person is working for Apple then starts to work on their own company, not sure though

>He wasn't being paid by Apple while he was working on NeXT though (at least I don't believe).

He resigned on the same day he told them about NeXT, which had already had a good amount of work put into its planning (including poaching several apple engineers). I think it's reasonable to assume that before he resigned, he was being paid.

IIRC, there was a lawsuit which was settled. Check old Infoworld or other traderags.

it's hard to pin any actual evidence that he used company resources to plan/execute the NeXT startup though.

I believe GP alleges not that he was paid by apple at next, but that there was planning for next and recruiting happening before the moment of resignation, whilst still employed at apple, because he announced his plans and successful recruiting efforts to apple at the moment of resignation.

Seems to me to be pretty similar to this case, although, as noted down thread, it will likely hinge on the very specific details of this instance.

The irony here is amazing. Woz built the Apple I while being employed by HP and now Apple making sure that doesn't happen again.

He also tried desperately to get HP to make it an official HP product. HP wasn't interested.


Still, it was generous of HP not to sue him afterwards. It sounds like he was using company resources to build it, they would have had a strong case. Even if they were not interested in commercializing at the time.

I think in today's world, he would definitely be sued.

Today, it would be illegal for HP to sue him for it after having declined to take up the product when the employee first offered it to the company, because CA labor law explicitly addresses this situation.

This is in fact one of the ways that an employee can retain rights to an IP or product that is otherwise within the scope of the company's active businesses.

Companies can can do claim that ideas from employees are a company resource, even when worker is paid hourly and off the clock and the idea was on the employees own time.

Not really a fair comparison. While Woz was at HP, he wasn't the executive/leader of their personal computing division.

I don't see how anyone can fault Apple here when the person doing this was leading their entire chip division.

Scenario: I own car washes and hire someone to run and manage one of my locations. I pay them well and put them at the helm of the entire location. This person is able to completely learn the ins and outs of my business and in the meantime is slowly working on poaching other members of my staff and getting things lined up to open a competitive car wash.

Who's side are you on?

> Whose side are you on?

I'm on the side of allowing all employees, including executives and rank and file employees, to quit and work for a competitor without being sued. This is how a competitive labor market is supposed to work.

> quit and work for a competitor without being sued

"Quit" is the operative work here. The employee in question was building the competitor using Apple resources. He didn't quit and work for a competitor. He worked for a competitor and then quit.

>This is how a competitive labor market is supposed to work.

I wish it was that easy, it will work for small companies Until you run into economy of scale where your previous company has advantage over your own.

> While Woz was at HP, he wasn't the executive/leader of their personal computing division

Why does position even matter? Ultimately in this industry it's talent and skill that prevail. Woz was at least as capable, if not more, than anyone else working in a technical capacity at HP at the time. He arguably had better business sense than anyone at the company too because they had the opportunity to start the personal computer revolution but passed on it.

Not sure why the position is relevant, nor do I think Jobs's precedent was relevant.

"a duty of loyalty to the company" - wholly made up. The company has no loyalty to you.

"breached an intellectual property agreement" - this is the meat of the case. The rest is theater, including the subject.

You have skill and talent and you are paid to do a series of tasks. You can capitalize those talents in many ways to make money, working for a company is an option.

If you don't treat your employees well enough, they might leave and might even compete with you. We have laws to enforce this relationship at almost every possible turn. It's REALLY hard to get away with sabotage or inside information without quitting. Having your own LLC is great for a number of personal finance reasons.

This has nothing to do with loyalty. I agree that there is nothing wrong with this person going off to do their own thing. But getting that started on company time, including poaching other Apple employees, is totally out of line.

> But getting that started on company time, including poaching other Apple employees, is totally out of line.

This is easily resolved. He was simply on break every second he spent planning and recruiting for his startup.

Out of who's line? His and those employees line? They're temporary servants, not property.

I also offered his work to HP - who turned it down.

And Steve Jobs founded NeXT while on the clock at Apple. He even took a bunch of Apple engineers with him!

I don't think you know the whole story. He gave HP the option to own all his work on the Apple I, and he was aware the entire time of the conflict of interest with his employer, and vocal about it.

being aware and vocal would change anything? Not in legal world.

The rule of law has a lot of ambiguities and intent and context certainly matter.

If someone repeatedly says “you can have this” and you say “no” and then say “no wait I want it now that it is valuable” you probably don’t have an open and shut case regardless of what a contract says.

I’m not super familiar with Woz’s story so if that’s not what happened, my point was more about the ambiguities of the law and flexibility of its application.

He was both aware and vocal about it and tried to do something about it, but HP was not interested, which gave him freedom to pursue it independently with Jobs.

offering them the actual hardware and them refusing? Changes something in legal world.

"You are working it wrong!" :p

I feel that the law needs to have more customization due to power imbalances than it does today. Google cloning a startup's product should be less legal than a startup cloning Google's. A low-level employee should have few restrictions on planning a startup while employed, but a senior exec making millions has more power to stay unemployed for some time, a greater insight into his employer's business, etc, and perhaps should have more restrictions on the same. But business law doesn't usually have any such calibration for situation, the way that criminal law does where they take into account who you are and what situation you are in to determine a punishment.

I see what you mean, but that would kind of change "equal before the law". Laws should apply equally to everyone. Otherwise, you would have the same kind of twisted lobbying as we have now, but it would be on an uneven field, and the people with money would eventually turn the situation to _their_ advantage. At least if everyone's equal before the law, you can appeal to everyone in trying to repeal or change laws.

>Laws should apply equally to everyone.

Two things stand out. First is the quote:

>The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.

Second, the law including power imbalances as a reason to treat people different is already considered equality under the law. Consider we already have laws that treat certain groups of people different because of power imbalances. For example consider minors entering into contracts and how the law enforces such contracts.

The law also taxes people differently. Not just for income, but also family status. There are differences in how the law handles certain matters between two people when they are a spouse compared to when they are not (such as property transfers and social security).

The law also discriminates plenty based on age. For example, some people are allowed to withdraw funds from their tax deferred accounts while others are not, all because of differences in age (or in rarer cases other special circumstances).

If all of these are considered equal because the way the rules apply mean that you qualify when you are of the appropriate age/married/meet the specified life circumstances, then the purposed notion would also be equal as the law would equally apply to all when they are on the specific side of the power imbalance.

To set the standard the law must be equal to everyone would require re-evaluating much of the existing law and would fundamentally change quite a few facets of society.

That's the difference between equality and equity. I'd argue that people push too much for the former when the latter is sometimes more appropriate. I'd say this is one of those times.

Since we're talking about the idea of different treatment under the law for rich vs. poor (well, "comfortable", in this case), tax law in the US is a fine example: the more income you make, the higher your marginal earnings are taxed.

The problem with "equity" is that it can mean anything you want. The most blatantly unequal outcomes can always be rationalized as satisfying some higher justice.

The exact same can be said about “equality.” Any sensible system is a blend of the two.

> Since we're talking about the idea of different treatment under the law for rich vs. poor (well, "comfortable", in this case), tax law in the US is a fine example: the more income you make, the higher your marginal earnings are taxed.

That's technically true, but misleading.

The long term capital gains tax, which is what most high income earners end up paying, maxes out at 20%, which is lower than most of the regular income tax brackets. It's the reason some CEOs opt for a $1 salary.

That's technically true, but misleading.

The long term capital gains tax, which is what most high income earners end up paying, maxes out at 20%, which is lower than most of the regular income tax brackets. It's the reason some CEOs opt for a $1 salary.

This is simply wrong.

Equity paid as compensation is taxed as ordinary income at the value of the equity at the time awarded, and is subject to marginal rates.

The gains from holding that equity and selling it later is taxed as capital gains if and only if held for longer than one year prior to sale.

Which is why most equity is awarded as options, so not really

Options not being taxable is actually the exception in the US, since most companies that award options as compensation are publicly traded.

Capital gains tax generally only applies to assets that have been previously taxed as income. Equity grants whether to CEOs or normal employees alike are taxed as income at vesting time with subsequent gains taxed as capital gains. Capital gains taxes apply to both the rich and the poor, with the latter paying a whopping 0%.

>> Capital gains tax generally only applies to assets that have been previously taxed as income

No, it does not apply to previously taxed assets at all, only to an additional income you made from those assets. Equity grant is taxed when you excercise your stock options based on their current value. If the stock price goes up later, capital gains tax is only applied to the amount you gained, not the whole sum.

>No, it does not apply to previously taxed assets at all, only to an additional income you made from those assets.

I would call that applying to previously taxed assets. Unvested RSUs (read: not taxed yet) that gain considerably over many years prior to vesting are still wholly taxed as regular income. Without additional income, there is nothing to be taxed therefore there shouldn't be any confusion as to what I mean by that.

Stock options are only one type of equity grants, the other being RSUs which have a cost basis of $0 and therefore the entire sum is subject to income taxes at vesting. Exercising stock options is not free, you must pay to do so at the exercise price which is done using post-tax cash, which again, had to have been taxed as regular income at some point.

That's not really true, though.

It's true that if I buy some stocks for $100k I have (presumably) already paid taxes on that $100k. But if I sell the stock for $600k two years later, that extra $500k hasn't been taxed as income, and is only taxed as a capital gain.

> Capital gains taxes apply to both the rich and the poor, with the latter paying a whopping 0%.

Kind of silly to point that out. It's very easy for a "rich" person to have almost all of of their real income come from capital gains, but nearly impossible for many poor people to even have capital gains, much less arrange for it to be most of their income.

I’m not sure where we are in disagreement.

Rich people don’t become rich without first paying income taxes. Sure, once they have wealth, they mostly pay capital gains tax but if you and I have the same definition of rich, to sustain a luxurious life off investments alone, you had to have paid millions in income taxes which is more than most people will pay in their entire working years.

Additionally, turning $100K into $600K in two years is not as easy as you’re portraying it to be.

Hrmn. I suspect many rich people were born that way, and paid no income taxes in utero.

A better example would be where high earners can shift their incomes into corporate structures and thus treat themselves as a “business”, realizing many tax savings and write offs. A professional Corp making $500k will likely allow for a greater “take home” than a W2.

Capital gains, as others pointed out help in limited circumstances and typical equity compensation only marginally benefits.

Classes of people can be treated differently and be equal before the law.

Any person who is a police officer has X different rules for example.

This seems similar to tax brackets and anti-monopoly laws: the bigger the company, the more responsibilities it has.

Your idea about Google probably is hard to put into law, but in the same way that the law requires unemployment benefits for workers below a certain wage, it could (and I'd argue should) ban noncompetes for workers below a certain salary.

Not a lawyer, but I do not think that would raise constitutional or fairness issues.

> Google cloning a startup's product should be less legal than a startup cloning Google's.

Genuine question. The article is about Apple. Why did you use Google as an example instead of Apple? Is there anything specific to Google that warrants using Google as an example instead of Apple, which is the company in question?

This is HN. Every corporate example should start with google.

Or I think they dislike how google freemium model from ad revenue to push services has butchered many startups which would have been big today while apple is more secluded.

Think of gmail, chrome, gmaps, youtube, android, analytics, google cards, snippets etc. Only recently their revenue has more diversification than ads - at 89%.

Man I hope Apple loses hard on this one, but more importantly in the long run I really think Apple should hope they lose hard, too. A vibrant startup ecosystem can have tons of benefits for any platform company like Apple.

California may have tons of shit wrong with it politically, but man did they get it right when it comes to making non-competes and non-solicits unenforceable. Coming from Texas, non-competes and non-solicits have a huge stifling effect on startup formation in the tech world. I've hit it myself, and it is a major pain in the ass. Most companies have a non-solicit of fellow employees for a full year after you leave. Of course if you start a startup you're going to want colleagues you really liked to come work with you.

I hear about other states and locales that say they want to "be the next Silicon Valley" and I just laugh if they have enforceable non-competes and non-solicits.

Employee non-solicitation is in fact enforceable in California, e.g., see https://hkm.com/los-angeles/non-competes/non-solicitation-em...

When I worked at Apple there was mandatory training on non-compete, which included a lesson example that it would be in violation to create an iPhone app for gardening. Nuvia's genesis seems egregious in comparison. Will be interesting to see how this plays out.

Let me get this straight: You work 50+ hours a week (40 of which Apple actually pays you for) at Apple on official Apple projects. Then you buy an Apple computer with your own money, spend a bunch of your own "free" time at home writing a new app for Apple's iPhone, and submit it to Apple's App Store. Now Apple apparently has the gall to demand 100% of the revenue rather than their (already generous) 30% standard cut?

Talk about egregious.

That's why these FANG company pay outrageous salary.

It depends. There are some jurisdiction that argue, you are suppose to take rest and do your own personal stuff during your free time. Not working. Hence you are not allow to have a 2nd Full Time Job which will degrade your 1st full time job's performance.

My company doesn't get to tell me what I can do during my free time, does yours? Do you think that's normal?

I think it is normal in Good Faith. Your Company is paying you for your full time job, most people describe it a 9 to 5 when it is not. You are working during those hours, traveling back to home and then "resting". While traveling is not counted inside your working hours, some laws protect employees from the moment they step out of their home to work.

While it is entirely up to you what you do in your free time, but if your free time activities hinder your Full Time Job's performance, then it is a problem. And your employees do get to tell you what to do. You cant party all night and come back to work feeling sleepy just because it is "your" free time.

And that is especially true for someone in higher up position.

All the companies I ever worked for did, so I think it's normal even though it's some BS

To some extend, it's reasonable.

If somebody works at Apple, they might have access to internal iOS code or knowledge of upcoming APIs which gives them an advantage over external app developers. The person working at Apple need not be part of iOS team. They could get hands on this internal information through grapevine, friends or being in a cross-team meeting.

In such cases, there are 2 options:

(i) Allow the apps from Apple developers, not label them as belonging to Apple and pretend that the app developer has no extra advantage over external developers. This seems misleading and wrong.

(ii) The apps from Apple developers should belong to Apple.

>allowing the case to proceed but barring Apple from seeking punitive damages.

> Apple is not suing Nuvia itself or any of Williams’ co-founders and it did not allege any intellectual property or trade secret theft.

What exactly would Apple get here then if ruled in their favor? Petty revenge? A message they can send to current employees? Comp for hours he spent on the phone?

> A message they can send to current employees?

This probably is the main reason. Apple has been constantly losing its best talents on chip design. I believe they're very concerned about his leaving which may accelerate this trend.

They'd probably be claiming ownership of the new company based on the fact that they own their employee's work product.

In reality they will get far enough into the case to determine whether or not they (likely) own any of the business and then settle for a tidy sum or some stock or something like that. They're probably also interested in locking up an IP the company owns (which is probably more important than the money).

Sending a message is a nice perk.

His share of the new company I thought? Plus, like you say, a warning to existing employees.

His share of the new company is likely to be worthless if his input would have made the company a success (assuming he wouldn't carry on working on it, and it would be really weird if he did.)

So this is really only about sending a message to other employees.

Unless his input has already been (mostly) completed? If his contribution was organising, introducing people and getting things setup and running then he can leave and the company will roll along just fine?

I don't get how Nuvia competes with Apple though. Apple isn't in the server chip business... they just are in the mobile chip business. That is, unless Apple is admitting they're designing their own Arm-based CPUs for their data centers?

>That is, unless Apple is admitting they're designing their own Arm-based CPUs for their data centers?

I would not be surprised. AWS intend to have all of their SaaS and PaaS ( Not IaaS ) running on their own ARM CPU, which means all of those Software will be tested on ARM. The chicken and Egg problem is no longer there, it is only a matter of time before ARM takes a sizeable web server market.

Apple, given their scale, might well be exploring the idea as well.

Just abstract it to chip provider.

That's not reasonable and is not the same market. There are chips which manage jet engines, MPTT solar panel chips, FPGA's, etc. You cannot possibly claim those are relevant.

How is it even a "rival"? Apple does not make server-grade CPUs. Nuvia does not compete with them at all. I hope to dear god Apple fails at this.

Wow, TIL. Does this even make sense financially for anyone?

Looks like it starts at only $500 more than the desktop version but I didn't bother comparing specs. I have a friend with a 192GB new Mac Pro he's using for video production and he's currently testing it and finds it outperforms his HP Z8, he's very happy so far.

Does it have the same CPU as Z8? Because if it does, I don't see how it would "outperform" Z8. It's a PC, in a nice, expensive machined case.

It actually has a slower CPU, and fewer of them, according to him. But these kinds of machines are where GPUs, architecture, and software all come into play. Cores, bus speeds, subsystem speeds.

There's vastly more to computer performance than the reductionist "It's a PC, in a nice, expensive machined case". In fact, that sounds condescending and dismissive rather than a comment in search of enlightenment.

But all of those things you've enumerated are available in a PC - Apple only makes the board and a few smaller unimportant chips that don't affect performance. You're not comparing apples to oranges when you say that MacPro is faster somehow. It'd run at identical speed given the same CPU, same GPU and same RAM.

There might be benefit from some of the extra bits available (the specific GPU in Mac Pro is not exactly easy to replicate elsewhere as it's a custom twin GPU setup with extra bus for cooperation with another unit if necessary) + the FPGA codec card that might be exploited by the stuff he does for work.

Replacing a software-only codec with hw accelerator card would go a long way to explain performance difference.

Well, you're clearly incorrect, but I don't work in high end video production so I can't give you precise details as to why.


Sure, if you're a creative professional or Mac developer you are probably making at a minimum 20x the cost of this box. If you're in an office a rack mount helps save a lot of desk space, which more than pays for itself. Also lets you get away from the sound.

Rackmount doesn't mean server. My understanding is that the main reason they are offering that option is that many recording professionals want to be able to rack the macpro with all their other equipment which can then be placed outside the recording booth or put on wheels to move around with all the other equipment.

Correct, though my first search for "Mac Pro Server" actually turned up their server software that you can buy on the app store for, I swear it said $1999, and the image was of a laptop.

I bet you're thinking of macOS Server [1], which costs $19.99 (twenty dollars).

[1] https://www.apple.com/macos/server/

Well, now I feel like I'm in a jack in the box ad.

What about a rackmounted Mac Pro doesn't qualify as a server?

It is designed to be a user workstation. In some industries, such as pro audio, you often literally have a standard rack built into your desk where you can install your desktop. In these environments, it is not uncommon for your desktop computer to be rack mounted.

Since this is one of Apple's markets, it makes sense that they would cater to it. Dell also sells some desktops with rack mounting options for the same reason.

...the architecture of chip inside?

And if I had to bet, the lack of ECC RAM.

But mostly the fact that they're not selling it as a server.

This argument feels...meh.

They are from 12 to 28 core Intel Xeon Ws with up to 1.5TB of ECC RAM. Also has two 10GB Ethernet ports.

2019 Mac Pros require ECC RAM (not that this qualifies anything as a 'server').

Every RAM option on that configurator is ECC RAM, and every processor option is a Xeon.

Nuvia makes _chips_ for servers, not the servers themselves. Given that Apple also makes chips, it seems like a pretty fair argument

>> Apple also makes chips

But not _for servers_. It's like saying Qualcomm is a rival of Intel when it comes to CPUs. The two do not overlap at all.

1) I think Apple could easily argue it was planning on leveraging it's chip design and manufacturing expertise into other areas. That's pretty reasonable. I could be seem them exploring licensing some of their IP to other manufacturers for example - ARM servers are gaining traction and Apple is a leader in the ARM space

2) Seems like the whole "rival" piece is not material to the lawsuit itself and is just a bit of editorializing on Reuters' part. The lawsuit probably centers on duty of loyalty and breach of contract

...but...they do? Qualcomm Centriq directly competes with Xeons (or is intended to) and they build wireless solutions for devices and until recently directly competed on smartphone modems!

Such a powerful rival, I wasn't even aware of the competing product. OK, pick another one of three dozen ARM manufacturers as an example.

I agree that Nuvia doesn't compete with Apple but Qualcomm is actually a rival of Intel now because of their 8cx platform that's going into ultrabooks.

Lucky Californians. Here I am with a non-compete clause that prevents me from working in my industry for 12 months...

How are you supposed to survive if you can't work in your field for a full year? And then if you are required to work in another field, you are going to get punished by the interview process when you try to come back.

In finance, where non-comptetes are regularly enforced, the answers are typically 1) garden leave [1] and 2) generally not, it's a built-in expectation.

[1] https://en.m.wikipedia.org/wiki/Garden_leave

Ok, that doesn't sound so bad now, kind of a 12 month PTO, which is unheard of anywhere else. What am I missing?

One big thing that makes it not as good as it sounds is that it's just your salary. In the industry, that can easily be less than half of your total compensation with bonus. Not that that's anything to sneeze at, but it certainly adds to the opportunity cost of switching roles.

It's not unheard of elsewhere, but it certainly isn't common for engineers and line level managers. 12 mo is longer than average probably, but for an exec role or a key position it's not uncommon to get a severance term that includes pay for non-compete months.

Not in Finance, tech. No garden leaves. I'm a dev, fortunately, the non-compete does not cover programming or tech as a whole. I can't work in Blockchain and Fintech, which is the focus of my startup.

They pay you for those 12 months. At least that's how it works in trading here in Chicago.

They pay you salary, but IIUC not bonus, which, depending on your role, could be more than half of your usual compensation. That's a big price to pay over 12 months just to change employers.

Garden leave is paid, you’re also still essentially employed so no gap on the CV.

You get a new job before leaving, they’ll wait.

On a bit of a tangent, are CV/resume gaps still frowned upon in 2020? It's kind of ludicrous that one unbroken stretch of continuous work seems to be some kind of ideal.

From my experience it just creates another question for the interviewer, i.e. "What were you doing during this period?".

Similar to how banks view gaps in employment as additional risk when applying for a mortgage for example (at least in the UK).

If you're making >80k USD a year, regardless of region, and you don't put away money for the unlucky years that you aren't making that much, you deserve to starve.

Leave beneath your means - ALWAYS.

Would you please stop posting unsubstantive and/or flamebait comments to HN? You've been doing a lot, and it's not what this site is for.

If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.

In my first frontend dev job for a startup, the contract was absolutely ludicrous. I believe it was something like I can't work in a related industry (tech) or with any clients of the company or the specific domain of the tech I was working on etc etc. For a year.

Had a lawyer look it over who said it was highly unlikely to be enforcable, then I got the company to basically remove the parts that didn't fly.

That's my mistake, always ask a lawyer when you see sketchy stuff in a contract. My situation is similar, I'm a dev for a startup and the non-compete covers the domain/focus of the startup (Blockchain), I can still be a dev for other domain stuff.

It can be an intimidating thing to challenge, and was awkward as hell to pull my boss aside and say "Can we talk about some concerns I have with this contract?", then proceeding to show him huge swaths of text that needed to be removed.

They said it was just kind of a stock contract they used, and I'm willing to believe that I guess because it wasn't a fight to get them to remove it. The lawyer specifically said that it would be on them to prove the clauses relevancy, but your mileage may vary. She pretty much laughed at it and charged me for like 15 min to 30 min of time.

You should never sign one of those unless your employer provided you with the skills to enter that industry.

But if you started the job already possessing those skills, then that's essentially your profession. Them asking you not to work in the industry for 12 months after leaving the job is akin to asking a lawyer or docter not to practice law or medecine after leaving a firm or clinic. It's a major overreach.

I am a developer for a startup in the Blockchain space. I definitely could code before that job. The non-compete covers any company that deals with Blockchain.

My very first job out of college was with a company that put us through a 6-month training program and paid us our regular salary during it. I found it fair they asked us to sign a contract promising to remain with the company for at least 1yr after the training program ended, and signed that. They didn’t ask us to sign a non-compete, but did ask us to sign a no-solicitation agreement (eg don’t poach their employees after you leave), and I found that fair too.

A subsequent company later asked its developer hires to sign a non-compete agreeing not to work in that industry for 1yr after leaving. But they were hiring us for skills we had already developed prior to joining, and contributed no training or skill development. All the developers refused to sign that and explained how you can’t expect people to agree not to work in their profession if they leave a company.

The CEO of that co realized they had overstepped and cancelled the non-compete request, which was cool. It was just an overprotective legal department pushing the limits of what they could get away with.

Regarding your contract, is your company’s blockchain product open source? Almost all of them are, since the whole point of blockchain is trust. If that’s the case, then their non-compete may be pointless, in that it doesn’t protect any actual trade secrets since they’re all open source. Also depending on what state you’re in, your non-compete may not be legal. Worth looking into.

Life's not so bad here - welcome to come anytime

What industry are you in?

I am a developer for a Blockchain startup in Europe. The non-compete prevents me to work for any company that has anything to do with Blockchain for 12 months. I don't know if I can call Blockchain an industry but that's my area of expertise and nowadays many tech company are doing Blockchain for the hype.

"Apple sued Williams in August, alleging that he breached an intellectual property agreement and a duty of loyalty to the company by planning his new startup while on company time at Apple, spending hours on the phone with colleagues who eventually joined the venture."

If that's the case, then "no" that shouldn't be allowed.

I'm not saying you're wrong as that was my initial reaction too. I am curious though, how does being a salaried employee factor into this? I mean, is there really a designation of what is company time? Is it because, he's in the office, even if he's using his own phone? You could say that he isn't technically on the clock, since they aren't paying him a wage for that specific slice of time. I'm genuinely curious. Is there case law that factors into this?

The article does go on to say:

> The case will likely hinge the specific facts of Williams’ planning for Nuvia, Palefsky said. Given that work at modern tech jobs rarely sticks to traditional business hours, it may be difficult to untangle whether calls were made during company time or personal time.

That's actually a pretty fair thing. Apple may define, for example, its "company time" as any time the office is open and accessible to employees -- which is a pretty wide window.

But like most tech companies they give their employees a lot of freedom to adjust their hours. If the employee is free to take an hour during the normal workday to pick up groceries, it stands to reason they can use it to recruit their friends for a venture.

Yes, that's what I was thinking too. If it's normal and commonplace for someone to step out for an hour to run an errand, how is that any more "company time" than ducking into a conference room, or (safer) heading to the garage and sitting in your car to make some recruiting phone calls?

I’m not sure that does follow - Apple allows the employee to take an hour to pick up groceries as it makes the employee less distracted, more focused, and a more valuable asset to Apple. Not sure that applies to planning a competitive startup on company time.

Extraordinary claims, though, require extraordinary proof. And the onus is on Apple to prove what they allege. Somehow I don't think the judge will agree with your rather lax definition of "company time". I'd define it more reasonably as "time during which company resources were used or company work was claimed to be done", i.e. you're in the office, or using company hardware at home, or specifically claim to be working from home, stuff like that.

IANAL but this is a civil suit so the standard is going to be a "preponderance of the evidence." Both Apple and Williams could have solid, equally valid arguments for their side and one small detail could tip the scales to either direction. Beyond demonstrating the basic facts of the case, Apple doesn't have to prove that Williams was 100% doing it on his own time, just muddy the waters enough for some other detail like using a company device or recruiting coworkers to put them over the top.

That doesn't preclude the jury deciding in Apple's favor but then awarding them something symbolic like $1.

Even _that_ can be dicey, though. I can imagine being at a meeting with coworkers and concluding with, "hey, I'd like to talk to you about something later," to one of them. Later could've been outside the office -- it's unknown. That sounds like company time, but feels a little wrong. I think this case is going to be very heavily dependent on technicalities.

I've worked at Apple and other larger tech companies.

They largely work traditional 9-5 hours and whilst people will work longer hours around key deliverable dates it's entirely optional.

You can bet that's how they are going to try to define this.

I agree with you in general that Williams overstepped reasonable bounds on what he could do in planning his new venture. But the one phrase that jumped out at me was the "duty of loyalty to the company". I am reminded of all the articles I've read that describe companies that exhibited no loyalty whatsoever to their employees. I'm also reminded of the articles describing the working conditions of the people who are actually manufacturing Apple's iPhones. I know that these aren't actual Apple employees, but Apple has to know about the working conditions, and it seems to me that Apple just doesn't care.

>duty of loyalty to the company

It's interesting that this loyalty is only one-way. If someone is employed at Apple and Apple takes time to lay someone off while they are employed and not clearly deserving of being fired, there is no implicit claim of loyalty.

Note that "duty of loyalty" here does not mean "love and cherish Apple until death us do part", but is a specifically defined legal term, essentially prohibiting self-dealing using company resources: https://en.wikipedia.org/wiki/Duty_of_loyalty

I'm really interested in the findings. How can Apple prove any of these claims?

I wonder if they would use his iphone data (assuming he has one)?

Would that be admissible in court?

Does Apple just have carte blanche access to any data they have?

I mean, I guess so, there’s probably some EULA I haven’t read.

But I’d think their privacy stances would let you sue them if they snooped through your iCloud backups.

Unless it was a company phone in which case their employees probably have a separate EULA like most corporate devices.

Just like you hopefully wouldn’t stream a torrent over your corporate VPN.

In a case like this, they would just request the information through a legal procedural called "discovery" in which a party is required to turn over requested information relevant to a legal matter to the opposing party.

In short, it doesn't matter if they don't have EULA or technical access to the data.

They would never snoop on a personal device - the risk of loss of user trust and pr has to be immesurably greater than any potential benefit. Maybe he used devices owned by Apple to work on his company.

Apple gives its employees free iCloud space though, what if his stuff was backed up into that?

Of course not.

> According to a copy of Williams’ agreement that Apple attached to its complaint, the contract required that Williams “will not plan or engage in any other employment” that competes with Apple or is directly related to the company.

"You may not engage in work, necessary for your survival, with anyone but us." - how is this not one step removed from slavery? Unless he works for Apple, all he's allowed to do is untrained labor!

And just like forced arbitration, this will become a standard element of contracts if we allow it.

So much for being open minded about ever working for Apple. This is extremely hostile to individual freedom

Doesn't seem hostile or unreasonable. He was a senior director that potentially stole IP and also committed a breach of contract by poaching employees.

I'd say if he _did_ do those things, that seems like something that would merit serious legal action.

It doesn't seem Apple is even claiming he stole IP. Apple's complaints seem to be [0]:

1. "Breach of Contract" in starting a competing business while employed there, which was apparently prohibited in his employment contract.

2. "Breach of Duty of Loyalty", again for starting a competing business while employed there.

There are no claims around theft of trade secrets or violation of copyrights or patents. This seems like an overreach by Apple, but Williams also seemed to be playing with fire by being fairly cavalier in breaching his contract with an employer known to be litigious. It will be very interesting to see where the courts land on this.

[0] https://regmedia.co.uk/2019/12/10/apple_v_gerard_williams.pd...

He also had access to employee’s personnel files, which included salaries and stock vesting dates. This gave him info on who to recruit and the best time for that employee to leave. That’s a bit different than asking a co-worker if they'd like to quit and join a startup.

That doesn’t sound illegal or especially unethical, and probably in itself isn’t even a violation of his employment contract (though solicitation probably was). If he was deliberately depressing bonuses or promotions to get people to leave, that would be different, but that doesn’t seem to be the case.

Ah my bad, I think I misread this paragraph:

> Apple sued Williams in August, alleging that he breached an intellectual property agreement and a duty of loyalty to the company by planning his new startup while on company time at Apple, spending hours on the phone with colleagues who eventually joined the venture.

> poaching employees

Getting his trusted friends and colleagues to work with him?

Yeah I thought that was pretty common. About 7 years ago I watched a VP walk out to do a startup and he took several key guys with him as his starting dev team, and within a year hired off one more dev and a manager. In California.

Of course, I don’t know what was in whose contracts. Maybe that’s something you negotiate for?

The article states that Apple is not pursuing theft of IP or trade secrets.

Poaching employees though... definitely hairy.

They are probably his friends / buddies, seems natural.

> duty of loyalty to the company

Oh please my sides, they hurt, I can only laugh so hard.

Not sure why you're laughing, this is an actual legal term: https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi...

That's for directors and stockholders, not random employees.

The concept also applies to random employees. For example, if an employee placed in charge of a shop charges customers more than the set prices and keeps the difference for himself, that would be a breach of the duty of loyalty. The idea is that the employee is abusing the trust placed in him and appropriating the company's business interests for himself. It can happen at any level, from executives with conflicts of interest to employees stealing from the till.

> Apple filed the lawsuit in Santa Clara County Superior Court against Gerard Williams III, who left the company last year after more than nine years as chief architect for the custom processors that power iPhones and iPads to start Nuvia Inc, which is designing chips for servers.

Chief architect. AKA engineer.

His LinkedIn literally says, "Senior Director": https://www.linkedin.com/in/gerard-williams-iii-27895aa/

It's not like he was some kind of low-ranking IC engineer

Director in this sense does not mean what it means in the definition for "duty of loyalty", which is talking about board members, not (even high-ranking) employees.

Wikipedia is good for a broad definition of the term "duty of loyalty" but in CA that duty extends to all employees (see e.g. https://www.sandiegouniontribune.com/business/sd-fi-eaton-26...).

Well, being a "senior director" (sounds like an oxymoron to me) would seem to apply.

I'm laughing because my understanding is that he's an employee, if he's beholden to fiduciary duties then it's a different situation.

I get the impression he’s trying to extort Apple into buying this new company — which, if true, is not cool man

Putting a price on his skills and talent? How dare he!

That’s not what extort means.

It DID work for Anthony Levandowski, for a while: According to Wikipedia, Google bought two companies he started as side projects while working for Google.

It kind of boggles my mind that they would not anticipate this pattern eventually ending badly.

if he is, this is probably just a negotiating tactic, everyones playing hardball, what fun

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