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New Apple iPod chief fights IBM for right to go to work

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When Mark Papermaster decided to leave IBM for Apple, it sent a strange signal to many industry pundits. Why would Apple, Inc. (NASDAQ: AAPL) be hiring a dyed-in-the-wool microchip designer to run its consumer products division? Does it need help in the hardware engineering department or is it out to create another breakthrough in consumer product design to keep the iPod and iPhone cash cows alive as those categories age?

Although we didn't get an answer to those questions, Papermaster was forced to play a bit of tug of war, at least legally. IBM Corp. (NYSE: IBM) was able to convince a judge to put an injunction on his reporting to work at Apple due to a non-compete clause with his former employer. Papermaster has now countered by saying that IBM and Apple do not compete at all in the area where he will be employed at Apple. He's right -- in fact, IBM and Apple don't compete on any level at all any longer.

So, we have to wonder what IBM's beef is here. Some clauses in his contract with IBM are so broad that apparently Papermaster should not be able to work for any tech company for a year after leaving IBM. The non-compete portion of this contract states that he can't go to work for the competition, even if there is no competition in the product space. In other words, Papermaster's countersuit will try to find this section of his contract to be invalid due to the fact that IBM's interests won't be hurt in any way by his employment at Apple. Good luck on that one. Today there will be a meeting between the two companies to hash out details, so this may become a bit thicker soon.

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Last updated: November 25, 2009: 04:59 PM

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