Tuesday, July 22, 2008, 10:46 AM

Motorola Accuses Former Executive of Breaching Noncompete In His Apple/iPhone Employment

By Todd
Crain's Chicago Business is reporting that Motorola, which is struggling in the mobile handset sector, sued former company executive Michael Fenger on Thursday in Cook County (IL.) Circuit Court. Motorola alleges in its suit that Mr. Fenger not only breached his employment contract by going to work for a competitor within two years of resigning, but that in his new job as Apple's vice-president of global iPhone sales, he “cannot separate out Motorola's trade secrets from his daily duties at Apple.”

"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,'' according to the complaint.

“Motorola is seeking all available remedies to protect its trade secrets, confidential information and customer relationships," a Motorola spokeswoman said.

Specifically, the suit asks for Mr. Fenger to be barred from working for Apple or any other competitor until March 2010. Motorola also wants Mr. Fenger to return more than $1 million worth of stock options he has received as part of his employment contract during the six years he worked at Motorola.

By accepting those options, Mr. Fenger agreed to a non-compete clause that keeps him from working for a competitor within two years of leaving the company, Motorola said. The company also claims Mr. Fenger recruited away two former Motorola employees, something else prohibited under terms of his employment contract.

This is a high-profile hybrid case that combines noncompete breach arguments with the inevitable disclosure doctrine. The latter doctrine - essentially a contention that one cannot do their job for their new employer without inevitably utilizing or disclosing the trade secrets of their former employer - is one that has been slow to gain jurisprudential traction since its original appearance in the 1980's but we'll keep an eye on this case and report back how the court treats Motorola's claims and Mr. Fenger's defenses.


Blogger Chris said...

Is there any update on this case. I am executive level sales manager in the BPO industry and my former employer is aggressively pursuig legal action to prevent me from staying in the BPO indudstry. This will most likely cost me a executive level position at one of the largets BPO companies and severely limit my choices of employment over the next year.

November 9, 2008 at 8:26 AM  

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