January 24, 2020
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Apple Inc. (Apple) has launched a breach of contract lawsuit against its former lead chip engineer, Gerard Williams III. During his tenure at Apple, Williams was one of the main architects of Apple’s mobile platform. He oversaw the development of Apple’s A-series chips, starting from the A7 found inside the iPhone 5s to the A12X, which powers the iPhone XS/iPad Pro. In February 2019, Williams left Apple and started his own chip company called Nuvia Inc. (Nuvia).
Apple’s action against Williams centres on his departure from the multi-national corporation, and the company’s allegation that Williams broke his employment contract with Apple by making plans to form his own company while still employed by Apple. Apple alleges that Williams used the knowledge he gained while working on Apple's chips to establish Nuvia. Moreover, Apple claims that Williams recruited other Apple employees while he was still employed by the company, in violation of the non-solicitation provision of his employment contract.
Apple believes that Williams spent his days at Apple (when he was contractually supposed to working on tasks for Apple) planning and recruiting for Nuvia. In a motion to dismiss the action, Williams denied these claims and argued that the clauses of his employment contract that Apple is trying to enforce are illegal. In his counterargument to the Santa Clara County Superior Court, Williams argued that his contract with Apple was unenforceable, since California state law allows employees to make some plans to compete while still in their current job. However, the court rejected Williams’ arguments, stating in a tentative ruling 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.”
The eventual resolution of this lawsuit will have important implications for employees, in California and beyond, who are contemplating leaving their 9-to-5s to venture out on their own and launch start-ups.
Author: Danielle Palter
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