Motorola sued a former executive for allegedly violating a noncompete agreement by taking a job as head of global iPhone sales for Apple and helping Apple hire two other former Motorola employees. The suit, which alleges breach of contract and threatened misappropriation of trade secrets, follows a deterioration in Motorola's cellphone business in the past 18 months. That has led to an exodus of employees to rivals including Apple, BlackBerry maker Research In Motion and Cisco Systems.
The suit was filed in an Illinois court against Mike Fenger, who quit Motorola in March as senior vice president of mobile devices for Europe, Middle East and Africa to join Apple. The suit alleges that Fenger agreed when he received stock options to refrain from working for a competitor for two years after leaving Motorola. It doesn't claim Mr. Fenger stole documents, but simply that Mr. Fenger learned about the communications industry through his work at Motorola. "In his new position ... he cannot perform his duties for Apple without inevitably disclosing Motorola's trade secrets," the lawsuit states. The suit didn't name the two employees he allegedly helped Apple recruit. The lawsuit seeks to enjoin Fenger from his job until March 2010, and seeks reimbursement of millions of dollars in stock options. Motorola said it "is seeking all available remedies to protect its trade secrets, confidential information, and customer relationships."
More recently, Motorola's senior vice president for supply chain, Rita Lane, became the latest executive to move to Apple. Apple also has hired a Latin American sales executive, Ornella Indonie.
Among the high-ranking executives who moved to rivals are former Chief Technical Officer Padmasree Warrior, who in December joined Cisco, Motorola's main rival in the cable set-top box business. Motorola also sued an ex-manager who went to work with former mobile-device chief Ron Garriques at Dell.
The company has taken court action against former employees before. In 2005, it filed suit against former Chief Operating Officer Mike Zafirovski when he was hired as chief executive of Nortel. In a settlement, Zafirovski was enjoined from contacting certain customers and from shaping Nortel's strategy to compete against Motorola for 18 months after he left.
More recently, Apple has been among the primary beneficiaries of the exodus from mobile devices, as it has boosted hiring of engineers and others with know-how about mobile devices to help get its iPhone business off the ground. This spring, it held a recruiting fair in a Mundelein, Ill., hotel near the Libertyville headquarters of Motorola's mobile-devices division.
Given his international experience, Fenger was a valuable hire for Apple, which has made global expansion of the iPhone a priority. The original iPhone was available through carriers in only a few markets, but Apple last week began selling the new iPhone in 21 countries, most of them in Europe. By the end of the year, Apple has vowed to sell the new product in more than 70 countries, including markets in Latin America. Before overseeing Europe, Middle East and Africa for Motorola, Fenger had run the Latin American operations. (info from The Wall Street Journal)