There are plenty of good reasons to be an entrepreneur. But Apple is alleging in a new lawsuit that entrepreneurs shouldn't get their start while working at an existing employer.

Apple is suing Gerard Williams, a former employee who left last year to start a server chip company called Nuvia, according to Reuters. Williams was formerly employed in Apple's chip division, where he served as chief architect for the processors Apple uses in iPhones and iPads.

While leaving the company isn't necessarily a problem, Apple alleges that Williams violated the company's intellectual property agreements and breached a duty of loyalty to Apple by allegedly planning and strategizing his startup while employed at the company. 

Apple sued Williams in August and included in its lawsuit an employment agreement he signed that said he would "not plan or engage in any other employment" while at the company. Apple also said that Williams talked to fellow Apple employees during work hours to gauge their interest in joining his new venture, according to Reuters.

But even if that's true, it's not necessarily a bad thing in the context of California law. Williams argued in his response to the lawsuit that California law in no way limits an employee's ability to prepare for a new venture. There's also little precedent in California that sides with the employer over the employee.

Indeed, the judge in the case, Mark Pierce, already ruled last week that Apple wasn't entitled to any punitive damages in connection with the lawsuit. He did, however, allow the case to continue. What that means in the broader context of the case and a possible ruling is unknown.

Regardless, the case highlights an important concern for employers and employees. 

In a job market that increasingly encourages side hustles and other forms of entrepreneurship, more and more employees are going to consider starting their own companies. And, in many cases, those companies may compete with their current employer. The employer obviously doesn't want the additional competition or for employees using working hours to plan their next move, but actually policing it is exceedingly difficult.

With the amount of power and influence Apple has, a lawsuit of this sort seems rather surprising--especially in California where the chances of succeeding are slim. It's possible that Apple is using this filing to warn other employees against starting their own businesses on company time. After all, that can prove to be costly over time.

Published on: Jan 21, 2020
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