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  • Yes, Folks, Apple Has the Right to Fire People Who Break an NDA!

    April 26th, 2010

    A recent blog posting from none other than Steve Wozniak, Apple’s co-founder, reports on the sad tale of an Apple employee who got fired for breaking Apple’s nondisclosure agreement. Seems the employee in question let Woz, who remains part of Apple’s staff, spend a couple of minutes using a prerelease 3G iPad. Unfortunately it was done outside of Apple’s “secure areas,” and thus that person, an Apple engineer, is now looking for another job.

    End of story — or is it?

    The tech press continues to go after Apple for its secretive nature, but pretty much all companies that actually build products require that their workers sign some sort of NDA that addresses trade secrets. Those terms might cover whether you can remove a prototype product from the test labs, who has access to a software release, and what you can say about the product in question to a third party, even to your own family.

    If you break that agreement, the company has the right to go after you. They might let you go, file legal action or maybe just give you a stiff reprimand. It all depends on the terms of the agreement, and Apple isn’t alone in choosing to enforce such agreements. Once you allow some employees to break the agreement, and try to enforce it with others, the folks who suffer the consequences may have the right to complain about favoritism. It may be enough to sustain a legal complaint.

    In short, as much as I don’t want to see someone lose their job, once they agree to protect their employer’s trade secrets, they will face the consequences if they break that agreement, however innocent the act may have been.

    I realize that Woz’s article is no doubt meant to create public sympathy for the Apple engineer who got canned. As much as you have to respect Woz for his early contributions to the PC industry, the fact of the matter is that he has been essentially out of the picture for decades, even though Apple continues to send him a paycheck. He is clearly not involved in company affairs, although he supposedly remains close to his fellow co-founder, Steve Jobs.

    Now it may just be that the employee in question was naïve enough to believe that showing a prototype gadget to Woz would be all right because of who he is, even if he did violate an Apple NDA in doing so. If that’s the case, maybe Woz should contribute some of his great wealth to helping the affected party file a legal action to get that his job back, or maybe give him some extra cash to tide him over until new employment is found.

    At the same time, the Apple worker who allegedly left a prototype iPhone at a bar, identified as Gray Powell, evidently is still employed. Maybe the action was deemed accidental rather than deliberate, although it was clearly monumentally stupid. If this device is truly a prototype of a fourth generation iPhone, surely Powell had enough common sense to know that one has to observe supreme care. Maybe Apple expected people like Powell to test the iPhone’s network connectivity in different locales, and perhaps a bar was a suitable test bed. But why was it left there? Did Powell have a little too much to drink, did someone lift it from his backpack or shirt pocket?

    What we do know is that, rather than return it to the bartender, which is the normal way of handling lost items, the person who recovered that prototype contacted the media and tried to sell it. Gizmodo bit the bait, reportedly to the tune of five thousand dollars. But was that the ethical thing to do?

    In the end, Gizmodo claims that they answered an Apple legal demand to return the device by shipping it back. However, there is the open question of whether they are complicit in a possible crime, acting in concert with the person who originally recovered this lost property and opted not to return it to its owner, or someone who could keep it safe until the owner returned.

    In the end, the authorities probably have other concerns, such as chasing after speeders and drug dealers. Then again, several computers, servers, an iPhone and other items used by Gizmodo editor Jason Chen have reportedly been seized by the authorities as part of their ongoing investigation of the incident. This case may have legs, and the outcome might not be so pleasant for the online publication, since this may be a felony offense.

    As I’ve said in the past, Apple has the right to keep product development plans secret. They also have the right to require employees and third-party developers to sign NDAs agreeing not to disclose trade secrets.

    Feel free to complain about Apple’s policies, if you don’t approve of them. You also have the right not to buy their products in protest, or simply because you prefer the way other companies handle their product marketing and release strategies.

    But Apple will still continue to act in their own best interests, and that approach has made them supremely successful.



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    7 Responses to “Yes, Folks, Apple Has the Right to Fire People Who Break an NDA!”

    1. dfs says:

      Yeah, yeah, everything Gene says is right. But let’s look at it another way. The is Woz Himself we’re dealing with, and the poor employee may well have taken it in his head that he’d be fired if he did NOT let Woz see the iPad. Here we have a guy who found himself in an extremely awkward position and made what turned out to be the wrong call. Okay, so put a letter of reprimand in his file. But for heaven’s sake, this isn’t a firing issue.

      • @dfs, which is why I think Woz ought to do something about it.

        Peace,
        Gene

      • Karl says:

        @dfs,

        Getting fired for not letting Woz see it is a very big stretch. I just don’t see that happening as the employee would be following the NDA that he and Apple agreed too.

        But I think that the device was outside a secured area and probably had more to do with it than showing it to Woz. Either way, the employee knew that he was breaking his NDA and got fired for it.

        As far as the guy losing it at the bar… definitely sounds like it was accidental or possibly even some sort of guerrilla marketing by Apple.

    2. Joe Anonymous says:

      “The is Woz Himself we’re dealing with, and the poor employee may well have taken it in his head that he’d be fired if he did NOT let Woz see the iPad.”

      That is, of course, nonsense. Please name one person who has EVER been fired at Apple for abiding by an NDA.

      Woz doesn’t get any special privileges. If he did, he would have asked Steve to show him the iPad. The fact that he couldn’t get it through normal channels would lead most people to understand that he wasn’t exempt from the rules.

      Not to mention, of course, that it wasn’t just Woz who saw it. There were a bunch of other people around at the time and the person allowed a picture to be taken and published all over the internet.

    3. Peter says:

      While I agree, in principle, I’d expect a company to be understanding.

      In this case, he let Woz use an iPad 3G (non-WiFi) immediately after April 3rd. But because the iPad 3G was not yet released, he was showing someone “pre-release” hardware. If you go by the book, the employee should be fired.

      On the other hand, this is as stupid as the kids who get suspended or expelled from school with “zero-tolerance drug policies” because they were carrying Tylenol. I mean, come on! He’s showing a variation of the product–and an announced variation of the product–to a distinguished Apple employee! If he had shown an iPad without the 3G, he’d have been fine!

      Yes, by the letter of the law, he should be fired just like the kids who bring Tylenol to school should be suspended or expelled. But it looks really stupid.

    4. Eurobubba says:

      Having the “right” to do something doesn’t make it the right thing to do.

    5. Andrew says:

      Speeders? The authorities should not go after speeders, at least not in California where I live and drive far too many miles to do so at anything near the speed limit.

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