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1) The ex employee in question did not sign an Employment non-compete agreement, he signed an awards program agreement that had nothing to do with his terms of employment.
2) The jurisdiction agreed upon in that agreement is Westchester County NY.
Add the fact that it IBM who is making the suit against the individual, not Apple,I think it is beyond ludicrous to assume that IBM is maying a frivolous complaint. However, what do I know!
johnmwillis.com
IBM's complaint (copy here- http://blogs.zdnet.com/BTL/images/papermaster1.pdf) cites a Noncompetition Agreement that Papermaster signed.
I didn't find a copy of the complete agreement on a quick search and I don't know the full context of his employment arrangement, but the basic point remains the same- noncompetes are enforceable in New York and not in California. Fadell therefore gets paid ~$8.4 to be an advisor to Apple and Papermaster gets sued by IBM in Manhattan. It would be hard to find a more stark example of how this issue plays out.