RIM Takes Motorola to Court Over Hiring
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Research in Motion has filed suit against Motorola, claiming the handset maker is blocking RIM from hiring former employees according to a complaint filed yesterday in Circuit Court of Cook County, Illinois.
The suit, obtained by InternetNews.com, comes in response to a Sept. 4 court filing by Motorola that sought to restrain RIM from hiring former and current employees on the basis of a February agreement between the two handset makers.
RIM, maker of the popular BlackBerry series of mobile devices, now seeks a court order invalidating that agreement, which stipulated that neither would solicit each other's employees.
RIM (NASDAQ: RIMM) maintains that the February agreement, which includes a non-solicitation clause, expired this past August. Yet it contends Motorola is still blocking RIM's hiring efforts of former Motorola staff, according to the latest filings.
But Motorola claims that the provision is still in effect. In its court filings in September, it sought to stop RIM hiring former Motorola employees, claiming that trade secrets would be disclosed.
Motorola (NYSE: MOT) spokesperson Jennifer Erickson-Weyrauch said Motorola had not yet received the legal complaint and could not comment until it had been reviewed. RIM's public relations team did not respond to media inquiries by press time.
The news comes as Motorola continues tostruggle amid against a tough economic climate that prompted several layoffs and business reorganizations at the handset maker this year.
Just last week, the Schaumburg, Illinois electronics giant cut executive pay with a 25 percent salary cut for its two co-CEOs, and also canceled employee bonuses and slashed benefits programs for 2009.
Meanwhile, RIM is experiencing its best holiday sales season yet, according to co-CEO Jim Balsillie. BlackBerry sales and revenue are spiking and a recent research report claimed that 2009 will pit RIM's Storm device against Apple's iPhone 3G in a battle for smartphone market dominance.
Sparring over hires
In its 37-page court filing, RIM claimed that Motorola wants to "improperly" expand the February non-disclosure agreement to prevent RIM from hiring its employees.
"This action takes place at a time when RIM continues to grow and hire new employees ... against a backdrop of recent public announcements by Motorola that it has and will continue to make massive layoffs of thousands of its employees in an effort to cut costs within its faltering wireless communications devices business," RIM said in the document.
The February nondisclosure agreement came about to allow the two companies to exchange information about a confidential matter, according to the legal filing. It did not disclose further details of the circumstances surrounding the agreement.
Updated with comments and clarifications from RIM's court filings.