Last November, Apple happily announced that it had hired Mark Papermaster, a 26-year IBM veteran, to head up its iPod and iPhone hardware engineering teams. IBM immediately sued Papermaster, claiming that his employment contract with Big Blue included a noncompete agreement prohibiting just such a move. A U.S. federal district court quickly ordered Papermaster out of Apple until further notice. The two companies agreed to a settlement in late January; Papermaster will finally sit down at an Apple desk later this month.

Noncompete clauses are essential to protect a company’s intellectual property, especially its trade secrets—after all, they’re not good secrets if employees can leave and tell them to the company’s competitors. But courts are wary of these clauses and balance the protection of trade secrets against an employee’s basic rights.

In its complaint, IBM asserted that Papermaster was ”in possession of significant and highly confidential IBM trade secrets and know-how, as well as highly sensitive information regarding business strategy and long-term opportunities.” Papermaster had been IBM’s top blade-server guru, and the company offered him a substantial raise as an enticement to stay—it even went so far as to promise a year’s salary in exchange for not joining a competitor. In his counterclaim, Papermaster said his work for Apple would not impinge upon the agreement because he wouldn’t be working on blade servers there and because Apple’s focus is on consumer electronics, not large-enterprise applications.

Predicting how a trial court will rule in a dispute over the validity of a noncompete agreement is a tricky business, says Ross Dannenberg, a partner in the Washington, D.C., law offices of Banner & Witcoff. ”There are three types of limitations found in a noncompete agreement—geographical, temporal, or line of business,” he says. ”Courts base their rulings on whether any of them creates an unreasonable restriction on a worker’s ability to earn a living.” Thus, a court may void the contract clause if it finds that forcing you to remain unemployed for more than, say, a year does your career irreparable harm by rendering you a high-tech dinosaur.