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RIM Sues Motorola Over Hires

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LR Mobile News Analysis
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12/30/2008

Motorola Inc. (NYSE: MOT)'s handset division continues to suffer, and the company has announced more than 3,000 job cuts. But those employees may have a tough time getting a new job with competitors due to nondisclosure agreements.

Because of this, BlackBerry filed a lawsuit last week claiming Motorola improperly blocked the BlackBerry maker from hiring employees Motorola has already fired or plans to terminate. The suit stems from an agreement the companies signed in February, where the mobile phone manufacturers agreed to not solicit each other's employees.

But RIM said the agreement expired in August, and it's asking the court to invalidate the pact. The company is also seeking unspecified damages from Motorola for what it said are improper and unfair competitive practices.

"RIM entities continue to grow and hire new employees within the United States and globally against a backdrop of recent public announcements by Motorola that it has and will continue to make massive layoffs," RIM said in the lawsuit.

The lawsuit comes as Motorola is restructuring to rein in costs, as the handset division has lost nearly $2.8 billion since the start of 2007. The company recently said it would be slashing executive pay and trimming employee benefits to control costs.

"The sustained downturn in the global economy requires that we take these difficult but necessary steps," said co-CEO Sanjay Jha in a statement. "While serving our customers remains a top priority, we are equally focused on our cost structure, and we will continue to implement appropriate measures to conserve cash and reduce expenses."

RIM appears to be going in the opposite direction, though, as the success of high-profile releases like the BlackBerry Bold and the touch-screen Storm have lead to more BlackBerry subscribers, and increased revenue during the last quarter.

— Marin Perez, InformationWeek

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