Western Digital announced today in a press release that the arbitrator for a Seagate vs. Western Digital complaint sided with Seagate and ordered an award of $525 million paid to Seagate. The arbitration was initiated when Seagate alleged misappropriation of confidential information and trade secrets by Western Digital once a Seagate employee defected to Western Digital.

CEO John Coyne intends on challenging this award, stating that WD believes “the company acted properly at all times” and adding that the ruling “does not affect our ability to conduct our operations, to complete the recovery and recommencement of our Thailand operations”.

Along with most other hard drive manufacturers such as Toshiba, Hitachi, and of course Seagate, Western Digital is suffering losses after major flooding recently struck Thailand operations. DigiTimes reported that Seagate anticipates a 10-18% reduction in hard drive output as a result of the flooding, with other manufacturers surely similarly affected, resulting in a hard drive shortage for the coming months.

Source: Press Release

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  • johan851 - Monday, November 21, 2011 - link

    So did the employee actually 'defect' like the captain of a Soviet nuclear submarine? Or did he simply quit his job at Seagate to go work for Western Digital?
  • name99 - Monday, November 21, 2011 - link

    If he left Seagate carrying a briefcase full of notes and a laptop full of specs (which I'm guessing was the case) then this was rather more than "simply quit his job at Seagate to go work for Western Digital".

    If we add in (and again this is probably the case) negotiations before he quit his job along the lines of "suppose I left Seagate and brought the following info with me --- how good a salary do you think that would get me" now it's even less about "quit his job" and rather more about "actively spied for WD".

    Given how much money is being handed over, I suspect that indeed the worst case is exactly what happened, and why WD are being punished.
  • george1976 - Saturday, November 26, 2011 - link

    Damn you know too much. Are you sure you dont work for Seagate?:)
  • sleepeeg3 - Monday, November 21, 2011 - link

    Even at the lowest echelons of a corporation, many companies prevent their employees from working at a similar corporation for at least 6 months. Most companies have strict policies against hiring you as well, for this very reason.
  • mino - Wednesday, November 23, 2011 - link

    Stop the bull****.

    These policies have a single main cause - to prevent competition between companies on the Labor market thus making workforce cheaper on average.

    IF you really want confidentiality preserved, NO CONTRACT CLAUSE CAN GUARANTEE THAT FOR YOU.
    Certainly the ones of the type you-are-ours-for-the-next-year-even-if-we-wont-pay-you.

    Pissed people reveal secrets. Paid moles do NOT leave home company, would be stupid to do so ...
  • Beenthere - Monday, November 21, 2011 - link

    Even if the employee left without anything but notes in his head, if he signed a non-disclosure agreement, which is standard fare these days, he can't tell his new employer what he knows.
  • bigboxes - Monday, November 21, 2011 - link

    This won't effect the hard drive makers in the least. People got to have room for their file sharing habit!
  • ATC9001 - Monday, November 21, 2011 - link

    Exactly, trade secrets are trade secrets regardless of written or memorized.

    And like the comment below, production is down 20-25% but vendors are making windfall gains. (prices are almost 300% higher...so margins are probably 1000% higher per HDD)
  • ATC9001 - Monday, November 21, 2011 - link

    Question....Have the HDD manufactures raised their prices significantly or is this the middleman raising the prices? (probably both, but how much from each source?)
  • anactoraaron - Monday, November 21, 2011 - link

    HDD production is only down 20-25% and people purchasing HDD's are still being gouged. Got a 3TB WD external for 139 at bestbuy last week- promptly pulled the drive out of the case and put it in my server. Would have spent $250 on newegg for just the drive and tiger has the exact same external for $250. Somewhere out there I would bet an investigation is starting... consumers are being ripped off!!

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