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I'm not saying it is necessarily ethical, but I don't think "legal" should be coming into the picture.
I know they can charge income tax for it. I don't think that is right, but that is between me and the sixteenth amendment. I would assume he was trying to get the payments under the table, hand to hand transactions in the East. Since that kind of stuff happens there every day, I'm sure they know their ways around it. I would think this is the area "legal" would come into the picture. Evading income taxes. Since these taxes are supposed to be used for things like defense at the national level and services at the state level, if he is living in Singapore and not the USA, I fail to see why he should be paying for services he is essentially not receiving. The government has no problem stealing from people, but like I said, that is another issue entirely.
On to the Apple versus employee issue. In all my classes on ethics, this is by far the lowest level I've ever seen fiduciary duty extended to. I've rarely seen anyone apply it below C level management (outside of certain financial industry positions). Not to say that it can't be... just that the further you go with it the more people will reject the idea of it.
It sounded like he was giving information to suppliers, not vendors or competitors. Apple is well known for exploiting the supply market. For example, they would buy lots of flash memory and force their suppliers to open more fabrication facilities to meet demand. When they were planning a new iPod, they would suddenly stop buying memory so that the prices would plummet due to excess supply. Once the price got low enough, they would buy a ton of it again in order to reduce their costs and boost their profit margins. If this employee was blowing in Apple to prevent Apple from using that tactic, ethically I have no problem with his actions.
Either way, Apple found out, they fired him. His name is in the press now and it should essentially make him unable to get hired by anyone. That's where, in my opinion, this should end. Business is business, the market will sort it out by keeping him unemployed. He sold his job and reputation for $1M. So what now, Apple is going to sue him for all the money and he'll end up being supported by the American taxpayer for the rest of his life? How is that a more ethical or better situation?
Then again, we know nothing of his contract. There is probably some section that covers this. If he agreed to a contract then it becomes his fault for being immensely stupid. But still, we'll all end up supporting him when he goes broke and is unemployed... all so Stevey J has more cash to roll around in.