IBM on Friday was denied an injunction that would have kept its former acquisitions chief from taking a job at Dell, according to a report in The Wall Street Journal.
IBM sued David Johnson out of concern that working at Dell would cause him to divulge IBM trade secrets. Johnson worked for 27 years at IBM, most recently as vice president of corporate development, responsible for overseeing mergers and acquisitions.
IBM plans to appeal U.S. District Court Judge Stephen Robinson's ruling, according to the story. In his ruling, Robinson said while "IBM will undoubtedly suffer harm absent an injunctive order" because of Johnson's inside knowledge of IBM's business, the harm wasn't "decidedly greater" than the harm to Johnson if he couldn't pursue work because of a non-compete agreement.
Johnson maintains that he didn't properly sign the most recent agreement. Though he has begun work at Dell, he's not working on mergers and acquisitions. According to a court filing, Johnson signed a statement saying he would "limit work at Dell Inc. to learning about its businesses, including its strategies, products, operations and personnel."
IBM says that if its former head of mergers and acquisitions, David Johnson, were to depart for Dell it would be a violation of his contract, and last week sued Johnson in federal court.
IBM says it is concerned that Johnson working at Dell would cause him to divulge IBM trade secrets to Dell. Johnson worked for 27 years at IBM, most recently as vice president of corporate development, responsible for overseeing mergers and acquisitions. The papers filed in the U.S. District Court for the Southern District of New York on May 21 show IBM is specifically concerned because Dell competes with IBM in the enterprise server market.
"Mr. Johnson has possession of valuable confidential information and cannot undertake a senior strategy position at Dell without violating his obligations to IBM," an IBM spokesperson told Bloomberg News Wednesday. Johnson received "significant compensation" by agreeing not to work for competitors, IBM said.
In court papers, IBM says Johnson knows exactly what companies and technologies IBM plans to invest in and when, as well as what businesses or technologies it plans to divest itself of. IBM believes Johnson has accepted the position of senior vice president of strategy at Dell.
When reached for comment on the suit, Dell spokesman David Frink would only confirm that the Texas-based PC maker has offered Johnson a position in the company. He refused to say what that role is and called descriptions of what that position may be "speculative." He added, "Without exception, Dell respects the trade secrets and intellectual property of others."
This is the second time in less than a year that IBM has proved territorial about departing executives. Last year, the company sued Mark Papermaster to keep him from joining Apple. The lawsuit claims were nearly identical, with IBM charging that Papermaster's joining Apple would cause him to divulge trade secrets and was a violation of the non-compete clause to which he agreed. IBM and Papermaster settled after three months, and Papermaster finally started working at Apple three months after that.
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