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IBM obtains court order that limits Dell executive's work
- — 30 June, 2009 07:14
IBM was granted a motion late on Friday that limits the duties of its former merger-and-acquisition chief at rival company Dell over concerns of misappropriating trade secrets.
An appeals court granted IBM temporary relief that could restrict former IBM executive David Johnson from performing full duties at Dell. The relief reinstates a June 4 ruling that allowed Johnson to begin work with Dell, but "restricted him from advising Dell on any matter concerning the business strategy of Dell or IBM," and prohibited from disclosing any confidential IBM information in his possession, according to court documents.
The June 4 ruling asked Johnson to supply his counsel with a daily log of activities at Dell with "reasonable specificity," the amount of time involved in the activities and the persons involved. The log was to be made available to IBM's counsel on request, if ordered by the court.
IBM earlier accused Johnson of violating a noncompetition agreement when he went to work for Dell. The emergency relief, granted to IBM by the Second Circuit Court of Appeals on a temporary basis, will hold until a panel of judges can review the motion.
The relief reverses a district court ruling earlier on Friday in which a judge cleared Johnson to perform full duties as Dell's senior vice president of strategy. In the ruling, Judge Stephen Robinson said that IBM's case wasn't strong enough and that IBM's actions raised significant doubts as to whether Johnson had entered into the noncompetition agreement.
Robinson also wrote that Johnson did not have the information "considered quintessential trade secret information - detailed technical know-how, formulae, designs, or procedures." In addition, Johnson could suffer great hardship if the court enforced the agreement, Robinson wrote.
IBM then appealed Robinson's ruling with the U.S. Court of Appeals for the Second Circuit.
Johnson was previously IBM's vice president of corporate development and was hired by rival Dell last month. He worked at IBM for 27 years, during which he directed the company's mergers and acquisitions strategy. In earlier court filings, IBM has argued that Johnson could hurt the company because he has knowledge of the "most sensitive confidential strategic information."
In 2005, IBM required executives to sign noncompetition agreements to continue receiving benefits. Disagreeing with certain conditions in the noncompetition agreement, Johnson signed the document on the wrong line. Johnson said that IBM discovered that the signature wasn't properly executed and sent him a new noncompetition agreement, which he never signed. IBM, however, alleged that Johnson had indeed signed a noncompetition agreement.
Dell and IBM declined comment on the matter.