IBM was dealt a legal setback on Friday in its effort to prevent an ex-exec from taking a position at rival Dell.
David Johnson, the former senior executive in charge of IBM's merger, acquisition, and divestiture strategy, was offered a similar job at Dell back in May, but Big Blue sued to stop Johnson from taking the job.
And now the federal judge hearing the case has turned down IBM's request to bar Johnson from working at Dell. IBM's argument was that allowing Johnson to take the job would violate the non-compete agreement that IBM thought was in effect.
IBM's lawyer, long-time Big Blue hired gun Evan Chelser, the managing partner at Cravath, Swaine & Moore's, had argued in the complaint, filed on May 21 after Johnson took a job as senior vice president of strategy at Dell, was that Johnson knew what acquisitions and divestitures IBM thought about doing, which ones it chased and didn't, and what it expected returns to be for past, current, and future acquisitions.
And IBM also said that Johnson had signed a non-compete agreement that barred him from taking the job.
According to a report in Reuters, Judge Stephen Robinson, who is hearing the case in IBM's home court (literally and figuratively) of the Southern District of New York, ruled on Friday that Big Blue had failed to show in its complaint what trade secrets that Johnson was privy to and which might be of strategic value to Dell.
(Maybe Johnson could explain that whole IBM-Sun Microsystems dance to us if he has a moment? Or how many times IBM has thought about buying SAP or Red Hat or Novell?)
Johnson explained in his filings that when he was disgruntled with Big Blue about the non-compete agreement he was being forced to sign, he signed the form in the wrong place and reasonably believed (and still believes) that it has not been in effect all these years.
Back in 2001, when this occurred, Johnson had apparently just been passed over for a senior position, and was instead given a plum position working with IBM's chief financial officer on the company's acquisition strategy. Judge Robinson basically agreed with this interpretation of events, and now it's up to IBM to prove otherwise.
Until IBM can do so, Johnson can keep his job at Dell, which has agreed not to put him on M&A deals until the case is resolved.
But this is not over. The plot thickened a little more on Thursday before this ruling was handed down, according to a story in Reuters that said IBM has filed an amended complaint alleging that Johnson used IBM resources (including facilities and personnel) to help set up a venture capital firm called JSJ Capital Management.
It's probably too late to return that stapler. ®