Court bars EMC top exec from working for HP

Computerworld - A state court in Massachusetts yesterday cited a noncompete agreement as it issued a temporary order barring a former high-ranking EMC Corp. storage executive from taking a job at Hewlett-Packard Co. as executive vice president for enterprise servers, storage and networking.

The court said David Donatelli cannot start his new job until EMC and HP resolve a legal dispute over the terms of a noncompete clause Donatelli signed with EMC.

EMC wouldn't comment on the case other than to say it is aware of the court's decision.

In response to the ruling, an HP spokesperson said, "we are disappointed that the Massachusetts court saw fit to delay Mr. Donatelli's employment with HP. However, the court's order is preliminary, and we are confident that Mr. Donatelli will be permitted to join HP in a leadership role once a full hearing of the issues is held. We are similarly disappointed by the lengths to which EMC has gone to impede Mr. Donatelli's efforts to seek other employment."

Donatelli preempted EMC's suit by filing one of his own on April 27 in a Superior Court in California, asking that the court negate his employee agreement, which states that he cannot work for a competitor for 12 months after leaving EMC. Unlike Massachusetts, California generally doesn't recognize noncompete clauses.

Hopkinton, Mass.-based EMC filed its lawsuit the next day in Superior Court in Massachusetts, seeking a preliminary injunction to keep Donatelli from working for Palo Alto, Calif.-based HP, which it considers to be a direct competitor. The California court is expected to hold its hearing on the case May 15.

In court documents, Donatelli contends that "only 20% of his job overlaps with his previous EMC job duties," while the majority of his work will center on servers and networking equipment.

At the heart of the two civil cases is a legal concept known as the "inevitable disclosure doctrine."

The doctrine raises the question of whether it is possible for someone in Donatelli's position, a high-level executive with access to his company's trade secrets, to work in a similar position at a competitor and not give away those trade secrets, said Randy Kahnke, a specialist in intellectual property law in the IT industry with the law firm of Faegre & Benson LLP in Minneapolis.

An appeals court in California rejected the inevitable disclosure doctrine, stating that to prevent a former employee from going to work for a competitor amounts to an "after-the-fact covenant not to compete" that restricts "employee mobility."

Donatelli's attorney argued at a court hearing in Massachusetts that Donatelli should be allowed to move to California and thereby escape the obligations of the covenant, the court ruling stated.