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Judge OKs Former IBM Exec's Dell Move

David Johnson can begin work in Round Rock while breach of contract case is heard.

Paul McDougall

June 29, 2009

1 Min Read

A judge has rejected IBM's effort to block its former head of mergers and acquisitions from commencing duties in a senior strategy role at computer market Dell—for now, at least.

In denying IBM's request for an injunction that would have David Johnson on the sidelines until a final ruling is delivered on Big Blue's breach of contract case against the executive, Judge Stephen Robinson, of U.S. District Court in Manhattan, said Friday that IBM "overstated" its case.

Robinson ruled that Johnson, who accepted an offer to become Dell's senior VP for strategy, is not in possession of IBM trade secrets or detailed technical knowledge that could, if disclosed to a competitor, compromise IBM.

"Mr. Johnson does not have the sort of information that is considered quintessential trade secret information," Robinson wrote in his ruling. He also ruled that an injunction would create significant economic hardship for Johnson.

IBM sued Johnson in May, claiming he violated a non-compete clause and that his departure to a competitor would be injurious because Johnson is aware of Big Blue's innermost secrets. For his part, Johnson maintains the agreement carries no legal weight because it was never properly signed.

Dell has been relatively timid on the acquisition front despite its status as one of the world's largest tech vendors. The company has completed just ten deals since 1999—the largest a $1.4 billion buyout of storage technology specialist EqualLogic.

By contrast, IBM announced or sealed 14 acquisitions in 2008 alone, including the $5 billion takeover of Canadian business software developer Cognos.

Johnson has overseen IBM's frenetic merger activity for the past nine years and is a twenty-seven year veteran of the company.

The case remains ongoing.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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