Lawsuit against former federal services VP Thomas Romeo is fifth time Big Blue has hauled a former exec into court in recent years for alleged breach of contract.

Paul McDougall, Editor At Large, InformationWeek

March 20, 2012

3 Min Read

100 Years Of IBM: 25 Historic Milestones

100 Years Of IBM: 25 Historic Milestones

Slideshow: 100 Years Of IBM: 25 Historic Milestones (click image for larger view and for slideshow)

IBM has filed a breach of contract lawsuit against a former executive that jumped shipped to a rival tech services company, InformationWeek has learned. The move is at least the fifth such court action that Big Blue has launched against a former, high-level employee in recent years.

In court papers filed Friday, IBM accused Thomas Romeo, its former VP for the federal healthcare market, of refusing to pay back retention bonuses after he jumped ship to Accenture. "Romeo voluntarily resigned as an employee of IBM" in November, 2009, IBM notes in its complaint.

IBM claims that, under the terms of its incentive plans, Romeo must pay back almost $165,000 in stock awards as a result of his leaving for a competitor.

"To date, Romeo has failed and refused to make the requested payment to IBM, though duly demanded by IBM," the company states, in papers filed in U.S. District Court for Southern New York. Romeo has since left Accenture, and in November was named president of Federal Services at government contractor Maximus, which also competes with IBM.

[ Too bad IBM couldn't use software to predict these personnel problems. Read IBM 'Smart Solutions' Predict Fraud, Risk, Customer Behavior. ]

Maximus officials did not return a call seeking comment, and Romeo has yet to file a formal response to IBM's claims. IBM appears to be more than willing to use the courts to hold former executives to what it claims is their contract terms.

In 2009, IBM filed suit against David Johnson, whom it accused of breach of contract after Johnson left to head up Dell's mergers and acquisitions unit. Johnson's departure for Dell, first reported by InformationWeek, signaled the computer maker's plans to become more active in the M&A market. The judge overseeing the case ultimately ruled that Johnson's contract with IBM did not preclude him from working at Dell.

In another high-profile case, IBM sued former employee Mark Papermaster, an electronics expert who left to head up iPhone engineering at Apple. IBM and Papermaster entered into a settlement in 2009 under which Papermaster agreed not to divulge IBM trade secrets during his work at Cupertino.

Papermaster's career at Apple was shortlived--he left the company following the so-called Antennagate incident, in which the iPhone 4 was criticized for wireless reception problems. Papermaster was since named chief technology officer at Advanced Micro Devices.

In yet another case, IBM sued former head of Business Continuity Joanne Olsen in June, 2010. Olsen left to lead the cloud software unit at Oracle. IBM also sued Sam Khanna, a former sales exec at Armonk, for more than $500,000 in bonus clawbacks after Khanna bolted for Unisys. Both Olsen and Khanna reached settlements with IBM.

"It may be that there needs to be a better process inside IBM to inform these executives that if they leave, and they break their contracts, they're going to get sued," said Rob Enderle, principal consultant at Enderle Group and a former IBM employee.

IBM officials did not immediately return a call seeking comment.

See the future of business technology at Interop Las Vegas, May 6-10. It's the best place to learn how cloud computing, mobile, video, virtualization, and other key technologies work together to drive business. Register today with priority code CPQCNL07 to get a free Expo Pass or to save 25% on Flex and Conference passes..

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights