CALIFORNIA JUDGE RULES AGAINST LEXMARK

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CALIFORNIA JUDGE RULES AGAINST LEXMARK

 user 2006-07-17 at 11:13:00 am Views: 58
  • #16280

    California judge rules against Lexmark
    Hewlett-Packard
    Co. has achieved a victory in a two-state battle over a former Lexmark
    International executive that the printer industry leader lured from
    Lexington earlier this year.A California judge ruled late last week
    that parts of Lexmark’s employment agreement with former manager Bruce
    Dahlgren are void in California.Both companies declined to comment on
    the ruling.The voided items include a non-compete clause that bars
    employees from joining a competitor for at least a year, as well as a
    section that forbade Dahlgren from luring certain Lexmark employees or
    customers for at least three years.In the ruling on certain aspects of
    the case, Superior Court Judge Kevin McKenney said California law
    should apply in the case, even though the employment agreement dictates
    that the laws of Delaware, where Lexmark is incorporated,
    applied.McKenney also voided a section of the contract that could have
    required Dahlgren to pay back gains from stock incentives he received
    while working at Lexmark.Earlier this year, McKenney issued a temporary
    restraining order barring Lexmark from enforcing a Lexington judge’s
    ruling that would have enforced the agreement.Dahlgren was considered
    to be among Lexmark’s top 20 executives, according to his supervisor’s
    court testimony.Dahlgren’s perceived importance to HP is his experience
    in selling printing solutions, which involves helping companies improve
    workflow and printing needs.In a research report earlier this year,
    Moors and Cabot analyst Cindy Shaw said it appears HP is “beginning to
    step up its efforts in what we think is Lexmark’s most profitable
    division.”The cases are continuing to go forward in both states.
    Attorneys representing both companies in the California case did not
    return calls inquiring about the future of the case after McKenney’s
    judgment. A conference is scheduled in the California court later this
    month, according to the court’s online records.i the Kentucky case,
    Fayette Circuit Judge Thomas Clark asked lawyers for both companies to
    submit briefs about a motion by Lexmark’s attorneys to compel Dahlgren
    to answer certain questions posed during a recent deposition.Also at
    issue is a motion to find Dahlgren and HP in contempt of Clark’s
    previous order. In general documents submitted to Fayette Circuit
    Court, Lexmark’s attorneys wrote that Dahlgren and HP “have engaged in
    activity which competes with the business of Lexmark in North America.”
    The bulk of the documents expanding on the motions have been filed
    under seal because they are considered confidential.