HP STILL LURING LEXMARK EXECUTIVES

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Former executive lured others over to HP, Lexmark alleges
In the ongoing legal battle over a top Lexmark International executive who defected to industry leader Hewlett-Packard, the Lexington-based printer maker now alleges the executive may have helped HP lure away eight salespeople.
Nine more have been contacted by HP but have not left Lexmark, Lexmark’s attorney told Fayette Circuit Judge Thomas Clark earlier this month.The allegations are the continued fallout from a legal case that began earlier this year after HP hired away Bruce Dahlgren, one of Lexmark’s top 20 executives, a Lexmark official testified.The companies will be back in court today to discuss a proposed second deposition of Dahlgren.Earlier this month, Lexmark attorney Larry Sykes asked Clark to approve his request seeking more information from HP about an apparent “concerted effort by Hewlett-Packard to hire Lexmark sales people — sales people who were in fact in Mr. Dahlgren’s organization when he was at Lexmark.”Earlier this year, Clark issued a temporary restraining order, ruling that Dahlgren must abide by an employee agreement, which prohibits him from working on North American sales strategy and other issues — his job at Lexmark — for one year and from luring away Lexmark’s employees or certain customers for three years.A judge in California, where non-compete clauses are generally prohibited, said earlier this year that Lexmark could not enforce that ruling. The California judge later ruled the non-compete and recruiting clauses in the employment agreement were void in California. The California case is ongoing.Representatives from each company declined to comment for this story. The companies’ lawyers did not return calls, nor did Dahlgren.Sykes, Lexmark’s attorney, said in Fayette Circuit Court earlier this month that eight former Lexmark sales employees have joined HP recently. He asked Clark for expedited discovery times and for additional information from HP about the contact the industry leader, and Dahlgren, had with those former Lexmark employees.”One reason we want to expedite it is to stop the drain of salespeople…,” Sykes told the court. “We have more than just a suspicion that perhaps Mr. Dahlgren might be involved.”Sykes went on to note an e-mail exchange between Dahlgren and HP human resources executive Rand Dunn over a Lexmark sales worker who had expressed interest in working for HP.Sykes read an e-mail Dunn sent to Dahlgren regarding Lexmark employee Ariel Manalo:”Hi, Bruce. It’s already working. How aggressive do you propose I respond? Is he an A-plus player?”Sykes said Dahlgren replied, “Ariel is a strong player in Northern California. My recommendation is to ask him to forward a resume of some form to you. I think we’ll want to come across as open and receptive. Word will travel quickly. My guess is that we will only get a few before Lexmark pushes back hard, and we should be selective in those first few.”The e-mail creates “a very reasonable suspicion,” Sykes told the judge, that Dahlgren was playing a role in recruiting or hiring people. Doing so would violate the terms of his Lexmark employee agreement because his opinion of former Lexmark employees would be based on confidential information he obtained during his time at Lexmark.Manalo said Friday his decision to join HP “had nothing to do with Bruce.””I lived 10 miles from Hewlett-Packard headquarters, and it was me that pursued that opportunity,” he said, adding he had no contact with Dahlgren in the hiring process.Two more of the eight former Lexmark employees contacted by the Herald-Leader said their leaving had nothing to do with Dahlgren.”I haven’t been in touch with Bruce since over a year and a half ago or so,” said Larry Goldstein, who worked for Lexmark in California and is now relocating from California to Arizona for HP.Stanley Kazee also said his decision was “completely independent.”The other five HP employees either declined to comment or did not return calls.All nine of the current Lexmark employees whom Sykes said HP had recruited declined to comment or did not return calls.Thomas Metzger, who represents HP and Dahlgren, countered in court that Dahlgren has not been “out there soliciting” and Lexmark executives, in depositions taken for the case, “have no facts — zero facts — to suggest that Mr. Dahlgren has been involved in soliciting employees or encouraging employees to leave.”Sykes later told the judge that the e-mail exchange between Dunn and Dahlgren had been designated as viewable to only the attorneys in the case, though, so the executives at Lexmark would not have had knowledge of it.Metzger also called Sykes’ requests for more information, specifically all communications between HP and Lexmark employees, a “massive fishing expedition.”Clark ruled that the eight Lexmark employees hired by HP could be deposed in the case if Lexmark wished.The companies are expected to be in court again today on a motion by Lexmark’s attorneys to compel a second deposition of Dahlgren.In filings last week, the Lexmark attorneys wrote that their deposition of HP executive Vyomesh Joshi — Dahlgren’s supervisor — showed that Dahlgren’s development of a worldwide market strategy would compete against Lexmark in North America and violate Clark’s temporary restraining order.Joshi later said in the deposition that there is “‘a ‘firewall’ in terms of what they are doing with respect to North America,” the attorneys wrote, but added the testimony entitles Lexmark to question Dahlgren again.Dahlgren’s perceived importance to HP is his experience in selling printing solutions, which involves helping companies improve workflow and printing needs.He left Lexmark on Jan. 9 after nearly six years as a vice president and general manager, overseeing North American sales and marketing for Lexmark’s Printing Solutions and Services Division, where he earned up to $750,000 annually, according to court testimony.

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December 5, 2006 at 12:47 PM