It really should come as no surprise that Fortinet would sue rival Sophos over competitive hiring practices.
After all, the two security vendors are on a collision course as Sophos expands its appliance and cloud practices, and Fortinet looks to maintain its market leadership in the unified threat management (UTM) hardware market.
At issue between the two companies is whether Mike Valentine, hired by Sophos to run worldwide sales, violated his noncompete agreement with Fortinet to not hire former colleagues for 12 months - a period that will end in February 2014. Fortinet alleges Valentine breached his contract and hired several Fortinet employees, including former channel chief Kendra Krause.
Sophos dismisses the lawsuit as frivolous and "a nasty scare tactic", saying people should be free to choose their place of employment.
While Fortinet has a contract on its side, Sophos does have common law on its. More times than not, courts are on the side of employees, often giving latitude under the concept that people have the right to work.
Courts erring on the side of employees doesn't necessarily mean dismissals of noncompete violation lawsuits. Many judgements result in the employee keeping their new job, but under restrictions to protect intellectual property.
The IT industry and channel are replete with such lawsuits. The looming Fortinet-Sophos one is a bit different because of undertones that the staff-poaching is systematic.
But this case shares many of the common elements of similar lawsuits over the years.
If there's a king of noncompete lawsuits, it's HP. Over the years, HP has levelled numerous lawsuits against rivals over the hiring of former employees and key executives.
Topping the list of HP hiring lawsuits is none other than the appointment of its former CEO Mark Hurd to the co-presidency of Oracle.
In 2010, Hurd unceremoniously resigned from HP amid an accounting scandal and allegations of an inappropriate relationship with a consultant. He surfaced a month later at Oracle.
HP promptly sued to block the appointment. The case was dropped after Hurd and Oracle agreed to restrict certain activities to protect HP intellectual property. Hurd also surrendered nearly $40m in HP stock options he was given as part of his severance deal.
Oracle was sued again when it hired former HP Americas channel chief Adrian Jones in 2011. HP accused Jones of stealing trade secrets and sharing them with Oracle. An investigation revealed that the copying of documents happened after Jones had left the company.
The suit was quietly dropped some time in 2012. Jones is now running Oracle's Asia operations.
HP's pattern for employment litigation became so pervasive and odious that in 2011 Cisco Systems's general counsel Mark Chandler publicly challenged the practice.
After several new Cisco new hires were sued by HP for violating noncompete agreements, Chandler penned an open letter to HP and the market decrying the practice and challenging support for employee choice.
"It's a sad day when great companies think they need to sue their own employees over and over again to stop them from bettering themselves in their chosen profession," Chandler wrote.
HP has used noncompete lawsuits to its advantage, too. In 2007, filed a pre-emptive lawsuit against Lexmark to invalidate the noncompete agreement binding Bruce Dahlgren, who was hired to run sales for its printer division.
Dahlgren had served as head of sales for Lexmark, a Kentucky-based company, and had a strong non-compete agreement in place. The laws in California are far more employee-friendly, which is why HP filed the pre-emptive suit. Eventually, the case was settled, with HP paying Lexmark $525,000 and restricting Dahlgren's activities for a year.
Big vendors aren't the only tech companies that engage in litigation to stop former employees from going to work for rivals.
In 2008, US-based Softchoice sued En Pointe Technologies over its hiring practices, alleging that it was systematically recruiting its employees and encouraging them copy trade secrets. The case gave providers cause to consider the resource and cost ramifications of hiring people who have active noncompete agreements.
While such lawsuits are often unsuccessful, most tech providers don't have the legal or financial resources to wait out litigation.
Tech companies have tried to exercise forms of détente in their hiring practices, agreeing not to hire out of each other's staffing pools. In 2011, this got six major tech companies - Apple, Google, Adobe, Intuit, LucasFilms and Pixar - in hot water with the US government.
After employees complained that their ability to switch employers was hampered by the practice, the government stepped in with an antitrust investigation. Eventually, the six vendors settled and ended the practice.
Just how the Fortinet-Sophos lawsuit will end is a matter for the courts. Fortinet wants a jury trial. While Fortinet isn't commenting on its allegations, the demand to have its case heard by a jury could indicate that it wants to air dirty laundry against Sophos and its former employees now working there.
Larry Walsh is chief executive officer and president of Channelnomics
As part of our special editorial relationship, CRN is republishing this article from Channelnomics
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