Sophos brushes off Fortinet staff-poaching spat

In an exclusive interview with CRN's media partner Channelnomics in the US, Sophos' chief opens up about ongoing lawsuit

Sophos chief executive Kris Hagerman has called an employee poaching lawsuit lodged by security rival Fortinet “a nasty scare tactic” that’s without merit.

Earlier this week, unified threat management (UTM) specialist Fortinet filed a lawsuit in federal court in Santa Clara, Calif., alleging breach of contract and patent infringement related to the recruitment of its executives and staff following Sophos’s hiring of former Fortinet executive Mike Valentine to run worldwide sales. Among the executive hires in question is that of Kendra Krause, who left Fortinet in April to lead Sophos’s North America channel.

In an exclusive interview with CRN's US media partner Channelnomics, Hagerman said said: “It’s a nasty scare tactic. It’s not only without merit, it’s creating a smokescreen for what’s really happening, and that is that great people are joining Sophos and people are free to do that in a free market.”

At issue is a noncompete agreement between Fortinet and Valentine, who had served as the company’s vice president of Americas sales and support until February and had previously been Fortinet’s channel chief. According to the lawsuit, Valentine agreed upon his resignation not to hire Fortinet employees for 12 months following his departure.

In April, Sophos hired Krause, who had run the Americas channels organisation for four years. Several other employees have left, including senior executives, due to recruitment by Valentine and inducements made by Sophos, the lawsuit alleges.

Neither Sophos nor Fortinet would comment on the number of employees at issue, or their previous or current roles.

A Fortinet representative told Channelnomics it does not comment on pending litigation. The complaint, which names Sophos and Valentine as defendants, indicates Fortinet wants a jury trial and will seek damages.

Sources told Channelnomics that Fortinet was going to ignore the breach of contract with Valentine, accepting that executives will often bring trusted colleagues and associates with them to new jobs. However, sources say the lawsuit was initiated because Valentine was getting particularly aggressive in recruiting.

Additionally, Fortinet is claiming Sophos infringed upon three of its patents – one for what appears to be a sandboxing technique for isolating malware; the other two for whitelisting techniques in cloud environments. It’s unclear whether the patent infringement allegations are related to the staff hired by Sophos.

The lawsuit comes as Sophos is expanding its presence in Silicon Valley through the opening of a new office, which includes executive staff, sales teams and a briefing center. Hagerman, Valentine, chief marketing officer Matt Fairbanks and senior vice president of global technical support Mary Winfield work out of the new Santa Clara facility.

Valentine, who has worked and lived in the San Francisco Bay area for much of his career, was supposed to move to the Boston area and work out of Sophos’s North America headquarters in Burlington, Mass. Instead, he stayed put in California as Sophos opened the new office.

Hagerman said Sophos had a number of employees working from home in the Bay Area and Silicon Valley, and it just made sense to open an office and establish a West Coast presence. In addition to the existing remote staff now working out of the Santa Clara facility are former employees who have joined Sophos from Dell SonicWall and McAfee, among others, he added.

“We think Fortinet is lashing out and being very unhappy with people exercising their own freewill,” Hagerman said.

Unhappiness with employees’ decision to leave probably isn’t the only reason Fortinet is unhappy. While Fortinet remains the leader in UTM appliance sales, Sophos is expanding rapidly in security hardware segment. According to IDC, Sophos’s UTM sales in the past two quarters have increased 23 percent over the same period in 2012. Comparatively, the UTM market grew 18 percent and Fortinet sales climbed 12 percent in the same period.

Hagerman said he and the Sophos team are not worried that the lawsuit will deter people from applying for jobs.

“The more people who know of our momentum, the story we’re building and the commitment to the channel, the more interest we’ll generate with people, partners and customers,” he claimed.

Staff poaching and patent infringement lawsuits are not uncommon among tech companies. Technology vendors will often sue the new employers of their former executives to gain concessions on sales and assurances of intellectual property protection.

What makes the Fortinet lawsuit against Sophos different is the undertones that the staff poaching is systemic.