Law360 is reporting that the Hewlett-Packard Company (HP) sued its former Chief Technologist for its StorageWorks unit, Paul Perez, in Houston, Texas on Wednesday, November 16, 2011, to enforce a non-compete and non-disclosure agreement. Perez resigned to join Cisco Systems on Monday, November 14, 2011, and according to HP, he has filed a preemptive lawsuit in California asking for a ruling that he is free to work for Cisco.
According to the complaint filed in Hewlett-Packard Company v. Paul Perez, Harris County, Texas (Dist. Court No. 201169187), Perez was responsible for leading the HP StorageWork unit’s technology strategy and exploration processes, keeping a census of its IP portfolio, and leading the unit’s patent review process. After working for HP for more than 25 years, Perez executed a one-year non-compete in 2010. HP contends that Cisco is a direct competitor and that by serving as Chief Technology Officer with Cisco’s Server Access Virtualization Technology Group, Perez is violating his non-compete.
Like some other high profile disputes involving senior executives, there is a looming battle over which law and forum should govern. According to HP, Perez agreed that he would not pursue any legal action to set aside or avoid his non-compete. However, on the day that he resigned (November 14, 2011), Perez filed a complaint against HP in California challenging the enforceability of his non-compete (Perez v. Hewett-Packard Company, Cause No. 111-CV-213052, Superior Court of California, County of Santa Clara). HP argues that the court should disregard Perez’s claims of California residency because he still owns a home in Texas and never advised HP of any move to California.
As I have written before, the first court to hear the injunction generally decides the outcome of the case. Most if not all of these cases involve efforts by the former employee to invoke California law, which we all know forbids non-competes except under the most limited circumstances. However, California courts have not been terribly receptive to eleventh-hour claims of residency and have been willing to defer to the court in the state in which the employee previously resided. For example, in a high profile non-compete case in 2009, David Donatelli, the chief of EMC’s storage division, moved from Massachusetts to California to join (ironically) HP and tried the same approach; that strategy fizzled when the Massachusetts court enforced the non-compete in substantial part and the California court then demurred on grounds of comity. (Full disclosure: I have represented EMC in the past).
I will keep an eye on this one and provide an update if there is a decision.