IBM has sued to stop a former high-ranking executive from working for Microsoft.
The Armonk company accused Rodrigo Kede Lima of violating a noncompete agreement and misappropriating trade secrets and is demanding the return of nearly $1.3 million in stock options, according to a lawsuit filed June 15 in U.S. District Court in White Plains.
“Lima is violating his noncompetition agreement by seeking immediate employment at the highest levels of Microsoft,” the complaint states, “where he cannot avoid exploiting his IBM client relationships and using his knowledge of IBM confidential business plans to face off against IBM.”
Lima responded in a court declaration that IBM has no legitimate interest in stopping him from accepting the position of corporate vice president for Latin America.
“My work at Microsoft will not put IBM at any competitive disadvantage whatsoever,” he stated, but he will suffer “significant undue hardship” if not allowed to work for a year.
Lima resigned on May 18 and had planned to start the new job May 20. The start date was postponed to June 19, after IBM objected. Now he must wait until at least mid-July, following a court hearing on July 14 scheduled by federal judge Philip M. Halperin, who temporarily restrained Lima from working for Microsoft.
Lima, a native of Brazil who lives in Riverside, Connecticut, worked for IBM for 25 years. By 2012, he was general manager for Latin America. In 2017 he was promoted to global technology services manager. In January he was made general manager of integrated accounts, where he was responsible for overseeing the 77 most valuable customers.
“Lima was among the top 1% of IBM’s highest-ranking executives, with a seat at the table alongside the chairman and chief executive officer,” the complaint states.
IBM claims that Lima was privy to corporate secrets and strategies, including confidential information about top customers. The company cites cloud computing as one of its most intense areas of competition with Microsoft, where Lima allegedly has in-depth knowledge of IBM products in development.
Lima poses a competitive threat “not merely because he knows the company’s trade secrets,” the complaint states, “but because he has developed relationships with significant IBM customers and potential customers.”
The competition is especially fierce in Latin America, according to the complaint, “where Lima’s client connections are particularly strong.”
Lima was paid more than $4 million in compensation and equity over the past five years.
He agreed not to accept a position with a competitor or to solicit IBM customers for 12 months after leaving the company.
Lima argues that IBM is exaggerating his knowledge of products and strategies.
The financial information to which he had access, for instance, has no relevance beyond the current quarterly reporting period. He is unaware of global business and investment plans for the next 12 months. He has done no business for IBM in Latin America since July 2018.
His knowledge of cloud computing is minimal, he stated, IBM’s claim that it is a serious competitor to Microsoft in cloud computing is “dubious,” and Latin America represents only 5% of IBM’s global technology market.
He claimed he has returned all IBM documents, deleted emails and files from his personal devices, and has disclosed no confidential information to anyone outside of the company.
“I have not violated and will not violate that agreement,” he said in reference to the noncompete agreement.
His decision to leave IBM was not financially motivated. In fact, he declared, he forfeited $8.5 million in stock options that would have vested by 2022.
He was motivated, he said, by “deep unhappiness working for the company.”
IBM, he explained, is highly centralized, and even though he was a senior executive he was not empowered to make basic managerial decisions without corporate approvals.
“I attempted to change the highly centralized corporate culture at IBM, but after several years of trying, I came to realize that my efforts were futile under the current leadership.”
If he is prevented from working for Microsoft or for any technology company in this fast-moving industry, he stated, his skills will become obsolete, his management abilities will deteriorate, and he may not be able to find a comparable position in a year.
IBM is represented by Manhattan attorneys Robert A. Atkins, Liza M. Velazquez and Pietro J. Signoracci. Lima is represented by Manhattan attorneys James H. McQuade, Mark R. Thompson, Michael Delikat and Robert N. Holtzman.
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