IBM-Microsoft spat elevates diversity to tech-secret level

Bloomberg

International Business Machines Corp. called foul on Microsoft Corp’s hiring of its chief diversity officer in a case that elevates recruiting and promotion of an inclusive workforce to the level of safeguarding proprietary technology. IBM claims the information that Lindsay-Rae McIntyre possesses — including confidential data about diversity, strategies and initiatives — can cause “real and immediate competitive harm” if she’s allowed to move immediately to Microsoft. IBM sued to enforce a one-year non-competition agreement.
While the lawsuit highlights the contention that can ensue when a senior employee bolts for a rival, it also shines a light on the increasing role that diversity measures play in corporate America. Technology and financial companies have reserved those fights in the past to employees who possessed key technical or strategic knowledge, not those entrusted to make decisions on hiring and the makeup of the workforce.
IBM is wrongly seeking to enforce an “overbroad” non-competition clause against an employee who has taken no confidential information, McIntyre’s lawyers responded in court filings. “IBM surprisingly seeks a draconian temporary restraining order and preliminary injunction to prevent McIntyre from working — for an entire year, in any position, anywhere in the world, for any company IBM deems to be a ‘competitor’ in any dimension,” her attorneys said.
US District Judge Vincent L. Briccetti temporarily barred McIntyre from moving to Microsoft over her attorneys’ objections and scheduled a conference for Feb. 22.
“McIntyre was at the center of highly confidential and competitively sensitive information that has fueled IBM’s success” in diversity and inclusion, the company said in a statement. “While we understand Microsoft’s need to deal with mounting criticism of its record on diversity, IBM intends to fully enforce Ms. McIntyre’s non-compete agreement to protect our competitive information.”
In its complaint, filed in federal court in White Plains, New York, IBM pointed to Microsoft’s own attempts to keep details about its diversity efforts secret. In a separate lawsuit, in which Microsoft is accused of discriminating against women in technical and engineering roles, the Redmond, Washington-based company insisted that internal communications and documents about its diversity data and strategies be filed under seal because they’re so sensitive.
Non-competition clauses are common in the technology industry, covering most employees, said Evan Starr, an assistant professor at the University of Maryland’s Robert H. Smith School of Business.