WALMART AND CVS IN LEGAL FIGHT OVER NON-COMPETE
This fight will be fun to watch.
Walmart Stores Inc., the world’s largest retailer, sued CVS Caremark Corp. (CVS) to stop the drugstore chain from hiring its ex-executive vice president, Hank Mullany, and a judge temporarily barred him from joining the company.
Walmart is alleging in a lawsuit filed in Delaware that CVS’s hiring of Mullany, 52, former president of Walmart’s northern U.S. division, would violate a non-compete agreement. The judge assigned to hear the case promptly issued an order blocking Mullany from taking his new post until after a December 15 court hearing.
Mullany, hired by Walmart in 2006, oversaw operations at 587 Walmart stores in 13 states including Pennsylvania, Virginia, New Jersey and New York, according to the suit. He was “privy” to Walmart’s national strategies and responsible for implementing those strategies in the northeastern U.S.
Walmart claims “Mullany’s employment with CVS will necessarily require Mullany to use and disclose Walmart’s confidential information.” “Knowledge of Walmart’s confidential information would be extremely valuable to CVS and will be used by CVS to gain competitive advantage.”
Walmart’s complaints sound like an “inevitable disclosure” argument to me. In other words, even if Walmart cannot prove it, it is “inevitable” that Mullany will unfairly use information he gained while employed at Walmart to the advantage of CVS and the detriment of Walmart.
My Take: I think Walmart’s argument is “HOGWASH” and am thankful the Commonwealth of Virginia, to my knowledge, has never accepted the “inevitable disclosure” argument.