IBM is suing one of its former cloud executives to try and block him from joining rival Amazon Web Services (AWS).
Ex-IBM CIO for transformation and operations, Jeff Smith, has been accused of ignoring a non-compete clause in his contract, with IBM demanding he pay back $1.7 million (£1.31 million) in stock bonuses, according to local paper Westfair.
An IBM spokeswoman told Cloud Pro: "Mr Smith possesses a wide range of highly confidential information on upcoming technological advances in IBM's cloud design that would be extremely valuable to IBM competitors such as AWS. Mr Smith, while employed by IBM in a senior technical position, engaged in repeated contacts with a senior executive at AWS and then wiped his mobile devices of data after informing IBM that he planned to violate his non-compete to go to work for the CEO of AWS. The company will vigorously protect its intellectual property."
Judge Cathy Seibel, presiding over the hearing, temporarily banned Smith from joining AWS on 1 August. The ban also bars him from soliciting customers, recruiting former colleagues or disclosing any confidential information until the court has heard a full account of the case and come to a conclusion on whether or not he did violate his contract.
This order was withdrawn on 7 August, however, with Seibel giving Smith permission to take part in employee training, as long as he promised not to disclose any information about IBM's future plans.
“Were he permitted to join the senior management of AWS on August 7th, [he] would inevitably be involved in decision-making about how best to compete against IBM and would inevitably disclose or use IBM trade secrets.” Arvind Krishna, director of research at the company said, according to the publication.
IBM said that because Smith was involved in the transformation side of its business, he would have had free access to the company's future plans, including products and services that could potentially compete with AWS's suite of cloud-based products.
Providing this intel to AWS could have a big impact on the success of IBM's new innovations when they hit the market.
A full hearing is scheduled for 21 August, when it will be decided whether Smith will be able to work for AWS before May 2018, when IBM says his non-compete agreement ends, and whether he will have to repay the $1.7 million in shares awarded as a bonus during his employment.
