Trade Secrets Affect Top Executives
DENVER - Paul Hultin, a director at Wheeler Trigg O’Donnell, is representing Qwest Communications Corp. in a key trade secrets lawsuit filed against AT&T that could set a precedent in matters relating to the hiring of top executives in today's economy.
The case revolves around Charles L. Ward, a former vice president with AT&T, who took a position July 1 with Qwest as vice president of policy and law. Qwest hired Ward to appear before government agencies in seven Western states as a spokesperson in complex rate cases and other regulatory issues. Ward gave notice at AT&T on June 23 and began work for Qwest one week later. During his exit interview at AT&T on July 5, no AT&T officials objected to his new position, and Ward assured AT&T that he would maintain confidentiality regarding his knowledge of any proprietary AT&T information.
But on July 18, Qwest received a complaint from AT&T that threatened a lawsuit over Ward's hiring, and AT&T further demanded that Ward not perform any legislative or regulatory work for Qwest for a period of one year on the grounds that Ward would "inevitably disclose" AT&T trade secrets. On Aug. 7, Qwest sued AT&T in Denver District Court asking for a declaratory judgment affirming its decision to hire Ward and his right to perform his duties at Qwest.
Hultin stated, "Qwest filed the lawsuit seeking a declaratory judgment because AT&T's claims were groundless and were a huge cloud over Chuck and his ability to do his job. We felt we wanted to do whatever was necessary to clear the air." He noted that filing a declaratory judgment action was a novel strategy in an "inevitable disclosure" case.
Drake Tempest, the executive vice president, general counsel and chief administrative officer at Qwest, said the real reason AT&T threatened action was not over the proprietary information Ward might disclose, but to attempt to hamstring Qwest. He noted that six months before Ward's hiring, Qwest hired his former indirect supervisor, R. Stephen Davis, a lawyer who specialized in state government affairs, to become Qwest's senior vice president of policy and law. Davis also had much of the same proprietary knowledge as Ward, but AT&T did not attempt to block his hiring.
The case is currently pending before Judge Matsch in U.S. District Court.
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