UPDATED below with Microsoft comment and McIntyre declaration. Also see this follow-up story about how employment lawyers are reacting to the suit.
IBM has filed suit against one of its longtime executives, Lindsay-Rae McIntyre, alleging that her new position as Microsoft’s chief diversity officer violates a year-long non-compete agreement, allowing the Redmond company to use IBM’s internal secrets to boost its own diversity efforts.
The suit, filed federal court in New York today, describes McIntyre as one of the company’s “most senior executives with knowledge of IBM’s most closely guarded and competitively sensitive strategic plans and recruitment initiatives,” including “confidential strategies to recruit, retain and promote diverse talent.”
In her new role at Microsoft, she would compete for many of the same types of hires she previously recruited for IBM, the suit says.
McIntyre was at IBM for more than 20 years, most recently as HR VP and chief diversity officer. Announcing the hire this weekend, Microsoft said she would “drive a multitude of existing cross-company initiatives to further Microsoft’s progress in building a diverse and inclusive culture.”
However, IBM claims in its suit that it will be “inevitable” for McIntyre to use IBM’s trade secrets against the company.
The complaint cites a separate lawsuit against Microsoft over allegations of gender discrimination, in which the company has sought to keep its own data on gender equity and diversity under wraps. “As Microsoft has admitted, disclosure of the very type of confidential information that McIntyre possesses — non-public diversity data, strategies and initiatives — can cause real and immediate competitive harm,” the suit says.
Bloomberg cites a court filing in which attorneys for McIntyre describe the non-compete clause as overbroad. “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,” the attorneys wrote.
Microsoft said in a statement, “We’re pleased that Lindsey-Rae decided to join Microsoft, both to continue to grow in her career and so she, her husband and their three young children could be closer to her parents and extended family on the West Coast. We have no interest in any of IBM’s confidential information.”
In a declaration filed with the court, McIntyre says, “For diversity work to be effective, it has to be specific and customized to the company and workforce at issue. My work at Microsoft must be centered on Microsoft’s corporate culture and its internal goals as an organization, which are entirely distinct from IBM’s culture and goals. Similarly, inclusion focuses on what it feels like to belong and is entirely focused on management and culture. Therefore, while the work that IBM (or any other technology company) does on these issues may be interesting, it is not practically useful in my role at Microsoft.”
Lawsuits over non-compete agreements crop up from time-to-time in the tech industry, but typically they involve top engineers or high-ranking product leaders. The suit against McIntyre signals the growing significance of diversity initiatives in major tech companies.
A hearing is set for Feb. 22. In the meantime, U.S. District Judge Vincent L. Briccetti has temporarily barred McIntyre from working at Microsoft. We’ve contacted Microsoft for comment.
Here’s the full text of the lawsuit.