P&G CHARGING J&J WITH "UNFAIR COMPETITION" OVER HIRING OF EXECS
This article was originally published in The Tan Sheet
Executive Summary
P&G CHARGING J&J WITH "UNFAIR COMPETITION" OVER HIRING OF EXECS from Procter & Gamble in a suit filed May 27 in the Court of Common Pleas in Hamilton County, Ohio. In its complaint, P&G alleged that J&J "has systematically solicited Procter & Gamble employees knowledgeable in the skin care field to assist Johnson & Johnson in the development of its own skin care business." The impetus for the suit was J&J's hiring of two former P&G skin care execs, Neal Matheson and Steven Shaya, who also are named as defendants.
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P&G CHARGING J&J WITH "UNFAIR COMPETITION" OVER HIRING OF EXECS from Procter & Gamble in a suit filed May 27 in the Court of Common Pleas in Hamilton County, Ohio. In its complaint, P&G alleged that J&J "has systematically solicited Procter & Gamble employees knowledgeable in the skin care field to assist Johnson & Johnson in the development of its own skin care business." The impetus for the suit was J&J's hiring of two former P&G skin care execs, Neal Matheson and Steven Shaya, who also are named as defendants. P&G is charging J&J with interference with business relationships, inducement to breach contractual and fiduciary duties and unfair competition. The suit charges Matheson and Shaya with breach of contract and fiduciary duty. P&G asserted that Matheson and Shaya, who "had access to Procter & Gamble trade secrets and other proprietary information applicable to the skin care business," will be working at J&J in "areas which are directly competitive to those areas with which their work at Procter & Gamble has been directly concerned." P&G declared that this violates an agreement signed by the men when they accepted options for P&G stock prohibiting the recipient from engaging in competitive employment for three years. Under the agreement, Matheson and Shaya must refrain from competing with P&G until 1997, according to the complaint. Matheson, formerly director of product development for skin care and personal cleansing at P&G, left in April to become exec VP for product development at J&J. "Matheson will have managerial, product development and research responsibilities for Johnson & Johnson for product areas which are directly competitive to products of Procter & Gamble, including, without limitation, skin care products such as skin cleansers, sunscreens, anti-acne products, skin moisturizers and anti-aging products," the complaint says. P&G markets the Oil of Olay, Noxzema and Bain de Soleil skin product lines, while J&J sells Clean & Clear, Purpose and Sundown skin care products. Shaya left his post as associate director of the hair and skin care technology division on May 24 to assume the title of director of the corporate office of science and technology at J&J. In his new post, Shaya "will be responsible for identifying external technical resources that are applicable to Johnson & Johnson's business interests," which "inevitably" will cause him to "have upstream research and development responsibilities for Johnson & Johnson for projects having applicability to products which are competitive to products of" P&G, the complaint charges. P&G is seeking injunctions barring Matheson and Shaya from taking a position that would be directly competitive with P&G until April 6, 1997 and May 25, 1997, respectively, and prohibiting them from disclosing or using any trade secrets or proprietary information learned while at P&G. The complaint also asks for a declaratory judgment that P&G may enforce the non- competitive section of its stock plan, injunctions barring J&J from soliciting P&G employees in violation of their contractual duties, compensatory and punitive damages and costs. Johnson & Johnson has not yet filed a response to the complaint. |