IBM sues an Indian poached by Microsoft

By agencies   |   Thursday, 15 June 2006, 07:00 Hrs
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Former employee and Fellow of IBM, Rakesh Agarwal has been charged of breaching his contract and exercising options as a current employee with the Big Blue competitor Microsoft.

Agarwal, who left IBM after 16 years and joined Microsoft in May this year as a Fellow in the fellowship of the Vole, was credited to being largely instrumental for inventing “data mining” at IBM. However, IBM has accused him of breach of contract and has filed an action in a New York district court.

IBM claimed that it had tried to retain Agarwal with stock options as recently as 16th September last year with a clause that if Agarwal joined a competitor within 12 months of leaving IBM, he would not be able to exercise such options.

Agarwal defended himself, stating that IBM exercised a number of options, the last being February 14th 2006. In all, Agarwal had cashed in $777,564.76 worth of IBM stock.

However, IBM alleged that Agarwal knew Microsoft was a competitor and by rendereing services to the IBM competitor within 12 months of exercising the options, he seemed to have no intention of repaying the gains he realized as a result of exercising those options. By not complying with the 1994 plans and the 2005 agreement, he had violated the provisions of the IBM options and had intended to defraud IBM with those material false representations, alleged Big Blue.

IBM also said that if it had the knowledge that Agarwal would join Microsoft as a Technical Fellow, it wouldn’t have allowed him to exercise the options. IBM has asked Agarwal to return the $777,564.76. with no response to its letter from Agarwal’s end, IBM moved the courts.

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