Difficult Questions For Dahlgren

"Bruce, how big is the enterprise printer market?" Hurd asked.

Bruce, of course, is no less than Bruce Dahlgren, the former Lexmark vice president and general manager of North American Printing Solutions and Services who defected in January to become HP's vice president of worldwide enterprise sales.

When asked about how Dahlgren was doing at HP, another HP printing executive sitting in the audience said, "He's a great guy. He's very busy overseeing our printing business in Europe."

If he's overseeing European operations, why was he at an Americas partner conference?

That may be one of the uncomfortable questions Dahlgren may have to answer when he returns to an unfriendly Kentucky court tomorrow (as currently scheduled) in the continuing legal drama over the alleged violation of his noncompete agreement with Lexmark.

You see, when Dahlgren defected in February, he gave Lexmark no notice of his future employment plans. Under the terms of his noncompete agreement, Dahlgren is prevented from working for a competitor for at least 12 months and cannot recruit talent from Lexmark for three years.

At Lexmark, there's no love lost for Dahlgren, but there is concern for what he may have taken to HP when he left. Dahlgren, who Lexmark has called one of its "top 20 executives," was deeply involved in the printer vendor's long-range strategic plans. As an HP executive who oversees the top 1,500 enterprise printer accounts, that knowledge could seriously harm Lexmark in the enterprise marketplace.

"HP had and has reason to know that Dahlgren has knowledge of confidential information and/or trade secrets belonging to Lexmark, and that Dahlgren's knowledge was acquired under circumstances giving rise to the duty to maintain secrecy or limit its use," Lexmark wrote in its complaint.

Dahlgren and HP were smart, though. Even before Lexmark, a Kentucky-based company, could react, they filed a lawsuit in the employee-friendly California courts, which typically don't recognize the legitimacy of noncompete agreements. Lexmark did file its own complaint in the Bluegrass courts, and the two courts agreed to impose an injunction on Dahlgren, which prevents him from working in North America until the case is disposed.

While HP won't officially comment on the case, other HP executives are somewhat nonchalant about it. Dahlgren's boss, Vyomesh Joshi, actually gives the impression that the European assignment was planned.

"Bruce is focused more on EMEA, Europe and Asia Pacific. He brings a lot of experience that we can apply there. That's what he is focusing on," HP's executive vice president of HP's printing and imaging group told VARBusiness. "He has so much work to do. Europe is a very big market -- we are definitely aiming there -- and we will continue to lead there. Those geographies have tremendous growth right now. We have a lot of work to do there."

Such statements are all the more curious given Dahlgren's appearance at HP's Americas Partner Conference. And that appearance could give ammunition to Lexmark attorneys, who reportedly plan to tell the court that Dahlgren is violating the injunction. Lexmark's counsel will also ask the court to compel Dahlgren to answer specific questions about the terms of his employment agreement with HP.

HP has reportedly indemnified Dahlgren for the legal costs and any personal losses associated with the lawsuit. Once source says HP has already spent more than $1.5 million on the case. Should Dahlgren and HP lose, HP would also reportedly have to cover the $600,000 in Lexmark stock options Dahlgren would have to forfeit.

"Bruce has said [the lawsuit] really doesn't matter, since the noncompete runs out in December," said the same HP executive in the audience.

Nevertheless, expect Dahlgren to be asked by the court why he was at an Americas partner conference when its order prevented him from working in North America. And anticipate many other questions: Did he approach HP for a job, or was he recruited? Why didn't he give Lexmark notice about his future employer, as required by his noncompete agreement? What other perks did HP promise for his defection? And how is the view of the European market from his San Diego office?

This has all the potential for a Matlock movie of the week. Stay tuned.