As he sat in an Evansville, Ind., conference room Jan. 3, listening to fellow Rexam Closures & Containers executives map out their 2008 business strategies, John Whitehead was about to drop a bombshell on his employer.
At the end of the meeting, Whitehead, then sales director of the closures and containers division of London-based Rexam plc, announced he was resigning to take a position with competitor Berry Plastics Corp. as vice president for business development in Berry's rigid closed-top division.
The announcement stunned Rexam officials and set in motion an investigation that resulted March 7 in the filing of a lawsuit against Whitehead and Evansville-based Berry in Vanderburgh County Circuit Court.
Rexam alleges Whitehead committed breach of contract by not disclosing he had accepted a job at Berry and he shared confidential business secrets that will give Berry an unfair business edge.
Rexam seeks a court order preventing Berry from using any confidential Rexam information it received from Whitehead, as well as barring Berry from recruiting Rexam employees in the immediate future. The suit seeks ``compensatory and punitive damages, in an amount to be proven at trial.''
In a March 24 e-mail, Greg Brooke, Rexam's vice president of communications, said the company would not comment on pending litigation. ``This is an unfortunate situation, but we must protect our competitive information,'' he said.
The eight-count complaint alleges Whitehead on Dec. 11 accepted a job offer from Berry, talking with Berry since September without informing Rexam.
The suit alleges Whitehead, a key manager in Rexam plc's 2007 acquisition of Owens-Illinois Closure Inc., prepared Rexam's 2008 closures budget and downloaded a copy of the final document while engaged in salary negotiations with Berry.
At about the same time he took the Berry job, Rexam claims Whitehead recruited co-workers - including Todd Mathes, formerly senior vice president and general manager of Rexam's closures division, who now has a similar job at Berry - to work for the competition.
The lawsuit further alleges Whitehead on Jan. 2 downloaded a Rexam database of more than 500 customers, suppliers, vendors and contractors and e-mailed himself a copy without company knowledge or approval.
``Since hiring Mathes and Whitehead, Berry has solicited accounts where [it] had not been active before,'' the complaint said. ``Berry has solicited multiple Rexam employees, including sales and engineering employees who have accepted employment with Berry.''
The lawsuit includes a copy of confidentiality agreements Rexam said Whitehead signed in 1993 with Sunbeam Plastics Corp., which Rexam later acquired. Rexam argues the agreements remain in force, as its closures division is Sunbeam's successor.
Also attached are copies of Rexam's corporate policies on confidentiality and electronic communications, which Rexam said Whitehead signed in 1999.
Calls to Berry and Whitehead seeking comment were referred to attorney Bonita Stone of Katten Muchin Rosenman LLP, in Chicago. In a March 26 e-mail, Stone said Rexam never presented Whitehead with an agreement containing noncompetitive provisions.
Stone called the lawsuit meritless and ``a naked attempt to stifle lawful competition and free trade.'' She denied Whitehead disclosed confidential Rexam information to Berry or recruited Rexam employees to jump ship.
``Berry views the suit in general as one intended to threaten an employee's right to seek and engage in legitimate new employment,'' she said. ``While we recognize that there may well be employees at Rexam who are looking for, or desirous of, new employment, due to dissatisfaction or other personal reasons, that is not a result of any wrongful act by Mr. Whitehead.''
A hearing is scheduled May 19 on a motion for a preliminary injunction to stop Whitehead from working for Berry and for Berry to disclose and return any of Rexam's information that it received.