EMC Wins Another Round In Court Battle Over Donatelli

While EMC battles NetApp for control of Data Domain, it has won a second court battle over former executive David Donatelli. A California state judge has upheld the non-compete clause in Donatelli's employment contract, according to a report in the Wall Street Journal.

Donatelli, a long-time EMC executive and president of the company's storage division, surprised many when in April he jumped ship and took a job at HP to head up a new unit that included enterprise servers, networking and storage. He was to have started in the new job May 5.

A legal battle ensued, with EMC and Donatelli both filing lawsuits. EMC sought a preliminary injunction to prevent Donatelli from taking the job, citing the non-compete clause. Donatelli also filed suit to gain the right to work for HP despite the non-compete clause.

A Massachusetts court ruled that Donatelli could begin working at HP, but said he couldn't work on storage systems for a year. HP said it would keep storage as a separate unit and that Donatelli would oversee a unit made up of enterprise servers and networking.

"Donatelli will serve as executive vice president of enterprise servers and networking," HP said after the first court ruling. "Due to certain restrictions in the court's most recent order, Dave Roberson, senior vice president and general manager of the StorageWorks division, will report directly to Ann Livermore, executive vice president of the Technology Solutions Group at HP, until the order is lifted. HP is pleased with the court's recent decision and looks forward to the contributions Donatelli will make to HP's business."

It is hard to imagine that Donatelli, who also will report to Livermore, won't make suggestions and contribute ideas for HP's storage operations. But the court ruling will prevent the company and Donatelli from integrating servers, storage and networking into a single business unit and more easily sell packages of data center infrastructure to businesses.

So, EMC wins this battle -- more or less. It still loses a top, experienced executive to a rival that has growing ambitions in the storage market. But, as many have said, the company has a deep bench and should be able to move forward without missing a step. It can only hope for as good an outcome in the fight for Data Domain.