Judge rules Kohlís former executive can take job with luxury retailer
Kohlís argued international company was direct competitor

By Katherine Michalets - Freeman Staff

Aug. 10, 2015

WAUKESHA ó Waukesha County Circuit Court Judge Robert Mawdsley ruled Monday afternoon that a former Kohlís chief information officer would be allowed to take the same position with an international luxury retailer after the Menomonee Falls companyís attorneys failed to prove that a temporary injunction was necessary to protect the company and its clients.

Kohlís sought to stop Janet Schalk from taking the chief information officer position with Hudson Bay Company, the parent company of Sakís Fifth Avenue, Lord and Taylor and Saks Off Fifth, arguing that HBC is a direct competitor and that Schalkís knowledge of Kohlís confidential plans could hurt the company.

Schalkís attorneys argued that HBC was not a direct competitor of the department store known for its discounts and that other higher level executives had broader non-compete agreements than Schalk.

Even though Mawdsley ruled in favor of Schalk on Monday, it will be a few days until she can start her new role. John Kirtley, attorney for Kohlís, asked that the allowance of the status quo would be granted until the end of the week to allow him to speak with Kohlís about possibly filing an appeal of the decision; Mawdsley allowed it.

Monday morning, Schalk took the stand in her defense and was asked questions by her attorney, Saul Glazer. She said that some of the information provided by Ryan Festerling, senior vice president of human resources for Kohlís, during testimony last week wasnít accurate. She said that she did not help design Kohlís Innovation Center and that she did not have as much of a strategic planning role at Kohlís as Festerling had said she had.

During her testimony Monday, Schalk said she was surprised that executives higher in rank than she had more liberal non-compete agreements. She provided examples of some key executives who took positions at other retailers, such as Abercrombie and Fitch, Talbots and Burlington Coat Factory.

Schalk also said that no document she ever saw at Kohlís listed HBC as a direct competitor.

Kirtley pointed out how an earlier draft of Schalkís contract for HBC listed Kohlís as a competitor before it was revised. He also argued that HBCís desire to get Schalk on board fast indicated that she had knowledge they wished to use and that knowledge and experience would have been affected by Schalkís time at Kohlís.

He also said that under the terms of the non-compete agreement, HBC could be considered a direct competitor of Kohlís because it has more than $1 billion in annual revenue, it is a retail business and it has stores within 25 miles of a Kohlís location, which is the criteria for a direct competitor, according to Kohlís.

Under questioning by Kirtley, Schalk agreed that HBC could be considered a competitor under those terms.

While delivering his verdict, Mawdsley said that whether HBC and Kohlís are competitors depends on how you analyze the situation.

ďKohlís success is not driven by her and the IT department,Ē Mawdsley.

Ultimately he said he felt that Schalk should be able to take the position at HBC because other executives who ranked higher than she did did not have as narrow and restrictive of a non-compete agreement as she and they were also privy to the same confidential information, if not more of it.

<<EARLIER: Kohlís argues former executive violated non-compete clause

Email: kmichalets@conleynet.com