WAUKESHA - The arguments during Thursdayís
hearing regarding whether Kohlís former chief information
officer, Janet Schalk, violated the non-complete clause of her
contract when she accepted the same position with Hudson Bay
Company centered on whether the two retailers are direct
Kohlís attorney, John Kirtley, also contended
that the knowledge Schalk had about Kohlís operations was
desirable and useful for HBC, which includes Saks Fifth Avenue,
Saks Off Fifth and Lord and Taylor.
Ryan Festerling, senior vice president of human
resources for Kohlís, said that by sitting on the companyís
executive committee, Schalk would have access to confidential
information regarding the companyís plans, referred to as its
Greatness Agenda, and to the implementation strategies called
Bold Moves. Festerling testified that Schalk was assigned to
four of the 10 Bold Moves.
While Greatness Agenda is not a secret, its
implementation is. ďThatís the secret sauce of getting it done,Ē
Festerling said. Schalk also sat on the information technology
steering committee for Kohlís.
At Kohlís, Schalk was behind the gathering of
ďbig dataĒ and instrumental in the planning of Kohlís Innovation
For her work, Schalk was compensated about $1.5
million annually. Her contract for HBC was about $2.337 million
per year and a document presented Thursday showed after spending
five years with the company sheíd stand to make about $12
million. At 10 years, the amount would be closer to $30 million.
Schalkís attorney, Bernard Bobber, questioned
Festerling about whether HBC could be considered a direct
competitor of Kohlís. Bobber pointed out that the contract
listed several companies that would be considered direct
competitors, including Sears, Target and JC Penney, but said the
list did not include HBC.
Bobber also argued that the contracts for other
primary executives, including the chief merchandising officer
and the chief financial officer, did not include HBC.
Bobber argued as well that Kohlís and HBC are not
direct competitors because Kohlís describes its merchandise as
moderately priced, while HBCís stores sell luxury items.
Under questioning, Festerling referred to Schalk
as a ďcompetitive threatĒ and that by hiring her, HBC could
help to close the gap it has with Kohlís.
Before joining Kohlís, Schalk served as CIO for
Target. Festerling said Kohlís hired her because the company
leaders believed she could ďtransform us.Ē
Some of the confidential knowledge that Schalk
has, Festerling said, is the brands Kohlís intends to buy and
the architecture for its systems.
Dan Caspersen, executive vice president of human
resources for HBC, said the company actively recruited Schalk
based on her previous work experience and her ability to merge
multiple systems within one company for a unified technology
Different drafts of the contract presented to
Schalk were admitted as evidence Thursday. An earlier draft
listed Kohlís as a competitor in the non-compete section of the
contract, but was later revised because HBC general counsel
realized a mistake was made, Caspersen said. He also said that
neither he nor the companyís CEO listed Kohlís as a direct
competitor and their contracts said they could not go to work
for a luxury retailer for one year after leaving HBC.
A hearing will reconvene 8 a.m. Monday in the
Waukesha County Courthouse, 515 W. Moreland Blvd. Schalk is
expected to testify.