Johnson Outdoors (JOUT:Nasdaq) has been granted a Temporary Restraining Order by the Maine Superior Court that bars Richard Feehan from working for Confluence. The restraining order was granted on Jan. 28, and upheld by Justice Andrew Mead on Feb. 4.
Johnson obtained the restraining order against Feehan following the news that he had been named the new CEO of Confluence, a major competitor to Johnson Outdoors' Watercraft business unit. Feehan was formerly general manager of Old Town canoe and kayak, Johnson Outdoors' largest paddlesports brand. Johnson is alleging that the hiring of Feehan breaches certain terms of Feehan's non-compete agreement.
"This TRO (Temporary Restraining Order) does exactly what our existing agreement intended -- protects us, our customers and shareholders, while still enabling Rich to pursue a range of employment opportunities. However, non-compete means non-compete, and we will enforce our rights whenever necessary," said Jerry Perkins, chief operating officer of Johnson Outdoors.
A copy of the court order, obtained by SNEWS, indicates that Justice Mead feels Johnson Outdoors is likely to win its case.
"The court is satisfied that the Defendant's former position as General Manager of the Old Town Canoe operation and being a member of the Johnson Outdoors Watercraft Executive Committee clearly put him in a position of confidence and he certainly received all manner of proprietary information (as noted above.) The fact that Defendant gratuitously states that he does not have a good memory of such, or had no paperwork, or that he will not share or use such knowledge misses the point. If he received the information and signed the non-compete agreement, Plaintiff has the right to prevent employment where such information could be communicated to its detriment. Accordingly, Plaintiff has demonstrated a likelihood of success on the merits," wrote Justice Mead.
Feehan declined comment when contacted by SNEWS. Confluence representatives also declined to comment for this story.
A hearing upon the Motion for Preliminary Injunction is scheduled for Feb. 11.
SNEWS View: We are still scratching our heads over this. Call us whacky, but we would think that before hiring an executive to run a company, especially one who recently departed the employment of another company, a competitor no less, it would make sense to contact that company to be sure the hiring would not run afoul of any non-compete clauses. But that's just us. Apparently, Bob Sharp of American Capital Strategies saw it differently, and now Confluence is left swimming in swirling water without a CEO -- again. We can't wait to see what Sharp does IF the court finds in Johnson's favor and bars Feehan from taking the job.