Judge refuses to bar ex-Verizon exec’s work for rival

A federal judge on Wednesday rejected an attempt by Verizon Wireless to keep one of its former executives from working for a startup competitor.

Verizon sued Lewis Langston III after he left the cellular heavyweight last month. The company says the move violates his contract and contends that Langston will use his insider knowledge to unfairly benefit his new employer, Allied Wireless Communications Corp. Verizonasked Judge James Moody of the U.S. District Court for Eastern Arkansas on Tuesday to forbid Langston from further Allied work.

But Moody refused, saying that Verizon failed to prove Langston’s new job posed a real and immediatethreat to its trade secrets. He added that whatever potential threat might exist is outweighed by the needs of both Langston and the public.

“He [would] lose his family’s sole income and his options for employmentin Little Rock are limited,” Moody wrote in a late-afternoon court order. “The Court is also cognizant of the chilling effect an injunction would have on Verizon employees who, in the face of an insecure job future, are examining the job market in Arkansas.”

Moody also said he “finds Mr. Langston to be an individual of integrity,” one who remains bound by confidentiality agreements with Verizon to keep its secrets safe.

Langston said Wednesday that Moody’s decision should help protect former Alltel and Verizon workers’ ability to join his company. “This is really about jobs in Arkansas,” he said.

Contending that the lawsuit is a personal attack,he took particular pride in Moody’s evaluation. He added: “There’s definitely some personal satisfaction in this.”

Verizon bought Alltel Corp. earlier this year for $28 billion. But regulators forced the New Jersey-based company to sell pieces of the old Alltel business.

One buyer was Atlantic Tele-Network Inc. of Salem, Mass., Allied’s parent company, which paid $200 million for about 800,000 rural wireless customers, mostly across the South and Midwest. It announced Dec. 16 that a new company, Allied Wireless, would put its corporate headquarters in Little Rock and hire up to 250 workers at sufficiently attractive salaries to lure old Alltel hands.

Before leaving Verizon last month, one of Langston’s jobs was to negotiate the $200 million deal withAllied.

Verizon said Langston could apply his knowledge of the company’s billing system to the unfair advantage of Allied. It says his move violated his contract and state law designed to protect companies’ trade secrets.

Allied said Langston’s duties there over the next year would focus on building or buying a billing system. Its lawyers said that Langston’s Verizon knowledge would not be applicable, in part because the two companies are not the same size. And Allied Chief Executive Officer Frank O’Mara testified that barring Langston from his new job would scare former Alltel workers from seeking the new jobs with his company.

“The big fear for us was that this was an attempt by Verizon to dampen our ability to get up and running,”O’Mara said in a Wednesday interview. “We do have to get started. We do have to set up operations. We do have to get a staff. It just would seem that since they’re going to be laying off hundreds of people, that they could be more cooperative with us to help us get started.”

Verizon’s acquisition of Alltel, whose headquarters was in Little Rock, is expected to eliminate more than 1,000 jobs.

Moody agreed, saying that a restraining order would have a “chilling effect” on Verizon employees. Verizon, which has been laying off employees companywide all year, has said it is not trying to stop Allied from hiring former Alltel employees.

A Verizon spokesman Wednesday declined to comment, saying Moody’s decision hadn’t yet been reviewed.

Business, Pages 21 on 12/24/2009

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