VMware sued its former executive for failing to meet its contractual obligations

 

In early December, nutanix, a company that offers enterprise cloud management products, announced the hiring of former VMware executive Rajiv Ramaswami, to join their ranks as CEO of the company.

Since last summer Dheeraj Pandey, co-founder of Nutanix, announced his intention to leave this position. Therefore, Nutanix called Rajiv Ramaswami to replace Dheeraj Pandey. For Ramaswami, this new position comes across as a great promotion when we learn that he only held the position of Director of Operations for Cloud Products and Services within VMware.

As an asset, Nutanix's new CEO has 30 years of industry experience of cloud technology, with a stint at Broadcom, Cisco, Nortel and IBM not counting his last position at VMware.

For Nutanix, is a safe bet of the multicloud that has just joined its ranks and it will add value to the company. But for VMware, one of Nutanix's top key competitors offering various products related to virtualization of x86 architectures, this departure from Ramaswami could contribute to weakening the company, in terms of available human resources.

While this case was believed to be closed, VMware announced a few days ago that it had initiated a legal process in the Superior Court of the State of California, Santa Clara County, against Rajiv Ramaswami, former COO of VMware, for breaches of material and ongoing obligations and legal and contractual obligations with VMware.

To better inform the public, VMware explains that Rajiv Ramaswami has not fulfilled its fiduciary and contractual obligations with VMware. For at least two months before leaving the company, while working with senior management to shape VMware's key strategic vision and direction, Ramaswami also secretly met with at least the CEO, CFO and apparently the entire board of directors of Nutanix, inc. to become the CEO of Nutanix.

For VMware:

“Mr. Ramaswami showed poor judgment and experienced a clear and prolonged period of conflict of interest. You should have disclosed this conflict of interest to VMware so that the company could take steps to protect itself. But it did not inform VMware, thus depriving the company of the ability to do so by hiding its activities related to Nutanix. "

The company adds that it is not by nature a contentious company. Also, she “He tried to solve this problem without litigation. But Mr. Ramaswami and Nutanix have refused to interact successfully with VMware, ”says VMware.

Through this lawsuit, says Brooks Beard, vice president and associate general counsel of VMware, “We hope to find a way to protect the rights and interests of VMware and the actions that we could have taken, we could have made the best decision if we had know about this possible conflict ”.

nutanix, on the other hand, claims the VMware lawsuit is aimed at making a new job interview illegal.

We view VMware's wrong action as a response to the loss of a deeply valued and respected member of its management team. " The company adds: “Mr. Ramaswami and Nutanix did their best to be proactive and cooperative with VMware during the transition. Nutanix and Mr. Ramaswami have assured VMware that Mr. Ramaswami agrees to their obligation not to take or abuse confidential information, and VMware does not claim otherwise. "

However, VMware asked Mr. Ramaswami to agree to limit the ordinary performance of his duties in a way that amounted to an illegal non-compete agreement and asked Nutanix to agree not to hire from VMware applicants in a way that Nutanix believes it would violate federal antitrust laws.

Mr. Ramaswami is proud of his tenure at VMware and has many VMware team members as friends. It's disappointing that VMware management is suing you simply because you chose to seize the opportunity to become CEO of a public company. We believe that VMware's action is nothing more than an unfounded attempt to harm a competitor and we intend to vigorously defend this case in court. "

Sources: https://www.vmware.com, https://www.nutanix.com


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