June 26 (Bloomberg) -- International Business Machines Corp. can’t block its former mergers-and-acquisitions chief, David L. Johnson, from working for Dell Inc. during his ex- employer’s lawsuit against him, a judge ruled.

Johnson, a 27-year IBM veteran, would suffer unfairly in his career if IBM’s one-year noncompetition agreement kept him on the sidelines at Dell, U.S. District Judge Stephen Robinson in White Plains, New York, ruled today. IBM said it will appeal.

Dell, based in Round Rock, Texas, hired Johnson last month, triggering a lawsuit in which Armonk, New York-based IBM accused him of violating the agreement intended to protect trade secrets and retain employees. Johnson, 55, says he isn’t bound by the contract because he intentionally signed it in the wrong place.

“IBM has overstated its case,” Robinson wrote. “Mr. Johnson does not have the sort of information that is considered quintessential trade-secret information -- detailed technical know-how, formulae, designs or procedures.”

IBM isn’t likely to succeed in proving the agreement is valid, the judge wrote. Robinson noted that IBM, the world’s biggest computer-services provider, sent the original contract back to Johnson, who refused to sign another.

“IBM has already filed a notice of appeal in the 2nd Circuit,” IBM spokesman Douglas Shelton said today in an e- mail. The judge found IBM would “undoubtedly suffer harm” without the injunction, Shelton said.

Not Properly Signed

At issue in the lawsuit is whether the 2005 agreement is valid, even though it wasn’t properly signed by Johnson and IBM never followed through on threats to take away his equity in the company if he didn’t re-sign it.

“IBM asked Mr. Johnson to re-sign a new copy of the non- competition agreement on the proper signature line, essentially asking him to clarify his intentions,” Robinson said. “Mr. Johnson then unambiguously stated his intention -- he refused to sign the agreement in the appropriate space.”

In the ruling, Robinson said it still isn’t clear how many potential acquisitions and divestitures IBM was considering when Johnson resigned, how critical the potential deals are to IBM or Dell, or which other companies might have been aware of the possible transactions.

Robinson didn’t make a final ruling on the case and said in his decision that there are “serious questions going to the merits to make them a fair ground for litigation.” Today’s decision means Johnson can work for Dell while the lawsuit proceeds.

Strategic Information

Johnson, who held his last position at IBM for nine years, testified at a June 22 hearing he doesn’t have a “great deal” of IBM’s confidential information or trade secrets. Although Robinson ultimately agreed, he said Johnson has “inside strategic business information” and that IBM would be harmed without the injunction.

Robinson also sided with Johnson’s claim that if he were prevented from carrying out his duties at Dell, his skills would become obsolete and he would lose contact with his network of investment bankers and consultants.

“The damage to Mr. Johnson’s career and the risk that he will be sentenced to an early retirement, especially during these volatile economic times, cannot be underestimated,” Robinson said. “Due to the nature of his qualifications and skills, Mr. Johnson must deal with information that changes rapidly and requires constant attention.”

The case is International Business Machines v. Johnson, 09- cv-04826, U.S. District Court, Southern District of New York (White Plains).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

Last Updated: June 26, 2009 16:42 EDT