Risk & Compliance

Kohl’s Loses Bid to Stop Exec From Taking New Job

A Wisconsin judge rules Kohl's didn't prove that Janet Schalk's move to Hudson's Bay posed a direct competitive threat.
Matthew HellerAugust 17, 2015

A Wisconsin judge on Monday denied an initial effort by Kohl’s Corp. to block its chief information officer from joining Hudson’s Bay Co. , saying the evidence didn’t show that the two retailers are competitors.

Kohl’s was seeking a temporary restraining order barring Janet Schalk’s move to Hudson’s Bay, citing her employment contract, which called for her to wait a year before taking a similar job with any company that does more than $1 billion in annual sales and operates a retail business. She resigned from Kohl’s on July 22 to join Hudson’s Bay as its CIO.

“She has the playbook, the crown jewels, our entire strategy in her hands,” Ryan Festerling, Kohl’s senior vice president of human resources, testified in Waukesha County Circuit Court.

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But Kohl’s was unable to convince Judge Robert Mawdsley that Toronto-based Hudson’s Bay — whose U.S. operations include high-end retailers such as The Bay, Saks Fifth Avenue, and Lord & Taylor — constitutes a direct competitor, and that Schalk was privy to proprietary information that could damage Kohl’s.

“If Ms. Schalk made [Hudson’s Bay’s] IT platform, etcetera, better, I don’t see how that harms Kohl’s,” Mawdsley said.

According to the Milwaukee Business Journal, he also noted that other Kohl’s executives who know as much or more about the business have less restrictive no-compete agreements. “I haven’t seen a basis for why she should be treated differently,” he said.

Kohl’s argued that Schalk, as a member of its executive committee, knew about all the firm’s strategic plans and business initiatives

“Schalk poses a competitive threat far more dangerous to Kohl’s than other competitors who are not privy to the very private information to which Schalk was provided access,” the company said in a brief.

But Schalk contended Hudson’s Bay hired her because of her track-record consolidating information technology at Target, an initiative Hudson’s Bay is now pursuing with its retail chains.

“[Kohl’s] claim of harm is a ladder of speculations,” Schalk’s attorney Bud Bobber said.

Judge Mawdsley stayed his ruling for a week to give Kohl time to consider an appeal.