Calence Sues Dimension Data and Former Employees Charging Civil Conspiracy, Unfair Competition, and a Pattern of Poaching

24 May 2006

Calence, LLC, a leader in building, managing, and optimizing Internet-based voice and data networks, announced today it is asserting new claims and seeking additional remedies against Dimension Data Holdings, plc and its subsidiary, Dimension Data North America, Inc. The lawsuit was brought by Calence because of an alleged scheme perpetrated by Dimension Data and several of its employees to raid virtually all of Calence's 14-person Seattle office earlier this year.

In the suit, captioned Calence, LLC, v. Dimension Data Holdings, plc, et al. and filed in the U.S. District Court for Western Washington at Seattle, Calence charges the South Africa-based defendant, its North American subsidiary, and others with allegedly violating the Computer Fraud and Abuse Act, illegally stealing and disclosing Calence trade secrets, and illegally interfering with contractual customer relationships, and also asserts claims of unfair competition, breach of contract, breach of fiduciary duty, and unjust enrichment. Calence is asking the Court for injunctive and monetary relief, costs, and attorneys' fees on account of the defendants' wrongful conduct.

"One thing is true across the entire technology sector -- your people and your intellectual property are your most valuable assets," Michael Fong, Calence's Chairman and CEO, said. "We believe this lawsuit is the latest powerful reminder that the poaching of personnel and intellectual property has rapidly become one of the most sensitive issues in our industry.

"Such actions have a serious effect on our customers, who depend on their vendors for commitment and service consistency," Mr. Fong added. "This case underscores that crucial aspect even more powerfully than similar litigation involving behemoths like Microsoft and Google. We want to make it clear to our customers in the Pacific Northwest that Calence's commitment to them will never waiver."

Calence filed its original complaint in February 2006 alleging that, from at least December 2005 through February 2006, Dimension Data engaged in a premeditated and unlawful scheme to lure Calence managers into breaching fiduciary duties and competing unfairly by allegedly stealing trade secrets and poaching 13 of 14 Calence employees in the Seattle office. Calence claims the defendants absconded with roughly 32,000 pages of Calence confidential information and computer data in the raid.

The new claims, prepared after substantial court-authorized expedited depositions of key figures, assert how one of the defendants, then serving as General Manager of the Seattle office of Calence's predecessor, Avnet Enterprise Solutions (AES), allegedly operated as a mole for Dimension Data, disclosing confidential AES/Calence information to Dimension Data to help recruit additional AES/Calence employees, develop an operating budget for the Dimension Data Seattle office, and transfer information about AES/Calence customers, potential customers, and business operations to Dimension Data. AES became Calence in February 2006.

Calence is not the first company to claim such malfeasance by Dimension Data. Louisiana-based Global Data Systems, Inc. filed a similar lawsuit against Dimension Data in the U.S. District Court for Arizona in Phoenix earlier this month. The Calence suit also references an allegation that, in 2005, Dimension Data attempted to raid the Chicago office of its competitor, Meridian IT Solutions, Inc. Meridian won a temporary restraining order in that case.

"We completely support and welcome competition in the technology sector," Joseph Hamilton, General Counsel for Calence, said. "However, we believe companies that demonstrate a pattern and practice of raiding, or attempting to raid, their competitors with a result of putting them out of business in a particular market is simply wrong. Companies that value ethics in business need to speak up and take action."

The lawsuit and the additional relief sought by the company illustrate the fact that despite Dimension Data's actions, Calence is committed to the Pacific Northwest market. The company is rebuilding its Seattle office through hiring local staff and relocating its consulting and sales teams. Currently, eight full-time staff are on-site and Calence is looking to reinforce the local sales and service delivery teams in order to support the networking needs of the local business community and public sector and regain a leadership position in the marketplace.

About Calence, LLC

As the largest pure-play network solutions provider in the U.S., Calence, LLC (http://www.calence.com) helps organizations plan, build, provision and operate their network, security, and unified communications infrastructures. Calence works with many of the world's most prominent organizations to leverage network technologies to reduce costs, improve operations and increase productivity. Serving the Enterprise, Commercial, Education (K-12 and Higher Ed) and the Public Sector markets, Calence's areas of specialty include Unified Communications, Network Security, Network Strategy and Infrastructure, and Management Services/Outsourcing.

Headquartered in Tempe, Ariz., Calence operates in more than 20 markets throughout the United States. Calence is a Cisco Gold Partner and is IP Communications Specialized (VoIP), Security Specialized, Wireless Specialized and a Cisco Advanced Technology Partner for IP Contact Centers, Rich Media Communications and Optical-Metro. Its professionals have over 300 Cisco certifications and use a proprietary methodology to consistently deliver the highest levels of customer satisfaction. Calence has been recognized as a "Best Places to Work in IT" and recently received the prestigious Cisco Global Channel Partner of the Year - US/Canada award at Cisco's annual Partner Summit.

Source: prnewswire

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