A Wisconsin reserve judge denied Kohl’s request to block CIO Janet Schalk from leaving the company to take the same position at Hudson’s Bay Company, according to The Milwaukee Journal Sentinel.
Kohl’s filed a suit against Schalk on July 24 in Waukesha County, Wisc., seeking a court order barring her from taking a similar position at a competitor. Reserve Judge Robert G. Mawdsley struck down the retailer’s request for a temporary injunction, as Kohl’s had not proven that a non-compete contract covering Schalk would likely stand up under Wisconsin state law.
Schalk informed Kohl’s she was leaving effective July 31 to take the Hudson’s Bay position, according to Kohl’s lawsuit.
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In the lawsuit, Kohl’s contended that Schalk had to wait at least one year, as per her contract, before working for a competitor in a position similar to the one she held with Kohl’s.
The decision doesn’t immediately close the case, as Mawdsley granted Kohl’s request for the delay to give the company time to decide whether or not to appeal. As a result, an agreement enforcing Schalk’s employment contract with Kohl’s remains in effect until mid-August.
In its complaint, Kohl’s contends that Schalk possesses knowledge of the retailer’s strategic plans and business initiatives. The retailer indicated in the complaint that Schalk was deeply involved in the company’s “Greatness Agenda,” a framework designed to guide future growth.
“Armed with the knowledge gained during her employment at Kohl’s, 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 Kohl’s legal team argued in a brief. “Schalk reaped tremendous benefits from her Kohl’s contract, and should not now be permitted to escape its reasonable restrictions on her post-Kohl’s employment.”
In February, Schalk shared insights with the Retail TouchPoints team detailing Kohl’s recent technology implementations, and how they were related to the company’s overall omnichannel focus. Bernard Bobber, one of Schalk’s lawyers, indicated that Hudson’s Bay Company has no interest in Kohl’s strategies.
“They’re not hiring her for any Kohl’s information,” Bobber said. “They don’t want it. They don’t need it.”
Mawdsley agreed, saying he does not consider Kohl’s and Hudson’s Bay to be competitors, based on the evidence presented and the differing target demographics of the retail chains, according to the Milwaukee Business Journal. Hudson’s Bay, based in Toronto, operates the Saks Fifth Avenue and Lord & Taylor luxury department store chains.
“If Ms. Schalk made (Hudson’s Bay’s) IT platform, etc., better, I don’t see how that harms Kohl’s,” Mawdsley said.
In the ruling, Mawdsley indicated that the highest ranking Kohl’s executives had less restrictive non-compete clauses than Schalk, even though they presumably know more confidential company information. These executives, including CEO Kevin Mansell, could work for Hudson’s Bay if they wanted to, according to Mawdsley.
Schalk had worked at Kohl’s since 2010, when she started as the SVP of Information Systems and Business Applications. Prior to her time at Kohl’s, Schalk served as the EVP of Global IT and CIO of Target.
