Iron Mountain vs. Sequedex. (Up front: news, trends & analysis).Details about the Iron Mountain/Sequedex lawsuit have been prominently featured in such media outlets as the Wall Street Journal and Boston Globe. By now, almost everyone is familiar with the points of contention, but few can say how the final outcome will affect the records storage industry. Over the past few years, Iron Mountain has purchased smaller records storage businesses, including Pierce Leahy, its largest competitor. Iron Mountain has since filed four suits against Sequedex, a competing start-up whose chief executive and other top employees once worked at Pierce Leahy. A lawsuit filed by Iron Mountain in April alleges that Pierce Leahy's top executives, who left after Iron Mountain acquired the smaller competitor in 2000, violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. non-compete agreements and breached their fiduciary duties Noun 1. fiduciary duty - the legal duty of a fiduciary to act in the best interests of the beneficiary legal duty - acts which the law requires be done or forborne by starting a competing company, Sequedex. The litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. alleges breaches of written contracts, misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any , use of trade secrets and confidential information Noun 1. confidential information - an indication of potential opportunity; "he got a tip on the stock market"; "a good lead for a job" steer, tip, wind, hint, lead , and civil conspiracy. It seeks injunctions and recovery of damages against the defendants. Iron Mountain seeks restraining orders restraining order: see injunction. against Pierce and other defendants that would bar involvement with Sequedex or the misuse of trade secrets. In the suit, Iron Mountain alleged its former president, J. Peter Pierce Peter Pierce, was born April 6, 1969 in Mountain View, CA. He began drawing before the age of six and has become an important figure in the emerging 'surf art' movement. He started surfing in Half Moon Bay and has lived and surfed in Santa Barbara, Dana Point, Morro Bay, and Hawaii. , also is involved in Sequedex. Pierce was Pierce Leahy's chief executive officer and then became Iron Mountain's president for a short time after the acquisition. At the same time, Pierce and other defendants allegedly formed Sequedex. The suit alleges that Pierce and family members provided $5 million in start-up funding for the company, in violation of non-compete agreements. Other former employees named in the suit include current Sequedex president, J. Michael Gold. The defendants deny the allegations in the suit. Sequedex has argued in counterclaims that Iron Mountain has lodged the complaints in an attempt to hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. its business. Sequedex has several storage centers under development. By contrast, Iron Mountain operates 650 centers and is expanding to store digital archives. Last year, it reported revenue of $1.17 billion, but it lost $44 million, citing heavy investment in acquisitions. John F. Kenney Jr., Iron Mountain's chief financial officer, said in an interview with the Wall Street Journal that half a dozen customers have transferred some or all of their records management to Sequedex. He said the company has "credible information from a number of sources" that Pierce is "actively involved" with Sequedex. Pierce still serves as a member of Iron Mountain's board of directors, with a year left in his term. Gold responded to the suit in a letter posted on the Sequedex Web site: "In response to our success, Iron Mountain has apparently decided that it cannot compete favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. in the marketplace and has filed a meritless lawsuit against several individuals and entities, including Sequedex and former Iron Mountain president J. Peter Pierce Sr., hoping to direct our attention and resources from our effective sales, service, and marketing efforts." Many critics, as well as the media, also have publicly questioned whether Iron Mountain truly has grounds for the lawsuit or whether it is just trying to divert di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. Sequedex's energy and resources away from the marketplace long enough to end the threat of competition. Of course, if Sequedex is found to have breached non-compete and other covenants, Iron Mountain's claims will have been justified. While the outcome of the litigation is unclear, the legal wrangling may have negative implications for the industry, as well as for other records storage companies. One thing is certain: The dispute's headlines in the mainstream press clearly indicate that records storage has moved from a "niche" market to a standard business service. |
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion