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Perot, EDS Both Claim Victory In Lawsuit Ruling

April 14, 1989

DALLAS (AP) _ Billionaire H. Ross Perot may not begin any profit-making ventures with his new company before Dec. 1, but may continue to hire employees from his old, GM-purchased firm for the next 2 1/2 years, a Virginia judge ruled Thursday.

The order by Fairfax County Circuit Judge William Plummer makes permanent an earlier order in the fight between Electronic Data Systems Inc. and Perot Systems Corp. over Perot’s activities since he left the company in a dispute with General Motors Corp.

Perot and Perot Systems of Dallas ″shall refrain, prior to December 1, 1989, from soliciting, negotiating for, entering into or performing any contract or other business relationship ... that contemplates or calls for any profitable return to the defendants at any point in time, and involves the business of providing data processing or other services to customers of a nature provided by EDS as of December 1, 1986,″ Plummer ordered.

Meanwhile, Perot may continue to hire EDS employees until Dec. 1, 1991. EDS says Perot has hired 150 to 200 of its employees, eight of them executives.

Both sides claimed victory in the decision, which essentially upholds the sales agreement between GM and Perot.

″I wanted an injunction because GM never lives up to its contracts. I wanted it solved in court,″ Perot said in Dallas.

Perot previously has said that he is not engaged in any profit-making business through Perot Systems.

EDS ″got slam-dunked over and over again and we consider it to be a fantastic victory,″ said Perot attorney Mike Weinstein. ″For us it’s business as usual.″

EDS said the decision was a ″clear and unmistakable victory.″ President Les Alberthal said, ″Judge Plummer has made it clear that Perot has an obligation to live up to the terms of the agreement he signed when he left EDS. And he can’t continue to raid EDS for talent indefinitely. This is a significant victory for EDS.″

EDS said it would pursue further, unspecified legal action against former EDS employees who left the Dallas company to work for Perot Systems.

Perot called the threats ″harassment″

On Dec. 1, 1986, GM paid $700 million to buy Perot’s stock in both EDS and the automaker. Under terms of the buyout, which followed public feuds between Perot and GM Chairman Roger Smith, Perot could not compete against EDS until Dec. 1, 1989.

EDS sued Perot last fall, alleging that he violated his agreement with GM by forming Perot Systems to compete with EDS and by hiring EDS employees.

Under the ruling, employees hired by EDS after the GM purchase are bound by a non-compete clause should they go work for Perot. However, those hired before the GM purchase would not be bound by the clause, should they work for Perot, until after Dec. 1, 1991.

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