VMware files lawsuit against Nutanix CEO Rajiv Ramaswami

VMware has filed a lawsuit against its former chief operating officer Rajiv Ramaswami after rival Nutanix appointed Rajiv Ramaswami him as president and chief executive officer earlier this month.
Rajiv Ramaswami of VMware
VMware alleged Rajiv Ramaswami breached his legal and contractual duties and obligations to the company.

The lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, VMware said on Monday.

Nutanix on Tuesday called VMware’s action nothing more than an unfounded attempt to hurt a competitor and we intend to vigorously defend this matter in court.

VMware alleged that Rajiv Ramaswami failed to honour his fiduciary and contractual obligations to the company.

“For at least two months before resigning from the company, at the same time he was working with senior leadership to shape VMware’s key strategic vision and direction, Rajiv Ramaswami also was secretly meeting with at least the CEO, CFO, and apparently the entire board of directors of Nutanix to become Nutanix’s CEO. He joined Nutanix as its CEO only two days after leaving VMware,” VMware said.

Rajiv Ramaswami joined as CEO of Nutanix on December 9.

VMware said that the company tried to resolve this matter without litigation, but Rajiv Ramaswami and Nutanix refused to engage with it in a satisfactory manner.

Rajiv Ramaswami demonstrated poor judgement and had a clear and extended period of conflict of interest. He should have disclosed this conflict of interest to VMware so that the company could have taken steps to protect itself, VMware said.

“But he did not notify VMware, and thus deprived the company of the ability to do so by concealing his Nutanix-related activities,” VMware said.

Nutanix said that VMware’s decision to bring a lawsuit against Rajiv Ramaswami was a misguided action.

VMware’s lawsuit seeks to make interviewing for a new job wrongful. “We view VMware’s misguided action as a response to losing a deeply valued and respected member of its leadership team,” the company said.

Rajiv Ramaswami and Nutanix have gone above and beyond to be proactive and cooperative with VMware throughout the transition. Nutanix and Rajiv Ramaswami assured VMware that Rajiv Ramaswami agreed with his obligation not to take or misuse confidential information, and VMware does not contend otherwise.

However, VMware requested that Rajiv Ramaswami agree to limit the ordinary performance of his job duties in a manner that would equate to an illegal non-compete covenant, and it requested that Nutanix agree not to hire candidates from VMware in a manner that Nutanix believes would be contrary to the federal antitrust laws.