Qwest Sues Intelispan over Sales-Force Defection

Qwest Communications International Inc. has sued an emerging provider of secure IP remote-access services over a recent wholesale defection of employees from Qwest's Southeast regional sales headquarters.

The suit, filed earlier this week, alleges that an Alpharetta, Georgia, service provider called Intelispan illegally solicited and hired 17 of Qwest's sales executives and related personnel. Intelispan officials confirm that all 17 people left Qwest en masse on April 17 to go to Intelispan.

Qwest charges that the employees in question had contracts, and that the defection breached their fiduciary responsibility and potentially violates agreed-upon non-compete clauses. Four of the 17 are named as co-defendants along with Intelispan.

Intelispan president and CEO Lee Provow said Thursday that the suit is "without merit" and "frivolous." Provow claimed that Intelispan is not a competitor of Qwest because it strictly sells the remote-access links of IP virtual private networks, while Qwest has concentrated on private lines, frame relay, Web hosting and voice services.

However, Provow pointed out that Qwest announced a VPN service this week at the NetWorld+Interop 2000 show in Las Vegas, soon before the lawsuit was served on Intelispan.

Regardless of the outcome of the lawsuit, the defection in the Southeast region is a blow for Qwest, which has had its struggles with employee turnover. Qwest has scored some of its biggest enterprise sales in the Southeast, including marquee names such as cable giant Cox Communications, Delta Airlines, truck-leasing leader Rollins, and several financial institutions.

At the N+I show, Qwest national sales vice president Shawn Gilmore said the Atlanta situation was exceptional, claiming that a disagreement over compensation issues led the head of the sales office to round up his subordinates for a defection in an attempt to gain leverage over Qwest.

However, it is known that Qwest sales personnel in both the Atlanta office and others have been upset over what they see as Qwest's frequent inability to provision user circuits within agreed-upon time frames. Not only have some of them apparently felt the brunt of user frustration over delayed circuits, but throughout the telecom industry sales reps receive a substantial part of their compensation only after the circuits they have sold are actually installed.

Gilmore acknowledged, as other Qwest executives did late last year, that Qwest has periodically had difficulty installing circuits on time. "Sometimes the processes don't keep pace with the front-end demand," said Gilmore. But he added that part of the problem was a backlog in obtaining optical equipment from suppliers, and he stressed that the provisioning situation is much improved now.

Intelispan is expected to file its response to the Qwest lawsuit, filed in Atlanta's Fulton County Superior Court, in about 30 days.

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