Wal-Mart Settles With Amazon.Com -- Dispute Was Over Hiring Away Retail Giant's Tech Workers

Retailing giant Wal-Mart today announced a settlement with local online companies Amazon.com and drugstore.com over the companies' recruitment of former Wal-Mart employees.

Under the agreement, Seattle-based Amazon.com will reassign duties of one unidentified Amazon.com information-systems worker who had worked for Wal-Mart.

Redmond-based drugstore.com will not reassign any employees, said drugstore.com spokeswoman Debby Fry Wilson.

The employees are limited from working in three key areas of data warehousing, merchandising systems and distribution, according to Wal-Mart.

Wal-Mart, based in Arkansas, contended in its suit that the two Internet commerce companies had raided its employee base to steal Wal-Mart's trade secrets in its computerized systems and business processes. The suit was first filed in Arkansas last October and refiled in Seattle in January.

The suit also named as defendants the two companies' Silicon Valley financier and Amazon.com Chief Information Officer Richard Dalzell, formerly Wal-Mart's vice president of applications development.

Dalzell is unaffected and will keep his post, said Amazon.com spokesman Bill Curry. Neither side admits wrongdoing or pays damages, Curry said. "We can turn our attention back to customers, avoid the cost of litigation and put this in the rear-view mirror," he said.

Both Amazon.com and drugstore.com may continue to hire employees from Wal-Mart but may not actively solicit them. In

addition to Dalzell, Amazon.com employs six former Wal-Mart employees in its technical department. Drugstore.com employs three former workers in that area.

Although both Internet commerce companies described the restrictions as narrow, Wal-Mart said the undisclosed terms will protect its proprietary data.

The agreement also resolves a countersuit that Amazon.com had filed against Wal-Mart for slander.

The news gave the stock of both companies a boost. Amazon.com was up $15.75 to $186.75 at today's close. Wal-Mart stock rose $2.125 to $95.375.

Drugstore.com is privately held. Amazon.com bought a 46 percent stake in the company in February.