SPECIAL REPORT: Testimony from Ridder Trial, Part III -- Tony Ridder On 'Noncompetes'

By: Jennifer Saba E&P has obtained the full transcript of the trial in late June concerning Par Ridder jumping as publisher from the Pioneer Press to the Star Tribune in Minnesota. We will be carrying excerpts here for a few days. Here is the third installment (see links to first two at bottom).

The Pioneer Press alleges in the lawsuit, among other things, that Ridder violated a noncompete agreement and took sensitive financial data to the Star Tribune. At the trial, Ridder contended that his noncompete agreement had been voided by a Knight Ridder executive, Art Brisbane. His father, former Knight Ridder CEO Tony Ridder, claimed that the younger Ridder had full authority to void his own non-compete agreement.

Brisbane said in a video deposition that he did not remember giving Ridder the go-ahead and, furthermore, he said that if he did waive Par's agreement, he would have consulted other Knight Ridder senior executives, including Par's father, Tony Ridder.

During his deposition, Ridder was asked about his thoughts on noncompetes. Below are some of his responses from his video deposition introduced by Benjamin Kaminetzky, an attorney for the Star Tribune with Davis Polk & Wardwell. An "A" indicates Tony Ridder's response.


Q Were there competitive -- were there situations where Knight Ridder did have a paper that involved a direct head-to-head competitive situation?

A Yes.

Q What were those situations?

A Dallas and Fort Worth.

Q Okay.

A San Jose and San Francisco, Contra Costa and ANG, which is the Alameda Newspaper Group, Contra Costa and the San Francisco Chronicle, Bradenton and Sarasota, Miami and For Lauderdale. We have many competitive markets.

Q Are you aware of any employees in any of those markets having noncompetes agreements?

A I'm not aware of any noncompetes agreements anywhere until a few months ago.

Q So, it would surprise you if there were employees of Knight Ridder subsidiaries who had signed noncompetes agreements?

A I was surprised to learn that, yes.

Q So, after you --

A So to the best of my knowledge, I did not know that we had any noncompetes agreements anywhere in Knight Ridder, zero.

Q At any time during the period of time that you were president of the newspaper division --

A Or CEO of the company.

Q Do you think they're a good idea in competitive markets?

A I don't believe in noncompetes agreements.

Q Did you ever sign one?

A No.

Q You never asked anyone at Knight Ridder corporate to sign one?

A No.

Q And would you view noncompetes agreements, a noncompetes agreement that would prevent an employee from moving to a direct competitor to be a tool to help retain that key employee?

A I didn't know anything about noncompetes agreements, so you're asking me about something that I, I don't believe in, that I didn't even know existed, so I think it would have been unfair, it would have been unfair to the people in St. Paul to the operating committee people had they had them.

Q Why?

A Because why should they have -- why should she be restricted in a period like this after the sale of not being able to go? We're trying to keep the company together until we sell it.

Q Okay. So would it be important to restrict key employees options during that period of time prior to the sale by asking them to sign a noncompetes agreement?

A We never contemplated a noncompetes agreement for any of our people because we didn't believe in them. We believed the way to go about it was to offer financial incentives for people to stay.

Q Who's the "we" that you're referring to that didn't believe in noncompetes?

A Me, Mary Jean Connors.

Q So, do you know whether Mary Jean Connors believed it was a good idea to have employees sign noncompetes?

A I don't know. I have to believe if we thought it was a good idea that somebody would have suggested it somewhere along the line.

Q You don't recall any conversation --

A I don't remember any conversation along that line. And if somebody had, I'm sure we would have decided not to do it. Because we certainly could have done it, you know, all across the board, in Fort Worth and San Jose and all those other places. If we had wanted to, but we didn't -- as I said we didn't believe in them.

Q In your mind, would it have been appropriate during the time you were president for or CEO and chairman of the Board, appropriate for an executive level employee of a Knight Ridder subsidiary to quit their job at the Knight Ridder subsidiary and go to work for a direct competitor of that subsidiary?

A I think that on the answer of appropriate, I would say yes. Would I have been happy about it, I'd say no, but I think it's appropriate because we don't own the services of people, I mean they're not slaves of Knight Ridder, they're free to move. That's always been the case.

Q. If the noncompetes at the Pioneer Press were done locally without your knowledge, and when I mean you I mean without the corporate knowledge, could it then be waived locally without corporate knowledge or permission?

MR. CECERE: Objection; lack of foundation, calls for legal conclusion.

Q So you were the CEO at the time and the president?

A Yeah.

Q So can you answer the question?

A I think absolutely he could have done it. I think just as a matter of caution he want to Art, but he absolutely did not have to do that.

Q Didn't have to do what?

A He didn't have to get permission from corporate it was decided locally, done locally, and could have -- he had full authority to remove that, that noncompetes.

Q And is that what you meant when you testified, when you refer to the permission he got from Art Brisbane, you said, quote, "Permission was not necessary," is that what you were referring to?

A Absolutely.

Q You were referring to the fact that because it was a local --

A He did not need permission from Art, he did not need permission from Art. He could -- he could have done -- he had the full authority, as did our other publishers. If they wanted to put them in, they could have put them in. I would not have approved of it if they had, but if they had done it on their own, they had that kind of latitude; but if he they had, they certainly could take them off on their own.


The first part of the testimony can be found here.

The second part of the testimony can be found here.


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