Incoming SNC Lavalin Inc. Robert Card will not be arriving with a team from his former employer to turn around the beleaguered Montreal construction and engineering giant.
Mr. Card’s former employer and SNC rival CH2M Hill Companies Ltd. agreed last week to let its senior vice-president out of a non-compete contract he signed in 2010 to allow him to take the job with its Montreal-based rival.
However, in exchange, he signed a voluntary release with Denver-based CH2M in which he agreed not to recruit any former co-workers to join him at SNC for 24 months and said he knew of no other CH2M executive who is in talks to join SNC. Furthermore, he agreed “to cause his future employer not to hire any senior person” employed by CH2M for two years, although U.S. employment lawyers contacted by The Globe and Mail questioned whether that clause could be enforced.
He also agreed not to interfere in any of his former employer’s customer relationships, nor to lead a hostile takeover of employee-owned CH2M.
Sources familiar with Mr. Card’s hiring at SNC describe him as a “change agent” who has a mandate to thoroughly review the firm and determine which countries and businesses SNC should focus on, and which it should exit. But “coming in to rebuild a company that’s had problems can be a daunting task,” said Diane Smith, an employment lawyer in Englewood, Colo., who reviewed the agreement. “Doing it without a management team you’re used to can make it very difficult.”
National Bank Financial analyst Trevor Johnson said Mr. Card’s separation agreement shouldn’t tie his hands at SNC, which derives just 3 per cent of its revenues from CH2M’s home market of the U.S. – compared to 75 per cent for CH2M. The two compete in Canada and internationally, but the agreement doesn’t preclude SNC under Mr. Card from bidding for new business from CH2M clients in open tenders.
“SNC’s footprint is big enough that he’ll be able to do what needs to be done,” Mr. Johnson said. “Getting new work isn’t SNC’s challenge.”