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Bally hit with suit on hiring of CEO

By Ameet Sachdev Bally Total Fitness Holding Corp.'s recent hiring of its chief executive has touched off a lawsuit from a competitor over the possible misappropriation of trade secrets. Michael Sheehan joined the Chicago-based gym operator as CEO on July 1, after nearly eight years at 24 Hour Fitness USA Inc., where he was most recently chief operating officer. 24 Hour Fitness, based in San Ramon, Calif., operates more than 400 clubs that offer low-cost memberships similar to Bally's. 24 Hour Fitness claims that Sheehan's new position would inevitably lead him to rely on his previous employer's trade secrets, according to its complaint filed July 7 in federal court in Chicago. In his previous position Sheehan, 46, had knowledge of the company's confidential growth plans, marketing strategies and financial data, the suit said. "As CEO of Defendant Bally, a direct, head-to-head competitor of 24 Hour Fitness, Defendant Sheehan cannot 'unring the bell,' as he will be charged with executive responsibilities for the same areas that he worked in as COO of 24 Hour Fitness, " it said.

Full post as published by The Trade Secrets Vault on July 14, 2008 (boomark / email).