Judge says Par Ridder must leave post for a year for taking data from St. Paul Pioneer Press.
A Ramsey County judge took the extraordinary step of removing a sitting CEO on Tuesday after concluding that Star Tribune Publisher Par Ridder took confidential financial data from his former employer, the St. Paul Pioneer Press, and could not be trusted to refrain from using it to further hurt the newspaper.
In a case that paired ethics with the competitive world of newspapers, Judge David Higgs made pointed criticisms of Ridder's "cavalier" behavior, saying he violated state laws and his "common law duty of confidentiality" in taking the information from the Pioneer Press, the newspaper his family ran for 80 years. He also ordered the Minneapolis paper to pay its competitor's legal fees, estimated at $5 million.
The judge cleared Ridder and one executive he hired from the Pioneer Press of breaking noncompete clauses, saying the agreements signed by Ridder and Kevin Desmond, now the Star Tribune's senior vice president, operations, were not valid.
Higgs ruled against a second executive, Jennifer Parratt, who Ridder also hired from the Pioneer Press, saying that she violated a valid noncompete agreement when she left St. Paul to become the Star Tribune's director of niche publications. She was on the job in Minneapolis for three days in April before Higgs ordered her not to work at the Star Tribune. She left her office April 20, and the next month Higgs allowed the Star Tribune to keep paying her temporarily even though she was barred from working. Tuesday's ruling said she cannot work for the paper before next April 19. Parratt, reached at her Stillwater home, had no immediate comment.
The injunction bars Ridder from his office for one year, a move that lawyers for the Pioneer Press had argued was necessary to prevent further damage. Ridder left the Star Tribune at 8:40 a.m. Tuesday, according to Star Tribune spokesman Ben Taylor. Ridder declined to comment.
The chairman of the Star Tribune Co., Chris Harte, said he will take over as interim publisher and planned to fly from his home in Maine to report for work today. Harte was formerly publisher at newspapers in Akron, Ohio; Portland, Maine; and State College, Pa.
"Today's ruling is clearly not what we expected," Harte said in an e-mail sent to staff shortly after the ruling came out. "While we strongly disagree with this ruling, we will of course abide by the court's decision as we evaluate our legal options."
He could not immediately say whether Ridder will ever return to the newspaper or the Star Tribune will appeal.
In a telephone interview, Harte took solace in the fact that Desmond can remain at his post, saying he was "delighted" that the judge ruled that the noncompete clauses of Ridder and Desmond were invalid.
Key executive slots empty
The ruling is a significant victory for Dean Singleton, the vice chairman of MediaNews Group Inc., owner of the Pioneer Press.
"I felt the institution had been wronged, its constituents had been wronged and we needed to make things right," Singleton said Tuesday. "I felt betrayed by Par personally because I had known Par a long time. I considered him a friend."
Legal experts noted the unusual decision, saying typically employees are removed under noncompete agreements. Ridder's behavior was "pretty egregious," said Joseph Sokolowski, an employment attorney at the Minneapolis firm of Fredrikson & Byron. "There's a list of don'ts when you change jobs, and one of them is don't take anything from your employer."
The ruling leaves the Star Tribune with key executive posts vacant as the paper battles advertising and circulation declines affecting newspapers around the country. Besides the two executives Higgs ruled against, the paper's advertising director, Mike LaBonia, resigned last week and the chief financial officer, Michael Riggs, left the paper in July. Both men, who left for top jobs at other publishing companies, had been named in the lawsuit but were not part of Tuesday's ruling.
"I would say generally for any newspaper, not specifically just for the Star Tribune, it is not a good time to be without three key executives," said newspaper analyst John Morton. Morton, who served as an expert witness for the plaintiffs in the lawsuit against the Star Tribune, said the newspaper industry has seen more hemorrhaging this year as Internet advertising has fallen off the torrid growth of 30 to 40 percent it recorded as recently as last year.
Harte noted the Star Tribune is "still a strong and profitable company" despite national advertising declines in both print and broadcast media. "We have taken many steps in the past few months to strengthen the company for the future, and we have many more plans in the works," Harte said in an e-mail.
Ridder, 39, was the sixth in his family to run the Pioneer Press when he became publisher in 2004. He reported to work at the Star Tribune on March 5, three days after he notified his bosses in St. Paul that he was leaving. The departure at first seemed amicable, with Singleton saying he wished Ridder well. Within days, things changed.