It appears unlikely that Hank Mullany will join CVS/pharmacy.

CVS, CVS/pharmacy, Hank Mullany, CVS Caremark, Walmart, CVS/pharmacy president, Larry Merlo, drug chain, Travis Laster, Delaware Chancery Court, injunction, Walmart North, pharmacy, Jeffrey Woldt, Russell Redman

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CVS eyes options following Mullany ruling

January 3rd, 2011

WOONSOCKET, R.I. – It appears unlikely that Hank Mullany will join CVS/pharmacy.

In the wake of a decision by a Delaware judge to prevent, at least temporarily, the former Walmart executive from becoming president of the drug chain, sources close to parent company CVS Caremark Corp. indicate that it is making plans to put the issue behind it and move on.

Without commenting directly on CVS’ intentions, a spokeswoman said, “We are disappointed with the court’s decision and are fully evaluating all of our options. In the interim, Larry Merlo, president and chief operating officer of CVS Caremark, will continue to be responsible for CVS/pharmacy retail operations, supported by his seasoned senior leadership team.”

On December 15 Judge Travis Laster of Delaware Chancery Court granted Walmart’s request for a preliminary injunction to bar Mullany from being hired by CVS after a hearing on the matter. A trial is scheduled to begin in March.

In its lawsuit Walmart claims Mullany’s move to CVS would violate a noncompete agreement because of his knowledge of confidential information about the discounter’s current operations and future plans.

Mullany, who joined Walmart in 2006, was an executive vice president at the Bentonville, Ark.-based company and president of the Walmart North division, with responsibility for 1,300 stores in 19 states.

CVS and Walmart both operate pharmacy businesses that are among the nation’s three largest, and both sell the full range of traditional front-end “drug store” merchandise.

For CVS, the ongoing legal dispute creates the prospect of leaving a critical management post without a full-time occupant for an extended period. The start of the trial is several months away, and whatever decision the court reaches could well be appealed.

Merlo had held the post of CVS/pharmacy president until last May when, as part of a corporate succession plan, he was named president and chief operating officer of CVS Caremark. At the same time, he was designated to succeed Tom Ryan as chief executive officer of the corporation when Ryan steps down from that role this year.

CVS Caremark announced the appointment of Mullany to head its retail operations on December 3 and indicated he would start the job several days later. However, just hours after the CVS announcement of Mullany’s hiring, Walmart obtained a temporary restraining order from the Delaware Court of Chancery.

The 52-year-old Mullany has nearly 30 years of retail experience and a strong background in operations, finance and strategic planning.

Earlier in his career he held various senior management positions, including president of Genuardi’s Family Markets in Pennsylvania.

At the time of his hiring CVS executives said Mullany’s background made him the right person to head CVS/pharmacy.

“His broad base of retail experience will further our mission to provide customers with expert care and innovative solutions,” Ryan said. “His proven track record as a leader will continue to set us apart in today’s competitive marketplace.”