CVS Caremark Corp. has been temporarily blocked from hiring former Walmart executive Hank Mullany as president of CVS/pharmacy.

CVS Caremark, Walmart, Hank Mullany, CVS/pharmacy, CVS/pharmacy president, Larry Merlo, Tom Ryan, pharmacy, discount store, drug store, Russell Redman, injunction, temporary restraining order, Delaware Court of Chancery, noncompete agreement

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Injunction blocks CVS from hiring ex-Walmart exec

December 6th, 2010

NEW YORK – CVS Caremark Corp. has been temporarily blocked from hiring former Walmart executive Hank Mullany as president of CVS/pharmacy.

Walmart late Friday obtained a temporary restraining order from the Delaware Court of Chancery to bar CVS Caremark from hiring Mullany, who mostly recently served as the president of the discount store giant's northern U.S. division.

The injunction prevents Mullany from joining CVS Caremark until after a Dec. 15 court hearing on the matter, a CVS spokesman confirmed.

The drug store chain announced the hiring of the 52-year-old Mullany on Friday afternoon, and news of Walmart's lawsuit to halt the move emerged shortly thereafter. Mullany was slated to start as CVS/pharmacy president on Dec. 6.

"While we are disappointed in the court's decision delaying the start of Hank Mullany's employment with CVS/pharmacy, we firmly believe the allegations in the lawsuit are without merit, and we look forward to the opportunity to present our case to the court," CVS Caremark said in a statement.

Walmart claims in its suit against CVS Caremark that the hiring would violate a noncompete agreement because of Mullany's knowledge of confidential Walmart information. The agreement reportedly precluded Mullany from working for a competitor for two years after leaving Walmart. The two companies compete in the pharmacy, health care and retailing sectors.

Mullany, who joined Walmart in 2006, was executive vice president at the Bentonville, Ark.-based retailer and president of the Walmart North unit, with responsibility for 1,300 stores across 19 states. He left the company in early November after resigning the previous month, according to published reports.

Plans called for Mullany to take over the CVS/pharmacy president role from CVS Caremark president and chief operating officer Larry Merlo. As part of a corporate succession plan unveiled last May, Merlo was named CVS Caremark president and COO and tabbed to succeed Tom Ryan as chief executive officer of the company. Ryan plans to retire from as CEO before the next annual meeting.

CVS Caremark is the nation's No. 2 pharmacy operator by dollar volume, at about $38 billion, and pharmacy count, with more than 7,100 drug stores, according to the 2010 Annual Report of Retail Pharmacy by Chain Drug Review. Walmart is the No. 3 operator by pharmacy dollar volume, estimated at roughly $21 billion, and is No. 4 in terms of pharmacy count, with over 4,200 pharmacies.