A dispute between quality management software provider IQS and its founder and former chairman, John Cachat, became public this week, just three weeks shy of the one-year anniversary of their parting ways.
In a statement issued today, Cachat said he was terminated Nov. 2, 2008, and did not leave the company voluntarily “to seek other opportunities,” as IQS stated yesterday in a “Fall Update” letter to its customers.
“I worked with a lot of the existing IQS customers and I do not want them to think that I cashed out and abandoned them,” Cachat said in his statement. “This was not my idea. I was terminated.” He listed Eaton Corp., Parker Hannifin, Shiloh Corp., ABB, Alcoa, and others as customers he had been personally involved with over his 20-year history with IQS.
In addition, Cachat said he filed a lawsuit against IQS and the IQS board on April 10, 2009, claiming breach of contract and breach of fiduciary duties, among other things. An amended complaint citing Apex Venture Partners, a Chicago-based venture capital fund, is now pending with the court, he said. Apex provides funding to privately run IQS, and two Apex general partners, Wayne Boulais and George Middlemas, are IQS board members, according to IQS’ website.
Cachat’s attorney, Robert P. DeMarco, said in an interview with Managing Automation that IQS is “contesting our charges with a counterclaim that is false.”
Robert Radasevich, of the law firm of Neal, Gerber & Eisenberg in Chicago and counsel to IQS, told MA that Cachat “wasn’t terminated” and has no claim on file against Apex. He would not comment further because the matter is in court. IQS CEO Michael Rapaport did not return calls by press time, and Boulais referred inquiries to Radasevich.
A copy of IQS’ letter to customers furnished by Cachat states, “As you may know, John Cachat, former chairman, left IQS to seek other opportunities. A new management team has repurposed IQS.” The letter, apparently signed by Rapaport, describes today’s IQS as a “fresher, more contemporary company that has implemented strategies to address customer and market requirements.” It mentions launches of Problem Solver software, an On-Demand hosted solution, and web-based training.
Cachat’s press release was a way for him to “defend himself” without going directly to customers, which would violate a yearlong restriction imposed on him by IQS, attorney DeMarco explained. “I wanted John to emphasize that he didn’t leave, but was fired.”
Cachat said today that he had wrangled with IQS management over issues involving core business processes. “IQS was based on core values of trust, integrity, and respect,” he told MA. “I had strong beliefs about the corporate culture — the way employees were treated, the way the company treated its customers.”
Meanwhile, Cachat plans to announce a new consulting and technology business on Nov. 3, the day after the IQS restrictions expire. He said he has spent the past year exploring the market and talking with businesses about what they need. He said he has pinpointed a need for tools that automate basic business processes. “People asked, for example, ‘Can you automate my travel reports?’ If you give them a Web form and a robust workflow, people will smile,” he said.