New York-based Macy's Inc. has begun a lawsuit against its competitor, Burlington Stores, Inc., to prevent one of its former vice-presidents from working for Burlington. The complaint alleges that Burlington hired one of Macy's key executives to obtain access to its trade secrets and proprietary and confidential information. The executive has counter-sued Macy's to obtain a declaratory judgment that her employment contract with Macy's does not prevent her from working in her new position with Burlington.
The Macy's employee, who served as executive vice president and regional director of stores in Macy's north central region, resigned in April to accept a position at Burlington as senior vice president of stores. Macy's alleges that the former executive was bound by a contract that contained non-compete, non-solicitation and non-disclosure provisions and that the position at Burlington will require her to violate these clauses. The complaint also alleges that Macy's informed both Burlington and the vice-president that it would enforce the terms of these agreements.
Macy's has also alleged that the former vice-president took with her copies of documents relating to floor-planning strategies, financial reports, product and brand trends and analyses of Macy's business strategies. Macy's filed its complaint in federal court in Ohio, but the new Burlington vice-president filed a complaint in New York City seeking a declaratory judgment that her Macy's contract is invalid and does not prevent her from taking her new position at Burlington.
This dispute is not likely to be rapidly resolved. Discovery could take months, and a trial could last several weeks. The complexity of business disputes involving trade secrets and non-disclosure and non-compete agreements can rapidly become very expensive. Anyone who may be subject to a restrictive employment contract and who is considering changing employers may wish to consult an experienced business lawyer for an analysis of the employment contract and a review of legal strategies that could be employed to obtain a favorable outcome.
Source: Law 360, "Macy's Sues Burlington, Ex-Exec. Over Trade Secrets," Christine Powell, June 6, 2017