J. Crew Sues Design Director over Trade Secrets
Apparently, not everyone can keep a secret. Just ask J. Crew Group Inc. (“J. Crew”). On Thursday, J. Crew sued one of its former employees, a top designer, because it believed the designer took trade secrets and a multitude of other confidential business information to use at his new job with his new company. J. Crew alleges misappropriation, breach of duty of confidentiality, and unfair competition.
The designer’s name is Dwight Fenton and he served as a senior design director at J. Crew in its men’s design division. On January 15, 2013, he resigned from his position at J. Crew to join Bonobos, which is a “rival men’s apparel company with a ‘similar aesthetic to J. Crew.’” Approximately a week after his announcement, J. Crew performed an “inventory and review of Fenton’s last 30 days of emails from his work computer.”
Through this inventory and review, J. Crew discovered that Fenton sent many “highly confidential and proprietary J. Crew documents to his personal email address,” which is a violation of company policy.
In his position at J. Crew, Fenton had access to extremely valuable proprietary business information. Due to the confidential nature of the information, Fenton agreed to use the information for his job duties, and to “keep it confidential in the event he left the company.” J. Crew alleges that Fenton did not adhere to latter part of the agreement because he forwarded emails containing confidential information two days before he left the company.
In all, Fenton sent himself “product design specifications and measurements, J. Crew’s 2013 production development calendar; contact information for J. Crew’s key manufacturing resources; its men’s design year-end financials, men’s design budgets and men’s presentation samples budgets; lists of third-party collaborating brands; and design inspirations.” J. Crew is concerned that Fenton will use the information with Bonobos to compete unfairly with J. Crew.
The scorned specialty retailer seeks injunctive relief to safeguard it from Fenton’s commercial piracy and compensatory and punitive damages for about $650,000 with a temporary restraining order. J. Crew believes that it is only a matter of time, if it has not been done, until Fenton uses J. Crew’s trade secrets to benefit Bonobos. The company asserts that it met the standard for a preliminary injunctive and that it has established that Fenton violated both J. Crew’s confidentiality policies and his “common law obligations under New York Law by misappropriating the confidential and proprietary information.”
Additionally, J. Crew argues that if it is not granted a preliminary injunction, it will suffer irreparable harm because Bonobos will be allowed to mimic J. Crew’s products in less and time and for less money and “replicate its manufacturing efficiencies, costs, and processes.”
What are your thoughts?