Amazon Sues Star Exec Who Is Defecting to Target
The online retailer says a non-compete clause prevents the executive from joining Target this month.Amazon.com AMZN 1.18% is not amused.
Last month, Target TGT -0.50% said it was hiring a star supply chain and logistics executive away from the online retailer as it looks to address its out-of-stock problems.
This week, Amazon sued the executive, Arthur Valdez, to stop him from starting his new job with the discount retailer, claiming a non-compete agreement he signed precludes him from working for any direct rival for 18 months.
Amazon claimed in its lawsuit, which it filed on Monday in Washington Superior Court in its hometown of Seattle, that Valdez shared information with Target he wasn’t supposed to, violating a contract he signed with Amazon in 2012. What’s more, Amazon claimed he would be armed with confidential information about the company as he goes about working for what it called a “key” competitor. The online store said that Valdez shared with his future bosses information on how Amazon handles orders and logistics during the peak holiday season.
“Mr. Valdez cannot lead Target’s supply chain operations without referencing confidential information learned and developed by him at Amazon,” the company said in its suit, which does not name Target. Amazon is also asking the court to make Valdez pay its legal fees.
Valdez’s hiring was announced in February, when Target said the 16-year Amazon veteran would head its supply chain and logistics to better integrate its stores with its fast-growing e-commerce operations. Barring the court stopping him, the executive is set to begin his new job on March 28.
Target announced its hiring of Valdez just as its e-commerce growth continued to surge during the holidays and the retailer made progress in avoiding out-of-stocks. Last September, Target said its tech infrastructure was outdated and not sophisticated enough to adequately help 1,800 stores fill online orders.
Earlier this month, at its annual meeting with Wall Street analysts in New York, Target said it would simplify its operations, for example by shrinking the variety of sizes, flavors, and even brands on store shelves. Running out of products on shelves has long been a bête noire for Target.
As for the Valdez suit, Target said it has taken pains to make sure its new hire doesn’t share Amazon secrets when he starts his new job.
“We have taken significant precautions to ensure that any proprietary information remains confidential and we believe this suit is without merit,” Target told Fortune in an e-mailed statement.