Amazon.com, Inc. (NASDAQ:AMZN) is a stickler for details and terms. This fastidious nature is why the online retailer has filed a lawsuit against a former star supply chain and logistics executive who defected to Target Corporation (NYSE:TGT) this year.
Amazon.com, Inc. Sues Former Star Executive
Amazon is making legal news this week after it was found the retailer has sued former employee, Arthur Valdez. The ecommerce titan alleges that Valdez violated a non-competition agreement that he signed during his tenure with the company. It says the former supply chain and logistics head had revealed trade secrets.
As part of the terms of his contract he signed in 1999, Valdez agreed to not work with firms that compete against Amazon for 18 months after his departure. The firm believes working with the retailer would be breaching that non-compete clause. The website notes that Valdez had access to private data that may prove valuable to competitors.
In a lawsuit statement, Amazon alleged that Valdez revealed info during an interview with Target’s senior executives. The firm says he referred to core aspects of Amazon’s business, training, expertise, analysis and strategy of Amazon meetings. It’s also asking that Valdez pay for its legal fees.
A spokesperson for Target notes that the firm has “taken significant precautions” to ensure any Amazon information remains confidential. Molly Snider added that the lawsuit does not have any merit.
It is unknown exactly when Valdez had departed Amazon. Target announced in February that it had hired Valdez to assist in its ecommerce growth, which surged during the holiday season. The retailer revealed last year that its tech infrastructure was out of date and inefficient in filling in orders to its 1,800 stores. The details of the lawsuit show that the former president of operations at Amazon would begin his tenure at Target on Mar. 28.
Amazon has been actively involved in the world of lawsuits. For years now, the website is either a defendant or a complainant. One of its most recent lawsuits consists of a decision as to whether or not delivery workers are considered employees. Another recent lawsuit involves fake online reviews.
Is Amazon.com, Inc. Big Enough in Staples-Office Depot Deal?
Amazon learned from a federal judge Tuesday that it isn’t big enough to compete with two retail giants. A judge found that Amazon can’t compete with Staples Inc (NASDAQ:SPLS) or Office Depot Inc (NASDAQ:ODP), or a potential merger between the office supply firms. The judge is currently deciding whether or not put forward an injunction against Staples’s attempt to buy Office Depot.
Last year, the Federal Trade Commission (FTC) filed a lawsuit to stop the merger. The regulatory body said such a merger would have too much market share. The FTC said this would lead to price hikes down the road. However, Staples made the case that there is a lot of competition in the market already, and Amazon is one of them.
What’s interesting about this case is that Prentis Wilson, vice president of Amazon Business, had to highlight the website’s weaknesses and how both Staples and Office Depot offered more services than Amazon. Usually, executives just rave about their firms, but not in this instance.
This comes as it was reported Amazon may buy the corporate unit of Office Depot.
Both Office Depot and Staples used to be massive players in the office supplies market. Unfortunately for both firms, they were unable to innovate and instead have remained stagnant. This lack of change or growth is reflected in their stock prices. Many firms offer the same products for cheaper, like the dollar store. Perhaps a merger would spice things up.
Year-to-date, Staples shared have hovered around the $10 mark. Office Depot has seen its shares year-to-date stay around $6. Amazon shares have dropped 15 percent year-to-date. It remains to be seen if any acquisitions or mergers happen.