Amazon (NASDAQ:AMZN) is suing to enforce a noncompete agreement in a move that helps illustrate the growing importance that operations and systems play within retail.
Target appointed Arthur Valdez to head its supply chain and logistics network beginning next week.
But Valdez spent the last 16 years inside Amazon's logistics department, and the online retailer has accused him of sharing proprietary information with Target during the interview process—including information about holiday sales and an analysis of Amazon's competition against Target, according to the suit.
Amazon wants to keep him from working for Target, or presumably any retailer, until September 2017, per the noncompete clause in his contract.
Valdez "cannot lead Target's supply chain operations without referencing confidential information learned and developed by him at Amazon to drive superior performance in exactly the same areas," claims Amazon.
"We have taken significant precautions to ensure that any proprietary information remains confidential and we believe this suit is without merit. However, as this is pending litigation, we are not going to comment further at this time," Target spokeswoman Molly Snyder told the Seattle Times in an email.
Noncompete clauses have always existed but have been difficult to enforce. For the most part, companies just shrugged and looked the other way.
Not so today, where technology rules and inside information about a company's infrastructure is the competitive advantage. When Kohl's sued its former head of IT Janet Schalk, it marked a shift and put CIOs and digital officers at the top of retail's list of most important executives.
Amazon could win this case. While Kohl's was unsuccessful at keeping Schalk from joining Hudson's Bay, Walmart won a similar suit in 2010 and blocked a former executive from joining CVS.
-See this Reuters story
-See this Seattle Times article
-See this Chain Store Age story
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