L’Oréal has succeeded in keeping a former high-level executive from starting work at rival Shiseido — for the time being.
After arguing earlier this week that Antonios Spiliotopoulos, L’Oréal’s former senior vice president of consumer products for the Americas, taking an executive position with Shiseido posed a threat to confidential business information, a local New York court barred Spiliotopoulos from starting his new position.
A L’Oréal spokeswoman said the ruling came down Thursday afternoon, when a judge agreed to enforce the terms of Spiliotopoulos’ non-compete agreement with the French beauty conglomerate.
“We are pleased that the judge recognized the importance of protecting our confidential and strategic information about our market-leading innovations,” the spokeswoman added.
But the ruling is only a preliminary injunction, meaning Spiliotopoulos cannot take up his new role with Shiseido while the case is pending. He is not permanently being kept from starting work for the rival company.
A Shiseido spokeswoman declined to comment, citing a company policy around ongoing litigation.
L’Oréal launched the lawsuit on Tuesday, pointing out that Spiliotopoulos in 2006 signed a non-compete agreement — a widely used clause in employment contracts that bars an employee from decamping to a rival for a certain period of time — requiring a six-month gap between leaving L’Oréal and starting a new job.
While Spiliotopoulos’ six months will be up in mid-December, he started work with Shiseido last week, after L’Oréal refused his request for an early release from the non-compete.
L’Oréal’s main problem lies with Spiliotopoulos’ allegedly wide-ranging and detailed knowledge of confidential and proprietary information surrounding L’Oréal’s development of “personalized” cosmetics.
Guive Balooch, L’Oréal’s global vice president, said in a court filing that Spiliotopoulos had been working on personalized products for the company’s luxury division, like Lancôme’s Le Teint Particuler foundation, currently sold at a small number of Lancôme’s Nordstrom counters.
Balooch said the foundation is a “proprietary device” making use of patented technology to detect individual skin tones and then instantly create a customized foundation blend, and Spiliotopoulos had been specifically tasked with tasked with solving some problems with the LTP system that needed to be overcome for L’Oréal to have a “profitable product expansion for our brand.”
Balooch argued that the information Spiliotopoulos had access to during his recent work with L’Oréal, where he started in 1994 as a quality manager, “would be invaluable to Shiseido, which is a major competitor in the race to conquer the customized cosmetics market.”
How to compete against Shiseido’s new Color Match program offered through its BareMinerals brand was allegedly a specific topic of conversation between Balooch and Spiliotopoulos.
“It would be folly to think that Shiseido is not also working on in-store solutions as well as other online innovations, and that the knowledge possessed by Spiliotopoulos will be highly useful to Shiseido in that regard,” Balooch added. “Whichever company can take the lead in the marketing of customizable skin care products will develop an enormous commercial advantage.”
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