The evolving department store on Monday responded to claims by Kristen Cox, a former regional executive vice president in Chicago, that Macy’s Inc. essentially forced her to sign an “unreasonable and unlawful” non-compete agreement with its own breach of contract and trade secrets lawsuit in Ohio federal court.
While Cox in April urged a New York court to declare that the non-compete she signed in 2012 as part of her executive severance agreement could not keep her from taking up a newly accepted position with Burlington Stores as its Northeast vice president, namely because it “does not serve to protect any legitimate business interest of Macy’s,” the retailer staunchly disagreed.
“As an executive vice president and regional director of stores, Ms. Cox was one of the top managers in the company and routinely was involved in high-level strategy discussions with members of Macy’s executive management team in which she helped shape the business strategies that are vital to Macy’s future success,” the company said in its complaint.
Areas of Macy’s business Cox allegedly has “extensive knowledge” about everything from hiring and training practices to internal financial information and future business plans. She also allegedly printed and took home copies of 2017 sales figures and floor-planning strategies after she had accepted a position with Burlington.
Macy’s is additionally seeking a temporary restraining order on Cox joining Burlington, where she was supposed to start June 5, arguing that doing so is a direct violation of her employment and non-compete agreements.
“If Ms. Cox is permitted to work at Burlington, she will breach her non-compete covenant and inevitably use, disclose and misappropriated Macy’s valuable trade secrets to unfairly assist Burlington to compete with Macy’s, to Macy’s direct, immediate and irreparable detriment,” the retailer said.
Macy’s also noted that the language of the non-compete signed by Cox includes an admission that she was to be “exposed” to trade secrets and confidential information and that she would not accept a position with a competitor for 24 months after exiting the company.
While Cox argued in her complaint that Macy’s and Burlington are not in direct competition, as the latter operates solely as an off-price retailer, Macy’s rejected this stance as well.
The department store noted that it often offers merchandise in store at “deep discounts” and operates Macy’s Backstage, a chain of 32 off-price stores, leaving it to “directly compete with Burlington and other off-price retailers,” according to the complaint.
As for Burlington’s role in Cox’s alleged contract breach, Macy’s claims that the retailer was fully aware of the terms of her employment and twice attempted to “persuade” Macy’s “not to enforce its contractual rights.”
In mid-April, in-house counsel for Macy’s told in-house counsel for Burlington that it intended to enforce Cox’s non-compete, and Cox’s complaint followed within days.
Counsel for Cox and a representative of Burlington could not be immediately reached for comment.
For More, See: