Smelkinson Sysco sues Alliant, alleges theft of trade secrets $6.01 million sought for what it contends is unfair competition


Smelkinson Sysco Food Services, a Jessup food service company, filed a $6.01 million lawsuit yesterday in U.S. District Court in Baltimore against a competitor and six former employees, alleging unfair competition and theft of secret trade information.

The suit alleges that Alliant Foodservice Inc., a Deerfield, Ill.-based company that has a local office within two miles of Smelkinson's Jessup operation, has systematically attempted since November 1995 to use Smelkinson's confidential information and trade secrets, hire its employees and pirate its customers.

In addition to damages, Smelkinson seeks a restraining order to force Alliant to stop stealing trade secrets, to return any information it received and to stop any unfair competitive practices.

Cathy Anderson, executive vice president and general counsel of Alliant Foodservice, said she had not seen the lawsuit and would not comment on it. Toni Spigelmyer, director of corporate communications for Houston, Texas-based Sysco Corp., the parent corporation of Smelkinson, also declined to comment.

The suit says six marketing associates at Smelkinson were recruited to work at Alliant. They allegedly began selling Alliant's food service products and services in the same areas in which they worked for Smelkinson, despite a noncompetition agreement they had signed, agreeing not to work for a competitor for nine months after leaving the company.

After they went to work for Alliant, those former employees continued to access Smelkinson's confidential voice mail system, through which its customers made inquiries and submitted orders to its sales force, the lawsuit claimed. The voice mail system also was used by Smelkinson employees to exchange confidential information within the company, including pricing, cost and inventory availability of merchandise, sales updates and merchandising strategy.

The suit alleges that the former employees "have continued to access Smelkinson's confidential voice mail system, making telephone calls from their residences, at all hours of the day and night, on weekdays and weekends. They have continued to make these telephone calls for months after their employment with Smelkinson ceased."

Between November 1995 and October 1996, the former employees and other Alliant employees called the voice mail system 601 times, the lawsuit alleged. When Smelkinson learned that the former employees were calling its voice mail system, company officials asked Alliant officials to stop the activity. Alliant took no action, the suit said.

"Smelkinson believes that these wrongful actions are being performed with the knowledge and encouragement of Alliant," the lawsuit said.

Smelkinson alleges that, by intercepting its voice mail messages, the former employees violated the federal Electronic Communications Privacy Act of 1986, which provides for damages of $10,000 per occurrence. Because Smelkinson alleges the Alliant employees intercepted its voice mail messages 601 times, it requested $6,010,000 in damages in the suit.

"Over the past year, Smelkinson has estimated that it has lost at least several million dollars of sales" as the result of Alliant's alleged use of its competitor's confidential information, the suit said.

Pub Date: 12/04/96

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