US Foods sues PFG, employees
Oct. 14, 2015
by ERica Shaffer
ROSEMONT, Ill – Richmond, Va.-based Performance Food Group (PFG) is facing allegations by US Foods that two current PFG employees conspired to steal trade secrets, court documents show. The lawsuit comes just as PFG announced the terms of its initial public offering on the New York Stock Exchange.
In a lawsuit filed in federal court in Illinois, US Foods claims Don Harris and Ira Fenton left US Foods to work for PFG and took “highly sensitive confidential and proprietary information” with them. The information in question included product pricing and margin information, US Foods claims. The company said Harris downloaded the information onto USB thumb drives from his US Foods laptop computer and e-mailed the information to a personal account shortly before resigning his sales post at US Foods, court documents state.
“Upon joining PFG, Harris and Fenton immediately embarked on a scheme to circumvent their customer non-solicitation agreements by swapping US Foods accounts for which they had responsibility with a shill employee of PFG, Josh Bernicchi — who recently joined US Foods.” Lawsuit goes on to claim that a PFG manager, Matt Tonozzi, directly facilitated the scheme to share information.
US Foods charges that Harris and Fenton told Bernicchi that they would give him accounts they had handled at US Foods valued at approximately $150,000 per week. “In the following weeks, Fenton visited more than 10 US Foods customers with Bernicchi,” court documents state.
“Fenton repeatedly told Bernicchi to keep this arrangement confidential, knowing it contravened his contractual obligation to refrain from directly or indirectly soliciting US Foods accounts on which he worked.”
US Foods said the scheme severely damaged the company, causing it to lose some customers entirely and substantial business from others. US Foods did not assign a dollar amount to the company’s losses, but court documents note that Harris oversaw sales of $40 million in his district.
Additional charges levied by US Foods against Fenton and Harris include breach of customer non-solicit and non-disclosure agreement; interference with contract; misappropriation of trade secrets in violation of the Illinois Trade Secrets Act; violation of the Computer Fraud and Abuse Act; and breach of employee non-solicitation agreement.
US Foods is seeking an injunction against Harris and Fenton; compensatory damages; reimbursement for attorneys’ fees and other costs; and the return of US Foods’ data the company says is stored on the USB drives.
In February, US Foods agreed to sell 11 of its facilities to PFG as part of a proposed merger agreement with Houston-based Sysco Corp. The Federal Trade Commission blocked the merger on concerns the deal would eliminate competition in the foodservice distribution market. PFG is the third-largest foodservice distributor in the United States.