By: Emily Balzano
In a recent complaint filed in New York state court, Cartier maintains that Tiffany & Co. (“Tiffany”), is guilty of trade secret misappropriation and breach of contract. The complaint alleges that the defendant, former Cartier employee Megan Marino, was “lured” from her role at Cartier to share confidential company information with Tiffany. Cartier believes that Marino was hired in an attempt by Tiffany to “revive” its own high-end jewelry line, seeing as Marino was hired to work specifically on Tiffany’s “high jewelry” collection, where pieces typically cost $50,000 to $10 million.
According to Cartier’s complaint, Marino brought along with her job move, “very sensitive and valuable” internal company documents such as “pricing information and detailed product distribution strategies,” among many more highly sensitive and private information documents. Marino was an Assistant Manager for Jewelry Merchandising, so she had access to all of this sensitive information. Given the claims “proprietary and confidential nature” of the information shared, Cartier claims this was a “trade secret-protected asset.” Tiffany maintains that Cartier’s claims are “baseless allegations.”
Interestingly, Marino was not subject to a non-compete agreement, however, she was subject to non-disclosure and non-solicitation agreements that she had signed as a part of her employment contract with Cartier, which is where the breach of contract claim comes into play.
While employed with Tiffany, Marino’s bosses asked her to gather information about potential Cartier price increases by contacting current Cartier employees. Since Tiffany’s management directly asked for “highly valuable and confidential information that would foster unfair competition,” Cartier claims the unlawful taking of trade secrets. In an affidavit, Marino stated that Tiffany was “more interested in hiring me as a source of information than as a high jewelry manager.” Marino was also offered a salary “about 30% higher than my salary with Cartier, a sign on bonus, and a discretionary bonus opportunity, among other things.”
In summary, Cartier brings claims of breach of contract and breach of loyalty against Marino, unfair competition and tortious interference with business relations against Tiffany, and trade secret misappropriation against both Tiffany and Marino. Cartier is seeking a preliminary and permanent injunction to require both Tiffany and Marino to refrain from using the alleged misappropriated information and return such information to Cartier, as well as compensatory damages.
In order to succeed on its trade secret claim, Cartier must show that: (1) the information at issue is, in fact, valuable business information–and that they have kept that information secret; (2) the information is not generally known; and (3) Tiffany used the “secret” information that is not generally known to a company’s competitors and that provides the holder with a competitive advantage. Tiffany may attempt to argue that the information is not in fact proprietary and that Cartier did not do enough to keep the information a secret.
Regarding the first element, Cartier can show it has attempted to keep this information secret by only sharing these business plans with executives within the company. This will show that the information has been secret and is valuable to the company. For the second element, Cartier may prove the secret information is not generally known by providing evidence of who was privy to its business strategy and plan. Finally, Cartier may prove the third element by explaining how competitive the luxury jewelry market is, and how knowing its future business strategy would allow Tiffany to gain an unfair market advantage over Cartier, through its use of this “secret” information.
Interestingly, this is not the first time Cartier has accused Tiffany of improper behavior. In 2014, Cartier sued a former advertising executive who moved to Tiffany, allegedly bringing along confidential information. Unfortunately, the matter was settled, and the details are not disclosed publicly, which could show signs of a willingness for settlement in this current suit. However, because a parallel lawsuit has already arisen between the two companies, Cartier may be even more motivated to hold Tiffany accountable this time, which could lead to long and complex litigation. Whatever the outcome, it will certainly be interesting to keep a close eye on.
This case provides difficulty, as any trade secret case, because it is hard for the courts to monetize the trade-secret information. Therefore, the courts are given much discretion when awarding damages, which makes the outcome of this case quite uncertain.
Student Bio: Emily Balzano is a second-year law student at Suffolk University Law School. She is a staffer on the Journal of High Technology Law and a member of the Business Law Association and the Women’s Law Association. Emily received a Bachelor of Science in Business Administration with a dual-major degree in Finance and Operations and Supply Chain from the University of South Carolina.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
