Restoration Hardware Holdings, Inc (NYSE:RH) has filed a lawsuit against Crate & Barrel due to alleged theft of trade secrets.
The company claims that Crate & Barrel took “a page from the successful RH playbook” that would help it introduce coffee and wine offerings in its stores. These were allegedly taken from Restoration Hardware’s Chicago Gold Coast gallery, which opened in 2015.
Former company executives Douglas Diemoz and Kimberly Ahlheim were named as defendants in the lawsuit. Diemoz moved from Restoration Hardware to Crate & Barrel — where he now serves as CEO — and the former claims he played a large part in helping to open the Chicago Gold Coast gallery.
The Three Arts Club Cafe in the Restoration Hardware Chicago flagship store came with certain stipulations for those involved. Diemoz signed an agreement with the promise that he wouldn’t use the company’s proprietary information or recruit employees for at least a year.
The lawsuit claims that Ahlheim did in fact use confidential information regarding his former company’s financial reports surrounding its food and beverage practices. Additionally, it claims that Diemoz recruited Ahlheim soon after leaving instead of waiting the year that was required, according to the agreement mentioned in the suit.
The suit is asking the court to prevent Crate & Barrel from offering food and beverage services in any of its stores for a year.
RH shares fell 2.2% Wednesday.
