FSI and sampling giant Valassis Communications is suing rival The Sunflower Group, alleging that Sunflower employees offered “financial and/or other inducements” to employees at Valassis’s Mexico fulfillment center in exchange for inside information on sampling clients.
Filed in February in a Michigan Circuit Court, the civil suit charges Sunflower with “misappropriation of confidential business information, unfair competition, interference with prospective business advantage, and inducement of employee breach of duty, loyalty, and trust.”
People acting on behalf of the Overland Park, KS-based Sunflower contacted employees at Valassis’s Mexicali facility to obtain the identities of sampling clients and other information, the suit alleges.
In what the suit calls one example of activity that occurred “around August 1998,” Sunflower agents received information on Livonia, MI-based Valassis’s relationship with an unnamed New Jersey client “for purposes of attempting to obtain (that client’s) business.”
“They were bribing our people to get information on jobs and on how much we were bidding,” says a source at Valassis, which had 1997 revenues of $675.5 million.
“This lawsuit is the most ridiculous claim I’ve ever heard,” counters Dennis Garberg, ceo at Sunflower, which generated $70 million in revenues last year. “They are essentially claiming that we are stealing their confidential business information and trade secrets. In reality, all they do is try to copy us in the sampling marketplace. I can’t imagine them ever having a trade secret worth stealing.”
“They are simply trying to force us to waste time and money defending ourselves against a frivolous and baseless lawsuit,” charges Garberg.
“We are not going to engage in a p.r. battle with Dennis Garberg,” Valassis ceo Alan Schultz responds. “Our complaint and the evidence speak for itself and this is a very serious matter.”
The Valassis suit asks for injunctive relief against the alleged activity and damages including a compensatory payment exceeding $25,000. As promo went to press, Sunflower said it was preparing to file a countersuit.
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