Dole claims Ready Pac stole its employees
Dole claims Ready Pac stole its employees
Dole Fresh Vegetables Inc. has sued its competitor Ready Pac Produce Inc. for engaging in "unfair competition" because three top Dole employees have joined former Dole COO Larry Kern at Ready Pac in the last few months.
The suit was filed in Monterey Superior Court June 18 and alleges that Ready Pac has engaged and continues to engage in unfair competition. The suit names three employees that left Dole between March and June and now work for Ready Pac.
Steve Dickstein, vice president of marketing for Ready Pac, acknowledged that the three associates in question have joined Ready Pac since leaving Dole, but he said the suit is completely without merit.
He added that many employees have left Dole over the past year and have joined many different produce companies. He indicated that three of them joining Ready Pac is not significant, but rather understandable given Ready Pac's history of innovation and its standing as a good employer.
These are high-caliber employees, Mr. Dickstein told The Produce News July 20. It makes perfect sense they were attracted to a company of Ready Pacs stature. Ready Pac has a history of innovation and is the fastest-growing company in the [bagged salad] category.
Mr. Dickstein made it clear that these employees sought out Ready Pac rather than Ready Pac recruiting these employees.
Fresh Express and Dole are the clear leaders in the category nationwide, ahead of third-place Ready Pac by a significant margin, Mr. Dickstein acknowledged. On the West Coast, however, sales among the three leaders in the category are much more comparable, and the Ready Pac executive reiterated that his firm is outdistancing the others in terms of sales gains.
The three employees named in the lawsuit are Allan Sabatier, Brian Rogers and David Williams. At Dole, Mr. Sabatier was vice president of value-added product sales, while the other two were sales managers of national accounts. Each resigned from Dole between March and June to work for Ready Pac, according to the lawsuit.
According to the lawsuit, Ready Pac CEO Larry Kern supervised each of those employees while all four were at Dole. The lawsuit also claims that the three associates had signed employment agreements in 2003 stating they would not interfere with Doles business or its relationships with clients while they were employed at the company or for one year thereafter. Mr. Dickstein said that these three employees represent only a small portion of the Ready Pac sales staff, about 5 percent, he said.
Two attorneys familiar with labor law and California agricultural, who asked not to be identified, discussed the general principles of the case, but not the actual merits, as neither had seen this specific lawsuit. Under California labor law, they both said independently that non-compete contracts are generally unenforceable. According to one of the attorneys, California courts have held that employees should be free to move from one company to the next with minimal restrictions. He said that non-compete contracts are typically held up by the courts only when an owner is involved who has received significant consideration for selling the company.
In this case, Dole has not chosen to sue the employees themselves but rather the company that has hired them. The attorneys who discussed the case with The Produce News indicated that this type of lawsuit has a much better chance in California courts.
Under California law, this is considered a tort, specifically a breach of contract, said one of the attorneys. This is a different principle of law than a non-compete contract. As policy, California courts have determined that they are not going to allow one company to target the employees of another in an effort to do that company harm.
While the law is clear, this attorney said that it is a difficult case to prove. If the employees themselves made the initial contact with Ready Pac, it would be virtually impossible to prove that Ready Pac targeted these employees.
As a regular course of action in such lawsuits, Ready Pac is now required to respond to the suit in some manner. The outside attorney said that Ready Pac would probably ask for the case to be dismissed. Failing that, each side will go into the discovery phase of the suit and then a settlement or a trial will result.
It wont happen quickly, said the attorney. It should last at least a year. The wheels of justice tend to move quite slowly.
Dole did not respond to phone inquiries for comment on the lawsuit by The Produce News press time.
The suit was filed in Monterey Superior Court June 18 and alleges that Ready Pac has engaged and continues to engage in unfair competition. The suit names three employees that left Dole between March and June and now work for Ready Pac.
Steve Dickstein, vice president of marketing for Ready Pac, acknowledged that the three associates in question have joined Ready Pac since leaving Dole, but he said the suit is completely without merit.
He added that many employees have left Dole over the past year and have joined many different produce companies. He indicated that three of them joining Ready Pac is not significant, but rather understandable given Ready Pac's history of innovation and its standing as a good employer.
These are high-caliber employees, Mr. Dickstein told The Produce News July 20. It makes perfect sense they were attracted to a company of Ready Pacs stature. Ready Pac has a history of innovation and is the fastest-growing company in the [bagged salad] category.
Mr. Dickstein made it clear that these employees sought out Ready Pac rather than Ready Pac recruiting these employees.
Fresh Express and Dole are the clear leaders in the category nationwide, ahead of third-place Ready Pac by a significant margin, Mr. Dickstein acknowledged. On the West Coast, however, sales among the three leaders in the category are much more comparable, and the Ready Pac executive reiterated that his firm is outdistancing the others in terms of sales gains.
The three employees named in the lawsuit are Allan Sabatier, Brian Rogers and David Williams. At Dole, Mr. Sabatier was vice president of value-added product sales, while the other two were sales managers of national accounts. Each resigned from Dole between March and June to work for Ready Pac, according to the lawsuit.
According to the lawsuit, Ready Pac CEO Larry Kern supervised each of those employees while all four were at Dole. The lawsuit also claims that the three associates had signed employment agreements in 2003 stating they would not interfere with Doles business or its relationships with clients while they were employed at the company or for one year thereafter. Mr. Dickstein said that these three employees represent only a small portion of the Ready Pac sales staff, about 5 percent, he said.
Two attorneys familiar with labor law and California agricultural, who asked not to be identified, discussed the general principles of the case, but not the actual merits, as neither had seen this specific lawsuit. Under California labor law, they both said independently that non-compete contracts are generally unenforceable. According to one of the attorneys, California courts have held that employees should be free to move from one company to the next with minimal restrictions. He said that non-compete contracts are typically held up by the courts only when an owner is involved who has received significant consideration for selling the company.
In this case, Dole has not chosen to sue the employees themselves but rather the company that has hired them. The attorneys who discussed the case with The Produce News indicated that this type of lawsuit has a much better chance in California courts.
Under California law, this is considered a tort, specifically a breach of contract, said one of the attorneys. This is a different principle of law than a non-compete contract. As policy, California courts have determined that they are not going to allow one company to target the employees of another in an effort to do that company harm.
While the law is clear, this attorney said that it is a difficult case to prove. If the employees themselves made the initial contact with Ready Pac, it would be virtually impossible to prove that Ready Pac targeted these employees.
As a regular course of action in such lawsuits, Ready Pac is now required to respond to the suit in some manner. The outside attorney said that Ready Pac would probably ask for the case to be dismissed. Failing that, each side will go into the discovery phase of the suit and then a settlement or a trial will result.
It wont happen quickly, said the attorney. It should last at least a year. The wheels of justice tend to move quite slowly.
Dole did not respond to phone inquiries for comment on the lawsuit by The Produce News press time.
