Dive Brief:
- US Foods has filed a lawsuit against two former Chicago area sales representatives after they allegedly stole confidential US Foods sales information and used it to steal customers for Performance Food Group, where the two representatives, Don Harris and Ira Fenton, took up employment after leaving US Foods.
- US Foods said in the lawsuit that PFG used that information to undercut US Foods' prices and ended up stealing several clients with a sales value of more than $1 million.
- According to the lawsuit, the confidential documents named in the lawsuit included "sales audits, transaction and other account information, including items purchased by every customer in his district" as well as "transportation files and information called 'Descending Dollar Reports,' which includes all purchases, from the top-purchased items to the least, for every customer in the district," Nation's Restaurant News reported.
Dive Insight:
The two sales representatives allegedly used thumb drives and emailed information to personal accounts, which US Foods discovered after performing a forensic analysis on their laptops.
"US Foods also says it sent multiple letters throughout the winter and spring to PFG asking the company to stop Harris and Fenton from using confidential information in solicitations with its customers — and that PFG denied anything improper was going on," Nation's Restaurant News reported.
The lawsuit comes shortly after a costly and drawn-out attempted merger between US Foods and Sysco fell through over the summer. Had the merger gone through, PFG would have acquired 11 US Foods facilities.
Following the failed merger attempt, "US Foods was in a self-described state of limbo during that time, but now that the deal is over the companies have returned to what they’d done for decades before that: Compete aggressively for customers," according to Nation's Restaurant News.