Christie’s Sued in $60M|Spat Over Handbags

MANHATTAN (CN) – Heritage Auctions claims in court that Christie’s orchestrated a “raid of its entire management” of a profitable branch of its business that sold extremely expensive handbags.
     Texas-based Heritage sued Christie’s and the three employees that defected for $60 million in New York County Supreme Court.
     The New York Times dubbed the auction houses’ spat the “battle of the Birkins,” for Hermès line of handbags named after actress Jane Birkin.
     Heritage claims that it spent four years grooming recent college graduate Michael Rubinger as a “star” and “worldwide ambassador” for its luxury accessories division, giving him media training and hiring an outside expert to introduce him to valuable contacts in Hong Kong and Japan.
     It took Christie’s deputy chairman Jonathan Rendell just the weekend of May 17 to persuade Rubinger to break his contract and encourage his lieutenants Rachel Koffsky and Caitlin Donovan to join him, Heritage says in the lawsuit.
     “Christie’s locked up the whole management team with employment contracts so that Rubinger, Koffsky, and Donovan would not show up for work on Monday, May 19, 2014,” the complaint states.
     The trio avoided announcing their “switch of allegiance” to poach trade secrets for their new employer, Heritage claims.
     “After deciding to defect to Christie’s – but before tendering their resignations to Heritage and without revealing their switch of allegiance to Christie’s – the individual defendants acted contrary to Heritage’s interest for the purpose of benefiting Christie’s,” the complaint states.
     A week before tendering their resignations, Rubinger and Koffsky attended an executive meeting where they heard “highly confidential strategic plans” for the luxury accessories business, according to the complaint.
     Heritage claims that all three former employees were neophytes to the auction world and will inevitably disclose its trade secrets.
     “Since Rubinger, Koffsky and Donovan came to Heritage with no prior experience in the auction field and with no prior business contacts – and because they have been hired by Christie’s to clone the business that they ran for Heritage – they cannot perform their new duties for Christie’s without using Heritage’s confidential information, including its successful auction marketing strategies and other trade secrets, customer information, various customer and dealer lists, supplier contacts, and other confidential information,” the complaint states.
     A Christie’s spokesperson told Courthouse News that the lawsuit was “wholly without merit.”
     “We are prepared to vigorously defend these claims and Christie’s decision to expand our existing handbag department,” the spokesperson said.
     Christie’s website shows that it had auctioned “Hermès: Four One-of-A-Kind Passe-Guide Bags” in May 2012.
     Heritage claims, however, that Christie’s “struggled to build a successful luxury accessories business.”
     “Christie’s effort to create such a business in its London office, did not achieve the success enjoyed by Heritage, which is the global leader in this area,” the complaint states.
     Heritage demands $60 million in damages for unfair business practices, aiding and abetting breach of fiduciary duties, tortious interference with contracts, and other charges.
     It is represented by Thomas Battistoni, with Schiff Hardin.

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