TAMPA, Fla. (CN) – The Big Lots retail chain claims the Tampa-based Retail Intelligence Group duped 72 of store managers into revealing proprietary information and then sold it to investors, to profit from trading on the inside information. Big Lots claims the Retail Intelligence Group stole trade secrets – including inventory, quarterly sales performance statistics, payroll and promotion strategies – and sold them, getting competitive advantage over “legitimate analysts who must confine their analysis to publicly-available information.”
Big Lots operates more than 1,300 retail stores in 47 states. It sued the Retail Intelligence Group (RIG) in Hillsborough County Court.
Citing RIG’s own website, Big Lots says RIG conducts “‘robust store-level manager surveys and extensive store visits’ in order to peddle information on its target businesses to those seeking to ‘realize threats/declines ahead of other investors.'”
The complaint cites a Nov. 20 Wall Street Journal report on the “intense scrutiny” the U.S. government has recently given to expert network analysts and consultants. Through such tactics, it is believed the firms may “reap illegal profits totaling tens of millions of dollars,” the complaint states, citing the Wall Street Journal story.
The lawsuit does not state how RIG allegedly got Big Lots managers to reveal proprietary information, which is a violation of company policy.
Big Lots says it did not even know it was under scrutiny by the Retail Intelligence Group until it received a copy of its printed report.
“Big Lots only releases this type of confidential information to analysts in a controlled manner as part of a quarterly report or earnings call, in accordance with federal securities law,” the complaint states.
The uncontrolled release of the information by Retail Intelligence Group has “caused other types of financial, reputational, and organizational damage to the company,” the complaint states.
“The report demonstrates that RIG is working to undermine Big Lots’ control over its trade secrets and/or confidential and proprietary information and its management personnel, and knowledge of this fact harms both employee morale and current and prospective business relationships,” it adds.
Big Lots wants RIG enjoined from using its proprietary information, damages and court costs on claims of tortious interference with employment relationships, aiding and abetting breach of fiduciary duty, and violation of Florida’s Uniform Trade Secrets Act.
Big Lots is represented by David Weinstein and Richard McCrea with Greenberg Traurig.