LOS ANGELES (CN) – In a big-money court fight over dolls, MGA Entertainment claims Hasbro stole its employees and trade secrets to develop a Princess doll for Disney, and “cripple” MGA along the way.
MGA ferociously defends its brands. It has filed at least 20 lawsuits involving its Bratz doll alone, according to the Courthouse News database. None of those lawsuits involved Hasbro. Hasbro’s and MGA’s only significant legal fight until this week was a 2006 tussle over a toy oven.
Hasbro is the nation’s second-largest toymaker, and the third-largest in the world. Hasbro’s toys “focused on boy’s brand toys such as G.I. Joe and Transformers,” MGA claims in its Oct. 21 complaint in Superior Court.
In addition to Bratz dolls, MGA also make Little Tikes toys and Mooshka dolls, according to the lawsuit and to the MGA website.
MGA claims in its lawsuit that when Hasbro this year started negotiations to acquire the Disney Princess brand, many retailers told Disney they preferred that MGA get the license, “citing the quality of MGA’s products and packaging.”
But Hasbro got the license, with a contractually mandated 2016 release date, MGA says in the complaint. Whereupon Hasbro sought “to use the pretense of a new girl’s brand doll license as a shield to engage in anti-competitive business practices and tortiously interfere with the business of MGA,” according to the lawsuit.
MGA claims Hasbro “wrongfully obtained confidential and proprietary information” about MGA’s “key” personnel and their salaries and benefits.
Armed with this information, MGA claims, Hasbro “exploited and continue to exploit wrongfully acquired ‘insider information’ in a manner designed intentionally to disrupt the business operations of MGA.”
Hasbro targeted and lured away employees critical to MGA’s success, with the “specific intent to cripple MGA’s operations,” MGA says.
One MGA employee was contacted 13 times in a single day, and Hasbro offered to triple the salaries of MGA’s employees and employ them without job interviews, MGA claims. It says that Hasbro has hired away four MGA workers, and several others have refused job offers.
After workers jump to Hasbro, MGA says, Hasbro requires them “to engage in a subversive campaign against the company, including actively recruiting” more MGA employees and “interrogating company employees on the details of confidential product lines.”
Hasbro also has MGA employees create online profiles and submit resumes via third parties to “conceal the true nature of Hasbro’s malicious and willful conduct” and tell those who have agreed to work for Hasbro to “lie, misrepresent, obscure, mislead and otherwise conceal” to continue the “espionage and employee-poaching campaign,” MGA claims.
Hasbro’s ultimate goal, MGA says, is to “destroy MGA as a viable market competitor” and “to cripple MGA’s ability to compete for employees and as a viable market competitor.”
If successful, MGA says, Hasbro will “intentionally price products at artificially low levels to attempt to capture market share.”
MGA seeks an injunction, costs, and compensatory and punitive damages for unfair competition, unfair business practices and tortious interference with contract and economic advantage.
Named as defendants are Hasbro, Hasbro Studios, recruiter Brian McNeil, CEO Brian Goldner and President Stephen J. Davis.
MGA is represented by Douglas V. Dukelow, of Van Nuys.
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