In a titanic battle of bosum-oriented restaurant chains, Hooters of America filed a trade secret theft suit against La Cima Restaurants, owner of “Twin Peaks Restaurants” on September 28, 2011. The bare allegations of the complaint reveal outrageous conduct by defendant, if true.
La Cima announced in August plans to open 35 Twin Peaks restaurant franchises in the Southeast, including Georgia, where the suit was filed. They would compete head to head with Hooters in the leering male market niche. Shortly before this announcement, Hooters Vice President of Operations and Purchasing (Joseph Hummel) resigned to become a partner and Chief Operating Officer of La Cima. Shortly thereafter, other top executives left Hooters to join the Twin Peaks team.
The complaint is heavy with detail of all the trade secret information to which Hummel had access as Vice President. This detail is a useful reminder of non-technical confidential information which may deserve any company’s trade secret protection through the courts: updates of ongoing real estate and business development projects, reports from Purchasing, Distribution, R&D and Operations, future initiatives, pricing, menu innovations, product innovations, marketing plans, employee recruiting plans, franchise performance data, vendor/supplier information and other business intelligence.
The critical fact suggesting misappropriation of this trade secret information, according to the complaint, was flagrant accessing of the company e-mail account and company network after resignation to download “highly sensitive information,” including Hooters’ development blueprint for recruiting employees, compilations of sales reflecting the best performing locations, internal market forecasts and analyses and detailed negotiations with key vendors.
The complaint asks not only for damages but also an injunction to stop Hummel from continued employment with La Cima, as well as stopping La Cima from using the information. It also seeks punitive damages and attorneys’ fees in addition to actual damages caused to Hooters.