Acuity Brands has filed suit against Tim Smitreski and Diversified Lighting Associates. The complaint alleges that Smitreski violated his non-compete agreement with Acuity. The complaint seeks to enforce the non-compete and to protect trade secrets and confidential information.
As you will see, it appears that Acuity has much evidence, but a critical issue will be whether the court believes an Agent is truly a competitor of a Manufacturer.
Highlights of the complaint allege the following:
- Smitreski worked for Acuity for 13 years as a Regional Sales Manager in commercial and residential.
- On September 8, 2021, Smitreski voluntarily resigned from Acuity. Immediately before his resignation, he furtively copied, transferred, and sent himself Acuity’s confidential information and trade secrets, including its strategic marketing plans, a quote sheet with over 200 Acuity products and quotes with discounts off stock pricing for certain distributors, a point-of-sale report showing the quantity of product, product SKUs, revenue generated by a distributor’s various branch locations, and Acuity’s customer contacts.
- By the end of his employment, Smitreski received nearly $100,000 in value of vested restricted stock. In return, Smitreski agreed to the 2020 RSU Agreement’s post-employment restrictive covenants, including a non-compete for a one-year period after he left Acuity.
- The DLA Defendants recruited Smitreski with a financially exorbitant offer of employment (nearly double his six-figure plus base salary at Acuity and paid him a $125,000 signing bonus) to induce Smitreski to violate his non-compete and unlawfully transfer Acuity’s business and customer relationships.
- This compensation package is so disproportional to the market rate that it shows the DLA Defendants are paying Smitreski to capitalize on the customer relationships and goodwill he developed while employed by Acuity.
- Prior to filing this action, Acuity attempted to contact Smitreski and separately the DLA Defendants, each by letter via email and Federal Express, in a good-faith attempt to discuss Smitreski’s obligations to Acuity. Neither Smitreski nor the DLA Defendants responded to either one of Acuity’s letters.
- Acuity paid salary and bonuses to Smitreski in the amounts of: $202,209.66 in 2020; $194,229.08 in 2019; and $193,905.01 in 2018.
- Smitreski agreed not to solicit Acuity’s customers, employees, and sales agents for two years.
- On September 1, 2021, in direct violation of contractual and common law duties to Acuity, Smitreski sent an email to his personal email account attaching an 11-page Quote for UPR business (or energy channel) containing specific below-target pricing for over 200 Acuity products, which is used by Acuity distributors.
- On September 6, 2021, in direct violation of his contractual duties to Acuity, Smitreski sent 5 emails to his personal email account attaching confidential information.
- Smitreski sent customer contact information to which he had access over 13 years with Acuity.
- A forensic analysis of Smitreski’s Acuity computer showed that, shortly before his resignation, Smitreski transferred Acuity’s confidential information and trade secrets to a USB device.
- A forensic examination of Smitreski’s Acuity iPhone revealed that it had been “wiped” and restored to factory settings
EdisonReport reached out to Acuity and they had no comment.
Bruce King, CEO of Diversified Lighting Associates did speak with us on the record. Bruce stated that in his opinion, he believes, “The suit is related to Acuity’s prior bad-faith termination of Liberty Lighting Group.” (Diversified joined forces with Liberty after Liberty lost the Acuity line in May). He went onto say that they are working with their attorneys and will vigorously dispute all allegations in the complaint. He ended the conversation by saying, “More to Come.”
I have no inside information on this suit, but I do see one minor, but interesting error in Acuity’s filing. According to Exhibit A, section IV, Factual Allegations: “Acuity also sponsors and sets up an installation at the Annual LightFair trade show and conference.” If Acuity exhibited at LightFair 2021, your humble editor missed them.
Smitreski’s Compensation:
We made a few assumptions in calculating Smitreski’s total compensation for 2021 from Acuity and Diversified:
- Acuity claims Diversified nearly double his six-figure plus base salary; we estimate $10,000 per month from Acuity and $18,000 per month from Diversified
- Acuity claims salary and bonus for 2020 at $202,209.66; we estimate $6500 per month bonus.
Acuity is asking for many things including a restraining order, compensatory, consequential and punitive damages and attorneys’ fees.
Developing…