Standard Register Co. Files Lawsuit Against Two Former Employees
It's been a busy year for Standard Register Co. The Dayton, Ohio-based company is now suing two long-time, former sales employees for launching a similar company called Focus Impressions Inc., located in the Boston area.
The suit, filed June 29 in U.S. Bankruptcy Court for the District of Delaware, accuses Craig Stockmal and Lynn Smith of breach of contract and misappropriation of trade secrets, among other counts, the Dayton Daily News reported. Prior to their departures in April and June, respectively, both employees had worked at Standard Register Co.'s Boston office since the 1980s.
According to the lawsuit, Stockmal and Smith are accused of "usurping trade secrets, confidential and proprietary information, and customer contacts while employed at Standard Register" to attract customers to Focus Impressions Inc., the paper said. Stockmal also was listed as one of Standard Register's "lead and most highly compensated salesman," responsible for some of its biggest accounts, reported the Dayton Business Journal. Standard Register Co. believes the loss of key clients could negatively impact its sale to Taylor Corp., Mankato, Minn.
In addition to seeking actual and punitive damages, Standard Register Co. is asking the court to enforce employment agreements and to stop the accused from contacting customers or potential customers of Standard Register, said the Dayton Business Journal. On July 1, the bankruptcy court issued a two-week temporary restraining order against Stockmal and Smith and scheduled a hearing for July 15.
The accused pair denies Standard Register Co.'s accusations, and maintains that Focus Impressions Inc. isn't a direct competitor. Stockmal and Smith also pointed out that the employment agreement they originally signed was with Uarco, a subsidiary of the Settsu Corporation of Japan that was acquired by Standard Register Co. in 1998, and that the contract never carried over to their new employer, the Dayton Business Journal reported, citing court documents. Stockmal said that Standard Register Co. executives tried to convince him to sign a non-compete agreement roughly 16 years later in 2014.
Furthermore, the two said Focus Impressions Inc. is solely a software company and of no threat to Standard Register Co. According to the Dayton Business Journal, Focus Impressions Inc. is developing a cloud-based software product that allows businesses to aggregate marketing efforts in one place. Stockmal and Smith hope to market their product to third parties, including franchisors and distributors, and deny any similarities to Standard Register Co.'s SMARTworks product.
"In setting out to develop a new company, there would be no incentive to me in relying upon such outdated technology," Stockmal said in the filing, published in the newspaper.