Belk is suing its former CEO and ex-supply chain chief, as well as their new employer, GameStop, over allegations that the video game retailer is poaching employees from the department store.
Nir Patel served as Belk’s CEO until May 27, when he left the company and accepted a position as GameStop’s chief operating officer. Shortly thereafter, the lawsuit alleges that Patel initiated a campaign to solicit some of Belk’s most senior employees to resign from the department store chain and join him at GameStop.
But according to Belk, Patel’s employment terms barred him from soliciting, recruiting, or hire the retailer’s employees for a period of 12 months after his departure. This means Patel’s conduct is in direct violation of his non-solicitation obligations to Belk, the company claimed in the suit originally filed on Aug. 22.
The accusations extend all the way to GameStop, which the lawsuit states “actively assisted and encouraged Patel’s unlawful solicitation.” In particular, it accused CEO Matthew Furlong and chairman Ryan Cohen of aiding and abetting the recruitment efforts.
GameStop did not immediately respond to a request for comment.
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In early June, Patel allegedly began to solicit Tim May, Belk’s then-senior vice president of supply chain, to join GameStop, enlisting other senior GameStop representatives in the process. May ended up departing Belk in August for a role at GameStop.
On June 9, Furlong reached out to May via email, asking if he would be available for an intro call. Having no prior relationship with May, Furlong said he understood May would “be a good fit,” which was likely based on conversations Furlong had with Patel. Belk alleges this communication violated Patel’s non-solicitation agreement.
One month later, Furlong again emailed May, with both Cohen and a GameStop board member, Alan Attal, copied on the mail. Furlong said he and May had a “good initial discussion” and that it would be helpful for Cohen and Attal to connect with him. Belk alleged Furlong was acting at Patel’s direction. Later that day, Patel had a 30-minute videoconference with May.
Shortly after the meeting, May resigned from Belk. On July 22, Cohen sent May an email saying he “look[ed] forward to working together.”
Belk’s issues with May differ slightly from the allegations against Patel, as May allegedly stole compensation information for hundreds of Belk employees, according to the complaint. Belk says that in the weeks before he left the company, May sent spreadsheets with confidential information to his personal emails that included Belk employees’ annual pay, bonuses and other benefit information.
“Such information is, of course, invaluable to Patel and GameStop in their scheme to raid Belk’s employees, by enabling them to tailor their offers to match or exceed the current compensation of any Belk employees whom they attempt to solicit,” the suit said.
The suit said that while the full extent of May’s wrongdoing was not yet clear, they alleged that he “undoubtedly” intended to use that information to assist Patel and GameStop in their campaign to raid Belk’s senior ranks.
May was allegedly not the only target of Patel’s alleged solicitation, Belk argued. The department store said Patel tried to get Phillip Burke, the retailer’s general vice president of HR shared services and total rewards, to jump ship for GameStop.
On June 30, Burke received a LinkedIn message from GameStop senior recruiter Kathy Akers. Akers’ message stated that she was assisting GameStop in “hand picking individuals who will help drive [the company] forward,” and she believed Burke was “someone who may be interested in chatting about GameStop.”
Burke then met with another GameStop exec on July 11, who admitted during the meeting that Patel wanted to see if he was interested in the job. Burke did not move forward with the process and didn’t take the job.
Across the suit, Belk claims the defendants violated the Defend Trade Secrets Action and the North Carolina Trade Secrets Protection Act, and accused them of breach of contract, tortious interference with contract, and unfair and deceptive trade practices.
As part of Patel’s non-solicitation agreement, in the event of a breach or threatened breach, Belk would be entitled to obtain “equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages or the posting of a bond or other security.”
Belk has since replaced Patel with Don Hendricks, who first served as interim CEO before officially becoming permanent in September.
On Sept. 13, GameStop requested a 10-day deadline extension for all of the defendants to respond, citing ongoing, productive settlement discussions, according to court filings. An agreement could result in the dismissal of the complaint, according to GameStop.