The case of the misled middle man is now in the hands of a U.S. District Court in Georgia, where it will test the efficacy and weight of vendor-sales representative contracts.
The road to court started back in mid-August when UnCommon Fashion owner Blake Rayon was told by one of his sales reps that two of her clients who had previously placed orders through her for the women’s wear brand Sofie the Label were now placing orders directly with Sofie through a third-party platform.
This came as jaw-dropping news to Rayon, whose business model depends on labels using his networking and sales team. It was also the sort of thing he thought he was protected against via the contract he signed with Sofie in April. Up to that point, everything was going fine, with UnCommon having sold more than $200,000 of Sofie products with supposedly another batch of $200,000 in orders on the way.
Two months later, Rayon, who’s been the owner of UnCommon Fashion since graduating from The Citadel in 2001, found himself filing suit in a Georgia U.S. District Court, charging Sofie the Label owners with breach of contract, tortious interference with prospective business relations, theft of trade secrets, and bad faith attorney’s fees.
According to court documents filed Oct. 26, Rayon approached Sofie owners Sarah Yoon and Stephen Wong three days after he learned of the alleged poaching on Aug. 19. UnCommon claims Yoon and Wong summarily terminated the agreement.
“Sofie and UnCommon entered into the Agreement whereby UnCommon would be the exclusive sales representative in the Territory in exchange for a commission fee on all Sofie product sold,” the lawsuit reads. “At some point during the Agreement, Sofie began making sales within the Territory.”
The territory in question includes a number of states, but the two areas at the heart of the dispute are Dallas and especially Atlanta, where UnCommon is headquartered and home to the bustling Atlanta Apparel Market at AmericasMart where UnCommon has its showroom. UnCommon’s other showroom is at the Dallas Apparel Market. Court documents claimed that as of the suit’s filing, Sofie was still setting up shop in both locations selling directly to UnCommon’s clients.
“Further, Sofie is currently at the Dallas Apparel Market, where UnCommon’s second showroom is located,” the complaint says. “Both of these trade shows are within the defined territory of exclusive sales. If the termination was not effective, Sofie has breached the Agreement by selling product within the territory and not paying UnCommon.”
UnCommon’s attorneys contend that Yoon’s and Wong’s termination of the contract was not valid, and even if it was, a 17-month non-solicitation agreement would still be in effect. The lawsuit claims the plaintiff is owed commissions from all of the sales, plus maximum allowed interest, attorney’s fees and “double damages for misappropriation of UnCommon’s trade Secrets.”
The suit claims that since attorneys for UnCommon became involved on Sept. 9, 72 shipped orders, 41 back ordered and 31 confirmed orders were made by Sofie the Label through the end of August on the third-party selling site FashionGo. Attorneys claim Sofie also used a third-party platform called Faire.
UnCommon attorneys say they are unsure whether documentation from FashionGo is complete, and they have received no information from Faire.
Though not mentioned in the court filing, the defendant’s spelling of its company on its website is Sophie the Label, while on FashionGo, it is spelled Sofie the Label. The court documents refer to the brand only as Sofie the Label.
Sofie the Label did not respond to Sourcing Journal requests for comment.