Walmart Sues to Block Tax Executive's Move to Amazon
Walmart Inc. on Thursday sued to prevent a former top tax executive from taking a job with Amazon.com Inc., arguing the move would present a "direct competitive threat" to Walmart by exposing the online retailer's business strategy and potential merger plans.
June 07, 2018 at 05:42 PM
3 minute read
Walmart Inc. on Thursday sued to prevent a former top tax executive from taking a job with Amazon.com Inc., arguing the move would present a “direct competitive threat” to Walmart by exposing the online retailer's business strategy and potential merger plans.
The lawsuit, filed in the Delaware Court of Chancery, accused Lisa Wadlin, Walmart's senior vice president and chief tax officer, of breaching a noncompete provision in her employment contract that bars her from taking a job with a competitor or global retail business for two years after leaving the Bentonville, Arkansas-based corporation.
“Wadlin's pursuit of employment with Amazon eviscerates the contractual terms Walmart bargained for, specifically, the protection of its economic interests by securing restrictions in advance on its senior employee's ability to work for its direct competitor,” Walmart's Richards, Layton & Finger attorneys said in a 19-page complaint.
“The information Wadlin had access to in her role at Walmart would be of significant advantage to a competitor of Walmart, such as Amazon, since her knowledge of strategic information and future business plans would be of immense benefit to Amazon,” the complaint goes on to say.
Walmart's suit is seeking a court order to prevent Wadlin from joining Amazon until May 2020. The case has been assigned to Vice Chancellor J. Travis Laster.
Walmart's press office did not return a call Thursday seeking comment on the case, and Amazon did not respond to a request for comment.
According to the lawsuit, Wadlin joined Walmart in 2011 and was promoted two years later to senior vice president of global tax. In 2015, she took on the role of chief tax officer, where she reported directly to Walmart's executive vice president and was responsible for developing the company's overall tax strategy, Walmart said.
The complaint said Wadlin was deeply involved in Walmart's thinking on mergers and acquisitions, played an important role in the company's bid for Indian e-commerce giant Flipkart Pvt Ltd. During her time at Walmart, Wadlin also gained key insight into “some of Walmart's most sensitive information,” including future projections and short- and long-term strategies.
“Wadlin had access to Walmart's highly confidential and sensitive business information and strategies,” the complaint said.
Wadlin told her bosses in January that she was considering resigning, and Walmart tried to negotiate a retention package in hopes that she would stay on to assist with ongoing projects, the retailer said. The company announced her departure in an internal memo on May 4.
Walmart said it didn't learn about Wadlin's position with Amazon until she filed papers in a separate court proceeding later that month, saying she had “obtained employment that would require her to relocate to Seattle,” home of Amazon's corporate headquarters.
Walmart has been vying to put a dent in Amazon's dominance in online retailing, and the company, and its domestic grocery business competes directly with Amazon's Whole Foods, which operates 500 stores across the United States.
“Wadlin is bound by a noncompete provision, and her employment by Amazon would directly violate the terms of her noncompete agreement with Walmart,” the company said.
Walmart is represented by Robert W. Whetzel, Jennifer C. Jauffret and Travis S. Hunter of Richards Layton.
An online docket-tracking service did not list attorneys for Wadlin.
The case is captioned Walmart v. Wadlin.
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