Belk is suing its former CEO, Nir Patel, and his new employer, GameStop, over accusations of “blatantly” stealing employees.
In a complaint filed in United States District Court Western District of North Carolina on Aug. 22, Belk alleges that Patel, upon joining GameStop as chief operating officer, “commenced a campaign to solicit some of Belk’s most senior employees to resign from Belk and join him at GameStop — despite the fact that Patel had agreed, for a period of 12 months after his departure from Belk, not to solicit, recruit or hire Belk’s employees,” the complaint stated.
The Charlotte, N.C.-based company also alleges that GameStop was aware of Patel’s actions and “actively assisted and encouraged” him in his pursuit of poaching Belk employees.
“Indeed, some of GameStop’s most senior management personnel, including its CEO and chairman, aided and abetted Patel’s wrongful recruitment efforts, by directly contacting and recruiting senior Belk employees on Patel’s behalf,” the complaint states. “GameStop’s conduct constitutes tortious interference with Patel’s contracts with Belk, as well as unfair and deceptive trade practices.”
What’s more, Belk is also seeking to enjoin its former SVP of supply chain, Tim May, who left the retailer for GameStop earlier this month. Belk is claiming that May allegedly stole confidential compensation information for hundreds of its employees in the weeks leading up to his departure. “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.
Belk is further claiming that this “wrongful conduct,” unless stopped, will cause “irreparable injury” to its business. Accordingly, Belk is bringing claims against these parties for violation of the Defend Trade Secrets Action, violation of the North Carolina Trade Secrets Protection Act, breach of contract, tortious interference with contract, and unfair and deceptive trade practices, and seeks injunctive relief barring the defendants from continuing their illegal activities.
In Monday’s complaint, Belk said it is seeking damages “in an amount to be determined at trial,” including punitive damages against May under the North Carolina Trade Secrets Protection Act. The department store chain is also asking the defendants to return all confidential information in their possession, as well as submit to a forensic examination, at their expense, of all hardware and other media.
FN has reached out to Belk and GameStop for comment.
Patel joined GameStop in May after nearly a one-year stint as CEO of Belk. He joined Belk in October 2016 as EVP/GMM and was promoted to CEO in July 2021. He previously held senior roles at Kohl’s and Lands’ End after beginning his career at Target and Gap.
In February 2021, Belk filed for Chapter 11 protection in a Houston bankruptcy court through an expedited “pre-packaged, one-day” reorganization. Two weeks prior to the filing, lenders holding 99% of Belk’s first lien term loan and 100% of its second lien term loan entered into a restructuring support agreement. The plan enabled the retailer to raise $225 million of new capital, reduce debt by roughly $450 million and extend maturities on all of its term loans to July 2025.