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November 11, 2021   

Acuity Brands Sues Competing Lighting Agent and Ex-Employee

2021 11 acuity brands lighting versus Smitreski  and diversified ligting associates.jpg

Non-compete and confidentiality agreements are at the center of a dispute between large manufacturer and large lighting agent

 

Acuity Brands has filed a lawsuit in the State of Delaware against lighting agent, Diversified, and former Acuity Brands employee, Tim Smitreski. 

According to the complaint, Acuity Brands employed Smitreski for 13 years, most recently as a Regional Sales Manager based in Northern New Jersey. In September, Smitreski resigned from Acuity to join Diversified New Jersey - a sales agency in Northern New Jersey that represents Hubbell Lighting, LSI, Williams and other leading lighting companies. Diversified New Jersey recently grew in size when it joined forces with the former Acuity agent, Liberty Lighting Group.

At the center of the lawsuit is a 2020 Stock Award Agreement between Acuity and Smitreski that seemed to provide Smitreski with some valuable financial benefits, but also included language that required Smitreski to comply with some restrictive non-competition and confidentiality clauses. 

Acuity Brands’ allegations:

Acuity states that Smitreski's employment with Diversified has resulted in the solicitation of at least two Acuity customers, Turtle & Hughes* and Cooper Electric*, and will undoubtedly require the solicitation of other Acuity customers with which he had prior contact while employed with Acuity.

Smitreski is accused of misappropriating Acuity’s confidential information and trade secrets and has taken them to his new employer, Diversified, where he has used or will use that information to actively solicit and service Acuity’s existing customers.

Smitreski allegedly played in a golf-outing foursome with two other Diversified employees and rode in a golf cart with a representative of an Acuity high-value ($5-$6 million in annual revenue) customer Turtle & Hughes*.

The case against Diversified:

Acuity alleges that a principal of Liberty Lighting Group, the former Acuity Brands agent who is now a principal at Diversified, has had firsthand knowledge of the terms of the Stock Award Agreement between Acuity and Smitreski.

Acuity claims that Diversified has knowingly and intentionally encouraged Smitreski’ s solicitation of Acuity’s customers on behalf of Diversified by paying him almost double what he was paid at Acuity and offering him a $125,000 signing bonus. Acuity believes that Diversified is paying Smitreski to capitalize on the customer relationships and goodwill he developed while employed by Acuity.

In supporting its claim that there are legitimate business reasons for restrictive covenants in the lighting industry, Acuity cites a 2016 lawsuit in which Diversified sued a former employee and the Philadelphia-area Acuity agent, Illuminations, Inc.

Diversified comments to inside.lighting:

Bruce King, CEO of Diversified, shared with inside.lighting that the agency “vigorously disputes all of the allegations in the complaint and we will absolutely be advocating for our position.” King went on to state that “Acuity’s attack on us is inappropriate and anti-competitive.” King mentioned multiple times that there was much more to the story and that those facts will reveal themselves over time.

When asked if Diversified had prior knowledge of any Stock Award Agreements between Acuity and Smitreski, King described Acuity’s actions as “vindictive” and speculated that the lawsuit is related to “Acuity’s prior bad-faith termination of Liberty Lighting Group.”

Computer forensics:

Acuity states that the company engaged with a digital forensic services company that claims that the following files were transferred from Smitreski’s computer during his final days of employment:

  • D:\ABL SEPT 2021\DLA Employee Stock.pdf
  • D:\ABL SEPT 2021\Diversified Lighting Associates, Inc. Employee Stock.pdf
  • D:\ABL SEPT 2021\SmitreskiOfferAccepted.pdf
  • D:\ABL SEPT 2021\Diversified.pdf
  • D:\ABL SEPT 2021\21.7_Market_Intel.pdf
  • D:\ABL SEPT 2021\Contacts
  • D:\ABL SEPT 2021\Contacts\Covve Export.csv
  • D:\ABL SEPT 2021\Contacts\Contacts.CSV
  • D:\ABL SEPT 2021\Contacts\ContactCards.CSV
  • D:\ABL SEPT 2021\ContactCards.CSV
  • D:\ABL SEPT 2021\Cooper Electric POS Report Sept 19 - June 21 NEW.xlsx

Based on file names alone, the information seems to include details of Smitreski's job offer with Diversified, Point-of-Sale history for Cooper Electric, a market intelligence report and numerous contacts.

 

Below is an excerpt from Acuity Brands Global Restricted Stock Unit Notification and Award Agreement.

AYI RSU agreement.png

 

*The lawsuit abbreviates customer names T.H. and C.E. multiple times. We believe the abbreviations to be shorthand for Turtle & Hughes and Cooper Electric, the two largest electrical distributor chains in Northern New Jersey.

 

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