January 5, 2023
Mlazgar Sues Another: This Time, Current®
Lighting agent claims Hubbell Lighting representation ended with breach of contract and fraud
In recent years, Minnesota-based Mlazgar Associates has launched lawsuits against a competing agent, ex-employees and former line, Focal Point. Last week in U.S. District Court for the District of South Carolina, the agency filed a lawsuit against HLI Solutions, a subsidiary of Current®, claiming that the agency’s representation of Hubbell Lighting, Litecontrol and Progress Lighting ended in breach of contract and fraud.
Mlazgar claims that it is owed unpaid commissions and that Hubbell Lighting’s collaboration and eventual partnership with competing agent JTH Lighting Alliance has caused Mlazgar damages.
Mlazgar’s 2020 move to Cooper Lighting
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For many years, Mlazgar was the agent for Hubbell Lighting and Progress Lighting in Minnesota, the Dakotas and some counties in northwest Wisconsin.
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In October 2020, it was announced that Mlazgar would become the representative for Cooper Lighting Solutions in that same territory, effective November 15, 2020.
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Additionally, Mlazgar entered into an agreement to purchase the assets of Elan Lighting, a Milwaukee-area lighting agent that represented Cooper Lighting and dozens of other lighting manufacturers throughout most of Wisconsin.
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The end result was that Mlazgar was the new Cooper Lighting agent for a large chunk of the Upper Midwest; Minnesota, North Dakota, South Dakota and Wisconsin.
Mlazgar sued competing agent, JTH
inside.lighting is the only lighting media site that has reported and followed the yet-to-be-resolved legal actions by Mlazgar:
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During all market reshuffling in late 2020, Mlazgar competitor JTH aligned with Hubbell Lighting and hired numerous former Mlazgar (Elan) employees.
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In a remarkable lawsuit filed in 2021, Mlazgar claimed that JTH and multiple former Mlazgar employees conspired against Mlazgar.
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In 2022, court documents revealed some eye-opening details that seemingly support Mlazgar’s claims against JTH and the ex-Mlazgar employees.
Stunning accusations against Hubbell Lighting:
In the just-filed lawsuit, Mlazgar claims that Hubbell Lighting played a role in JTH’s alleged unethical actions: “Defendants conspired with JTH to recruit Mlazgar’s employees, steal Mlazgar’s confidential, proprietary, and trade secret information, and interfere with Mlazgar’s contracts and business relationships. Through the Mlazgar employees that they successfully recruited from Mlazgar, Defendants obtained hundreds of thousands of Mlazgar’s confidential, proprietary, and trade secret documents for their own use and for use against Mlazgar with JTH.”
Mlazgar provides no details that back up its claims that Hubbell Lighting obtained hundreds of thousands of Mlazgar’s confidential documents. If the agency proves their allegations with hard evidence during subsequent court proceedings, it would be an absolutely stunning revelation.
Breach of Contract claims:
Traditional business practices in U.S. and Canada commercial/industrial lighting markets demonstrate that Hubbell Lighting and Cooper Lighting do not share the same agent in local territories. When an agent forms a new partnership with one of the majors (including Acuity Brands and Genlyte Solutions) the partnership with the incumbent major line typically ends swiftly.
In the case of Mlazgar and Hubbell Lighting, however, it appears that the agency formed a new partnership with Cooper Lighting and instead of proactively terminating the sales agreement with Hubbell Lighting, they seemingly let the manufacturer initiate the customary and seemingly inevitable termination – which may possibly open the door for Mlazgar to have legal claims of unpaid commissions and breach of contract.
Is Mlazgar opportunistically leveraging Minnesota law in its favor?
As inside.lighting detailed in the November article, Before You Terminate Your Minnesota Sales Rep..., the state of Minnesota offers unusually stringent additional protections for sales representative companies.
Minnesota law restricts a manufacturer from terminating a sales representative agreement unless it has good cause, provides written notice of the reasons for the termination 90 days in advance, and allows the sales representative 60 days to correct the reasons that were given to justify the termination.
In 2022, Mlazgar sued Focal Point, claiming that the manufacturer improperly terminated the sales representation contract. Like this new lawsuit against HLI, Mlazgar claimed breach of contract and unpaid commissions after Focal Point appointed JTH as its new agent throughout the territory.
These Minnesota statutes may prove inconsequential as the parties reportedly agreed that any legal dispute would be heard in South Carolina courts and that their disputes would be interpreted in accordance with South Carolina law.
Current® is no stranger to breach of contract disagreements with lighting agents. In late 2022, the company sued its former Atlanta agent, Lighting Associates, for allegedly terminating a sales agreement before the term ended. Lighting Associates reunited with Current® competitor, Acuity Brands months ago.
Multiple defendants:
In addition to HLI and Litecontrol – which are now owned by Current® – Progress Lighting is cited as a defendant. Current® did not acquire Progress Lighting, so under Hubbell Inc. ownership, Progress Lighting may be defending itself separately from the Current® companies.
The Current® subsidiaries and Progress Lighting have 30 days to respond to the complaint. Current® politely declined to comment on the open litigation. Mlazgar Associates did not immediately respond to our questions and request for comment. The allegations contained in Mlazgar's complaint occured before Current® closed on its acquisiton of Hubbell Lighting in February 2022.
