March 15, 2023
Settlement Reached in Acuity Brands vs. Diversified Case
North Jersey dispute over ex-employee's alleged actions reaches a settlement in principle
A Tuesday court filing by attorneys representing Acuity Brands informed the U.S. District Court for the District of Delaware that Acuity Brands has arrived at a settlement in principle with defendants, Diversified and Tim Smitreski. Terms of the settlement in principle are not likely to be disclosed, and dismissal of the case is pending court approval. The motion to dismiss the case is expected to be filed in mid-April.
Diversified, one of the largest Northeast U.S. lighting agents, hired Smitreski to help cover its Northern New Jersey territory in 2021 and reportedly covered Smitreski’s legal fees for the 16-month litigation.
In November 2021, Acuity Brands filed a lawsuit against former employee, Tim Smitreski, and his new employer, Diversified. Diversified is best known for being a long-time, large lighting agent in the Philadelphia market, but in recent years has become what many consider to be the largest lighting agency in Northern New Jersey.
In 2020, Acuity Brands Regional Sales Manager, Tim Smitreski, signed a company stock award agreement that included some post-employment restrictive covenants (i.e. non-compete, confidentiality and non-solicitation provisions). The agreement paid out six-figure financial rewards, but also restricted Smitreski’s actions post-employment. Smitreski agreed not to use Acuity’s customer information if he left his job, not to speak to Acuity customers for two years and not to work for a competitor for one year.
Acuity alleged that Smitreski brazenly breached his written agreement by going to work for Diversified and soliciting lighting business from Acuity customers including large electrical distributor chains, Cooper Electric (Sonepar) and Turtle & Hughes. Acuity further alleged that Diversified had been intentionally interfering with the restrictive covenants in Smitreski’s agreement.
Both Diversified and Smitreski denied the allegations and the forthcoming settlement is expected to close the case in the coming months.