Christie's, the world's largest fine arts auction house, is on the receiving end of a $60 million lawsuit initiated by Heritage Auctions, in connection with three former Heritage employees and its ongoing attempts to expand its operations to include more high fashion accessories. Heritage, which happens to be the third largest auction house in the world (and the largest US-based house), alleges that Christie's poached, Matthew Rubinger, 26, its key Hermès expert, and two other former-Heritage employees (also in their 20's).
According to the Texas-based company's complaint, which was filed in Manhattan's Supreme Court on Friday, Rubinger breached his contract, stole the company's trade secrets, and joined Christie's. Moreover, Heritage claims that as the head of Heritage’s luxury accessories business, Rubinger (who was a recent college graduate when he joined Heritage in 2010) was provided with training and introduction to sources in Hong Kong and Japan; he was also given access to all of Heritage’s corporate plans for expansion and branding, even beyond luxury accessories.
Oh, and in case that's not enough, Heritage claims that in the week preceding his sudden departure, Rubinger, sought and received permission for one of the associates who departed with him to attend an executive meeting and gain access to confidential strategic plans.
Rubinger, and two other high-level associates, Rachel Koffsky and Caitlin Donovan, make up Heritage’s entire luxury accessories team, which Heritage launched in 2010. They announced their immediate resignation from the company on May 19th, after secretly accepting positions with London-headquartered Christie's.
Turns out, the three will be rolling out a luxury accessories department for the auction giant in Hong Kong. Koffsky joined Heritage in 2012 as a Cataloger & Consignment Coordinator before being promoted to Operations Manager of Luxury Accessories. Donovan joined Heritage in April 2013 and served as the company's Consignment Director.
Heritage, which is pursuing legal claims against Christie's and the three individuals, claims that "Christie's has attempted to seize for itself a windfall of millions of dollars in ill-gotten gains through these acts of unfair competition and unethical business practices." Additionally, the company alleges that Koffsky and Donovan “had no prior experience in the auction field” before Heritage hired and trained them, and that “they cannot perform their duties for Christie’s without using Heritage’s confidential information.”
According to Heritage's complaint, the flourishing designer handbag market has resulted in record sales, and is a category in which rival Christie's is seeking to expand. Gregory Rohan, the president of Heritage, held: “While other auction companies, including Christie’s, have held estate sales that might have a [Hermès] Kelly bag in it or had an online auction that sold a modest amount of handbags, we elevated the collection of handbags to a place nobody had done it before. We created a dynamic worldwide market that everyone would like to own.”
Heritage is seeking over $60 million in damages from Christie’s, Mr. Rubinger and two other former employees, as well as all of Christie's profits from its luxury accessories division through the end of 2016, in addition to other damages. More to come …