Nike is Suing Former Employees for Stealing Secrets, Joining Adidas

Nike, Inc. has filed a major lawsuit against three of its former senior shoe designers, accusing them of stealing its trade secrets before joining rival Adidas AG. You may recall that this past September, Adidas announced that Marc Dolce (formerly Nike's Global Design Director), Mark Miner (who was the Senior Global Footwear Designer at Nike), and Nike's former senior design director Denis Dekovic would staff its new Brooklyn Creative Studio (because its headquarters in Bavaria is a bit out of the way). 

The lawsuit, which was filed this week in the Circuit Court of the State of Oregon for the County of Multnomah, where Nike is headquartered, is seeking at least $10 million in damages, stemming from contract breaches, unfair competition, and violations of the Uniform Trade Secrets Act, the latter of which prohibits the misappropriation of information (including a formula, pattern, compilation, program, device, method, technique, or process) that derives economic value from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

In case that's not enough, Nike is alleging that Dolce, Miner and Dekovic began consulting for Adidas while they were still working at the company in violation of their non-compete agreements and plotting to cover their tracks after stealing a “treasure trove” of confidential information from the sportswear giant.

According to its complaint, Nike contends that the designers began plotting their departure last April, pitching their studio plan (one that Nike claims is merely a knockoff of its existing design studio, the Innovation Kitchen) to Adidas and subsequently bringing Adidas information about Nike's plans for the next several years in connection with its running, sportswear and soccer lines. Adidas reportedly loved the studio idea and as a result, offered the designers lucrative employment contracts to jump ship from Nike. The new Adidas project, called the Brooklyn Creative Design Studio, is set to open early next year.

Before leaving Nike, the complaint alleges that the designers copied sensitive design and business documents from their computers, including drawings for an unreleased shoe made for one of Nike's sponsored athletes. The suit further states that the designers tried to hide their tracks by erasing incriminating emails and text messages from their work-issued cellphones and laptops. And Adidas isn't exactly blameless in Nike's mind. Nike claims that Adidas knew of the non-compete agreements (which barred the three designers from any connection with Adidas during their employment and for one year after) and promised to pay for any legal fallout.

Given the fact that Nike has years worth of plans in place, it is a bit surprising that it is only seeking $10 million. More to come …