Walmart Sues Its Former Head of Tax for Jumping to Amazon
Walmart Sues Its Former Head of Tax for Jumping to Amazon
(Bloomberg) -- Walmart Inc. sued its former chief tax officer for violating her employment agreement by defecting to online rival Amazon Inc., the latest broadside in the slugfest between the two retail giants.
Lisa Wadlin, Walmart’s senior vice president and top tax executive, wrongfully left the Bentonville, Arkansas-based chain last month to move to Amazon’s headquarters in Seattle, Walmart officials said Wednesday in a lawsuit. They’re seeking to stop Wadlin from taking the Amazon position until May 2020 and bar her from handing over “sensitive business information obtained at Walmart.”
“Wadlin’s pursuit of employment with Amazon eviscerates the contractual terms Walmart bargained for’’ in her employment pact, Walmart’s lawyers said in the Delaware Chancery Court lawsuit. Walmart said it’s seeking to protect its rights to lawfully restrict “senior employee’s ability to work for its direct competitor.’’
Over the past three years, Walmart spent billions to revitalize its once-moribund web unit, expanding delivery options, hiring fresh talent and making acquisitions in hopes of catching up to Amazon, the U.S.’s largest online retailer. While sales soared, the spending has taken a toll on profitability. When the company reported slowing online growth and disappointing margins during the critical 2017 holiday quarter, investors pummeled the stock.
Wadlin replied to a request for comment in a message on LinkedIn, writing: “No comment.” Randy Hargrove, a Walmart spokesman, said the company sued as a defensive measure. “We take our obligation to protect the company seriously,” he said in an interview.
Ty Rogers, an Amazon spokesman, didn’t immediately respond to an email seeking comment. Amazon is not named as a defendant in the case.
Wal-Mart Ends Worker-Raiding Suit Against Amazon.com
It’s not the first time a Walmart executive has sought to defect to Amazon. In August 1997, Amazon appointed former Walmart information systems vice president Richard Dalzell to the position of chief information officer. Walmart sued alleging the online retailer was targeting its tech workers to pick up secrets about its computer systems. The companies later settled.
Walmart officials said Wadlin was deeply involved in the company’s mergers-and-acquisitions planning and played a critical role in its purchase of a controlling stake in Flipkart Online Services Pvt. That company is India’s e-commerce leader. Amazon had been vying with Walmart for the firm.
Wadlin “had access to Walmart’s highly confidential and sensitive business information and strategies,” the chain said in the complaint.
A former employee at the accounting firm of Ernst & Young, Wadlin joined Walmart in 2011. She lists Amazon as among her interests on her LinkedIn profile as well as her alma mater, the University of Virginia.
Wadlin let her superiors know in January she was contemplating a job change and Walmart offered her a severance package that included two years’ pay if she agreed to serve as a consultant during a transition period, the retailer said.
The tax executive asked Walmart to waive her non-compete restrictions, but the company refused, according to the lawsuit. Walmart learned from a separate court action that Wadlin had been telling people she was no longer employed by the chain and she’d “obtained employment, that would require her to relocate to Seattle,” according the filing.
The case is Walmart Inc. v. Wadlin, No. 2018-0414, Delaware Chancery Court (Wilmington).
To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;Matthew Boyle in New York at mboyle20@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider, Paul Cox
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