Panera sues former executive, Papa John's over trade secrets

AP News
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Posted: Jul 20, 2016 3:07 PM

ST. LOUIS (AP) — The restaurant chain Panera filed a lawsuit Wednesday alleging that a former executive who left to go to work for pizza chain Papa John's took trade secrets with him.

The lawsuit against former Panera executive Michael Nettles and Louisville, Kentucky-based Papa John's International says Nettles worked for four years as a vice president in Panera's information technology department, with access to highly sensitive confidential and proprietary information and trade secrets. He began work for Papa John's on Monday, and suburban St. Louis-based Panera says Nettles' new position violates a confidentiality and non-compete agreement.

"Allowing Nettles to use this confidential information for the benefit of Papa John's provides Papa John's with an unfair competitive advantage, and would allow Nettles to unlawfully compete with Panera," the suit says.

Papa John's noted that Nettles is a 27-year veteran of the hospitality and retail industries and has worked at several companies with numerous concepts.

"We are disappointed by Panera's actions, as we do not consider them a competitive business," Papa John's said in a written statement. "We have no need or desire to access Panera's confidential or proprietary information."

Panera, with more than 2,000 restaurants in the U.S. and Canada, is known for its soups, salads, sandwiches and bakery items. Papa John's is one of the world's largest pizza chains, with more than 4,900 locations in 37 countries.

But the lawsuit, filed in U.S. District Court in St. Louis, says Panera and Papa John's compete in small order delivery and catering.

"Panera's very right to compete fairly in the market place is threatened," the lawsuit states.

A message seeking comment from Panera was not immediately returned.

In addition to damages, the lawsuit asks the court to prohibit Nettles from working for Papa John's for at least a year, to prohibit him from disclosing Panera's confidential information, and seeks other relief.