By Daniel Wiessner
ALBANY N.Y. (Reuters) - Christie's Inc is being sued for more than $40 million by a rival that says the famed auction house poached employees from its highly successful luxury goods division after allegedly struggling to create a version of its own.
Texas-based Heritage Auctioneers & Galleries said in a suit filed Friday in New York state court in Manhattan that the three employees, all of whom worked in its recently established luxury accessories department, defected to Christie's last month despite being under contract until the end of this year.
Heritage said that since its launch in 2010, the luxury goods division had become the most successful of its kind in the world, with the company projecting nine-figure sales in future years.
"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," the complaint said.
Heritage also claimed the workers shared the company's trade secrets with Christie's, which it said had "struggled" to expand its handbag business into a larger luxury accessories division.
Heritage is seeking all of Christie's profits from its luxury accessories division through the end of 2016, as well as other damages.
A representative for Christie's who asked not to be named said the allegations were without merit.
"We are prepared to vigorously defend these claims and Christie's decision to expand our existing handbag department," the representative said.
In the suit, Heritage said that in 2010 it hired recent college graduate Matthew Rubinger to spearhead a new department that specialized in high-end fashion accessories, such as designer handbags. The company invested large sums promoting Rubinger as "a star" in the industry, it said, and granted him access to its long-term business plans.
Rubinger was paid $340,000 in salary and bonuses last year, according to the suit, and was poised to earn even more this year.
But last month, Heritage said that Rubinger secretly accepted a job from Christie's in Hong Kong rolling out a luxury accessories department for the auction giant. Rubinger also convinced two of his colleagues to defect, according to the suit.
The case is Heritage Auctioneers & Galleries v. Christie's Inc, New York State Supreme Court, New York County, No. 651806-2014.
(Reporting by Dan Wiessner; editing by Ted Botha and G Crosse)