Former Employees Targeted in Houndstooth Suit

Former Employees Targeted in Houndstooth Suit
Houndstooth Clothing Co. store location at 29 N. Block Ave. in Fayetteville (Google Maps)

Houndstooth Clothing Co. Inc. of Fayetteville filed for an injunction in Washington County Circuit Court against its former sales manager and two sales assistants claiming the trio took proprietary customer information with them when they left the company earlier this year.

In a suit filed by attorney Todd Lewis of Conner & Winters LLP in Fayetteville, Houndstooth asked for a temporary and permanent restraining order against Justin Laughlin, Lauren Russell and Leigh McGruder. Houndstooth also named Back Forty Press LLC and Laughlin Enterprises LLC as defendants.

Laughlin, the former sales manager, was Russell’s and McGruder’s supervisor at Houndstooth, which sells custom-made T-shirts, mostly to universities’ Greek organizations nationwide.

Houndstooth said in the filing that Laughlin’s salary averaged $186,000 for the last five years, including $274,000 in 2016.

Houndstooth said that a year before Laughlin resigned, he met with ownership to discuss buying shares in the company and asked for Houndstooth’s financial information before making a decision. He did not buy any shares, and Houndstooth alleges he used the process to gain access to the company’s financials.

Houndstooth said Laughlin resigned, with no notice, on Jan. 26. Russell and McGruder, along with three other employees, resigned from Houndstooth on Jan. 29 and told people they were going to work for Laughlin at Back Forty Press.

Before Laughlin resigned, Houndstooth said, he was in contact with the owner of Back Forty Press, Lance Stokes. Stokes and his wife, Lauren, are the founders of The Lauren James Co., a women’s apparel company, in Fayetteville.

Laughlin’s LinkedIn profile lists him as the co-owner of Back Forty Press, a screen-printing apparel company.

Houndstooth said it had a computer program called Sales Force for its confidential customer contact information. Laughlin, Russell and McGruder all had access to the program and the information as part of their jobs with the company.

Houndstooth alleged in the suit that the three former employees used information obtained from Sales Force to contact customers to drum up business for Back Forty and Laughlin Enterprises LLC, which Laughlin started and which does business under the names of Jamison Pointe and Emerson Coast. Houndstooth said the customer contact and other confidential information would not be easily available without Sales Force data.

Houndstooth said all three former employees erased information from company-owned cellphones and reset them to factory settings when they resigned.

Houndstooth said the defendants violated the Arkansas Theft of Trade Practices Act, committed breaches of fiduciary duty and duty of loyalty and tortious interference with business expectations and contractual relationships, among other allegations. The clothing company asked the court for temporary and permanent restraining orders against the defendants and to force them to return all information obtained from Houndstooth and prevent the defendants from contacting Houndstooth customers or employees for one year.

Houndstooth also asked for compensatory and punitive damages from the defendants for any benefits resulting from using Houndstooth’s confidential information.