Victoria’s Secret Stores, Inc. v. May Department Stores Co.

Mark Weikel was employed as the chairman of May Department Stores Company (May) (defendant). Weikel signed an employment agreement with May that prohibited Weikel from working at a competing business for two years after Weikel’s employment ended. Within the agreement, the term competing business was defined as (1) a retailer of the same type of goods sold by May with a sales revenue of $25 million or (2) any business in material competition with May. Victoria’s Secret Stores, Inc. (VSS) (plaintiff) offered Weikel a job as VSS’s chief operating officer. Weikel asked May for permission to take the job, but May would not acknowledge whether or not VSS was considered a competitor. VSS brought an action for declaratory judgment seeking a determination that Weikel’s employment would not violate the employment agreement. The trial court held that Weikel would not violate the employment agreement by working for VSS, because May and VSS were not competing businesses. The court reached this conclusion because VSS sold intimate apparel and 97 percent of May’s sales were in other product categories. Additionally, the type of information that Weikel learned while employed at May, such as weekly or monthly sales reports, would not unfairly advantage Weikel’s new employer. Lastly, the companies had different marketing strategies, and May’s market-share report, which identified its competitors, did not mention VSS. May appealed.