Hooters restaurant chain files federal lawsuit claiming competitor stole info
By Kluger, Kaplan, Silverman, Katzen & Levine, P.L. October 3, 2011
Both Hooters and Twin Peaks are known for scantily clad women serving casual food, but there’s nothing sexy about the documents that Hooters claims their former executive took to help the competition. Read the full story here.
By Associated Press, Published: September 30
ATLANTA — The Hooters of America restaurant chain filed a federal lawsuit in Atlanta this week claiming that a former executive swiped mounds of documents to help an upstart competitor that plans to expand the Twin Peaks franchise.
The lawsuit filed in U.S. District Court in Atlanta on Wednesday said former Hooters vice president Joseph Hummel downloaded reams of “sensitive and highly confidential business information” to help La Cima Restaurants, an Atlanta-based firm that plans to help build 35 Twin Peaks stores across the Southeast.
Both chains are known for scantily clad women serving casual food, but there’s nothing sexy about the documents that Hooters claimed Hummel took. The lawsuit claims that Hummel downloaded marketing plans, contract agreements, recruiting tools and sales figures before and after he left the company to join La Cima on July 22.
“The casual dining industry operates on extremely thin profit margins,” it said. “As a result, every operational advantage … is a jealously guarded business secret.”
Hummel, who is now La Cima’s chief operating officer, did not immediately return calls seeking comment. Shannon Glaser, a Twin Peaks executive, said the company declined to comment on the litigation.
Atlanta-based Hooters is known across the globe for its beach-themed restaurants staffed by attractive “Hooters Girls” who often look more like cheerleaders than waitresses. The chain, founded in Florida in 1983, has 455 locations across the globe, including 67 in its stronghold in the Southeast.
Twin Peaks, headquartered in Addison, Texas, is an upstart rival with big ambition. The company has 15 snow lodge-style restaurants scattered across the Midwest, and in August it announced an agreement with La Cima to open 35 more franchises in Alabama, Florida, Georgia, North Carolina and South Carolina.
La Cima is a sore spot for Hooters managers. The company was formed in June by former Hooters chief executive Coby Brooks, who lured Hummel and other ex-Hooters officials to the startup within weeks, the lawsuit said.
Hummel, who was Hooters’ executive vice president of operations and purchasing, was privy to the company’s most highly classified information and had “unequaled access to the company’s most sensitive business information, data and documents,” it said.
On July 2, days before Hummel told Hooters of his plan to leave, the executive downloaded the first batch of documents, the company said. Even after his last day, Hummel was still able to download documents from company servers and transmit them through his personal email account because the company forgot to block his access, it said.
All told, the lawsuit said, Hummel took “well over 500 pages of highly sensitive business information and trade secrets” from Hooters.
“La Cima now possesses a wide variety of trade secrets and other confidential and proprietary business information belonging to (Hooters) — information that will endow a competitor like La Cima with significant competitive advantages,” the lawsuit said.
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Copyright 2011 The Associated Press.