US Postal Service hit with trade secrets suit
Contractor claims the US Postal Service stole its confidential business knowledge | The USPS accused of wrongfully terminating contract.
The US Postal Service (USPS) is facing a lawsuit over the alleged misappropriation of trade secrets from a third party reseller which it then allegedly used to build its own competing e-commerce platform.
Filed on Friday, 23 September at the US District Court for the District of Utah, the complaint said that Express One was a third-party reseller that contracted with the postal service to market USPS’s services.
According to the suit, the USPS devised a plan to convince Express One to share its confidential customer, pricing and business information so that the USPS could develop its own competing platform.
“The ultimate goal was to implement a competing USPS platform, terminate the reseller program, including Express One’s reseller contract, and take control of Express One’s business and profit margin,” alleged the complaint.
In May this year, USPS announced the launch of its new e-commerce platform USPS Connect eCommerce.
Two months later, in July, the USPS sent Express One written notice that it was terminating their reseller contract effective from September 30.
Express One said it had attempted to appeal against the termination with the USPS’s Pricing & Classification Services Center, but the appeal was denied.
“The USPS’s decision to discontinue the reseller programme and terminate Express One’s reseller contract, together with the USPS’s misappropriation and misuse of Express One’s confidential business information, if allowed to stand, will not only cost Express One hundreds of millions of dollars in damages, but will force the company out of business altogether,” said the suit.
Express One said that it had invested a massive amount of time, effort and resources establishing relationships with its platform partners and building its reseller business.
This investment, said Express One, had driven billions of dollars in revenue to the USPS—over the last 12 months, Express One said it had driven over $3 billion of business to the USPS through its reseller network.
Express One said that it has begun to suffer irreparable harm as “platform partners and customers have learned about the USPS’s decision to discontinue the reseller programme and terminate Express One’s reseller contract”.
It said: “The USPS’ decision to discontinue the reseller programme and terminate its 2019 contract with Express One, if allowed to stand, will not only cost Express One hundreds of millions of dollars in damages, but will force the company out of business altogether.”
Express One has asked the court for damages (which it believes to be in excess of $500 million) and injunctive relief.
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