J.C. Penney Co. has recently been heavily marketing their new image as a place to shop for fair and square deals. No gimmicks, they say. Part of their new image involves a new branding campaign for their stores that includes large square display cases. One visual display company, however, is claiming that J.C. Penney Co. is in breach of contract and stole trade secrets from the display company.
The square at the center of this case consists of an oversized LED square fixture made out of Plexiglas. The cases were to be installed in a Manhattan, New York, store as well as other locations. The merchandising company that was hired by J.C. Penney, called Hudson + Broad, claims that they designed and were prepared to manufacture over 1,800 cases. They had already manufactured over 1,800 remote controls that are needed to control the lighting in the squares.
After this work was done, Hudson + Broad claims J.C. Penney cancelled the order. They were told that the clothing company would be getting the cases from another manufacturer. Sources say that Hudson + Broad workers were shocked because it was their understanding that if J.C. Penney approved the design, they would purchase the item through Hudson + Broad.
By going to another party for the product, Hudson + Broad spokespeople claim that J.C. Penney violated the terms of their contract and stole their proprietary product. They filed a lawsuit requesting $20 million in punitive damages and $20 million in compensatory damages.
Despite their efforts to portray their new "fair and square" image, executives at J.C. Penney allegedly admitted in emails that they knew cancelling their order with Hudson + Broad would be a big hit to their image. If a judge rules that J.C. Penney was not playing fair, the merchandising company could receive substantial compensation.
Source: The Dallas Morning News, "J.C. Penney sued by maker of its 'fair and square' store fixtures," Maria Halkias, April 25, 2012