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It was just a week ago that Unified Grocers announced that it had hired Leon G. Bergmann, the former president, independent business at Supervalu, to be its new senior vice president of sales.

Not so fast, said Supervalu, which claims that Bergmann signed a non-compete agreement, which prevented him from working for Unified, with which Supervalu competes in the western US. Supervalu now is suing to prevent Bergmann from taking the job.

The Minneapolis/St. Paul Business Journal reports that "Supervalu filed a lawsuit in Hennepin County District Court after the announcement and sought an order barring Bergmann from working for his new employer or otherwise violating his confidentiality agreement and a 12-month non-compete. The breach-of-contract suit also accuses Unified Grocers of intentionally interfering with the agreements."

Unified Grocers said it will respond to the suit at "the appropriate time," but reportedly has sued Supervalu "to invalidate the non-compete agreement."

The Business Journal continues: "In its suit, Supervalu said Bergmann's new position will put him head-to-head with Supervalu in California and the Pacific Northwest, where Unified Grocers is one of Supervalu's 'fiercest competitors.' Supervalu's lawsuit said Bergmann will inevitably 'exploit his extensive knowledge' of Supervalu's pricing, strategy and customer information to compete with Supervalu."

Two other interesting notes from the story:

• When Bergmann resigned from Supervalu, he wrote "in his resignation letter to Supervalu CEO Wayne Sales that he had lost confidence in the company's turnaround efforts."

• Supervalu "has taken additional steps to hold onto its top managers. This summer, it offered stock options and retention agreements worth up to $750,000 with four executives, including Herkert and Chief Financial Officer Sherry Smith. Bergmann wasn't one of the executives."

Supervalu is not expected to stop the hiring of Sue Klug, formerly President, Southern California Division, of Supervalu-owned Albertsons, who has been hired by unified to be its Senior Vice President and Chief Marketing Officer. (She did not work for Supervalu corporate and had been gone from the company longer.)
KC's View:
Hard to know what to make of this, since there are so many conflicting signals. One certainly could not blame Bergmann for wanting to get off a ship he thought was sinking, though the implication is that he may have been upset by the fact that when they were handing out the life preservers, he didn't get one.

It also could be argued that whatever Bergmann knows about Supervalu's strategies, the chief advantage would be his ability to tell Unified to do something else. Anything else.

In addition, there's the whole issue of non-compete clauses ... some of which get enforced, and some of which do not. (Could it be argued that since Supervalu tends not to be very competitive, moving to Unified doesn't really mean Bergmann is competing with Supervalu?)

In the end, though, there may be a signature on a legal document, and that could be that.

Maybe they'll all come to some sort of negotiated agreement. Then again, maybe nerves are all too raw, and Supervalu needs a win somewhere, even if only in court.