Retail giant Walmart has been ordered to pay $222 million to technology start-up company Zest Labs over a trade secret misappropriation.
Zest Labs claimed that the retailer stole its supply chain technology that extends fresh produce’s shelf life after entering into a non-disclosure agreement.
The start-up tech company first filed a lawsuit in 2018, which claimed that Walmart deployed supply chain systems that functioned similarly to Zest Labs’ technology.
Gary Metzger, manager of Zest Labs, commented: “Zest’s technology has the potential to reduce approximately 30-33% of waste of perishable foods in half.
But Walmart’s misuse of Zest’s trade secret has hindered our ability to achieve the necessary scale to make a substantial impact and help feed the world.
“This legal victory is a small but crucial triumph for small businesses that often face exploitation by larger corporations, robbing them of the opportunity to bring their innovative solutions to the market.”
Walmart is set to pay the company $72.7 million in compensatory damages and $150 million in exemplary damages according to the jury’s official verdict. However, Walmart is set to appeal the decision moving forward.
A Walmart spokesperson emailed a statement to Retail Dive: “We strongly disagree with the verdict and believe it’s not supported by the facts. Zest Lab’s unethical behavior has compromised the integrity of this case from the start.
“We expect our suppliers to uphold the highest ethical standards and will continue to advocate for fairness and justice.”
In addition to the news, the retailer is facing mounting pressure from tariffs and warned US shoppers of price increases.
Walmart is also expanding its use of automation in its stores to improve its physical store operations and e-commerce business.
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