Dive Brief:

• Amazon on Monday filed a lawsuit against former executive Arthur Valdez, saying that his move to Target violates the terms of the non-competition agreement he signed when he began work at Amazon 16 years ago. 

• The filing alleges that Valdez “cannot lead Target’s supply chain operations without referencing confidential information learned and developed by him at Amazon to drive superior performance in exactly the same areas,” and asks the court to enforce an 18-month “time out” that prevents Amazon employees from working at competitors in similar capacities. 

• Formerly Amazon’s VP of operations, Valdez was slated to join Target on Mar. 28 as its EVP, chief supply chain and logistics officer.

Dive Insight:

From this filing, Amazon appears to have insider knowledge of why and how Valdez was hired at Target. “While interviewing with Target’s most senior executives, Mr. Valdez referenced not only core aspects of Amazon’s confidential information, training and expertise, but also the title and topics of a key analysis and strategy meeting Mr. Valdez was contributing to and participating in at Amazon,” the filing reads. “Mr. Valdez’s behavior at Target with respect to Amazon’s confidential information before being hired there highlights the injury to Amazon from Mr. Valdez’s work for Target if he works there.”

It’s unclear how Amazon is privy to such details, according to Geekwire’s report. Target and Valdez could not be reached for comment, the Wall Street Journal reports, and an Amazon spokesperson didn’t immediately return the publication's request for comment.

Geekwire adds that, while non-compete agreements are often readily enforced in Amazon's home state of Washington (where the Valdez suit was filed), courts in California and elsewhere look more askance at such limitations.

It's no surprise that Target would hire a veteran of Amazon, arguably e-commerce retail’s most efficient mover of goods. Target is on the record regarding its efforts to improve its supply chain logistics as it works to become a more nimble omnichannel retailer. The retailer also has instituted incentives and omnichannel efforts, which has boosted its e-commerce sales but led to some empty shelves in stores.

“While we’ve made significant progress in improving our operations, Target’s growth hinges on our ability to enhance the fundamental aspects of our business, starting with the supply chain,” Target COO John Mulligan said in a statement about the Valdez hire. “Arthur’s leadership and experience will be a tremendous asset as we continue to drive improvements in end-to-end processes, including leveraging our almost 1,800 stores to deliver a seamless experience for our guests.”  

To be sure, e-commerce is a complex and expensive proposition when it comes to fulfillment. Brick-and-mortar shoppers—pre-omnichannel, anyway—move products off the shelves and essentially fulfill their orders themselves. To ship a package, retailers must move goods onto shelves, off of shelves, into boxes and away, said Nick Egelanian, president of retail development consultants SiteWorks International.

“Selling on the Internet is expensive... the handling and the postage—and you’re talking about basic goods here where the margins are wafer-thin,” Egelanian told Retail Dive, adding "Amazon's not profitable" when it comes to e-commerce. Still, Egelanian says, retailers these days have to be where the customer is—online, on mobile, and in stores—and the result of those efforts can’t be empty shelves.