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Amazon (AMZN) Sues Former Vice President of Operations

Read MoreHide Full Article, Inc. (AMZN - Free Report) sued its former logistics and supply chain executive Arthur Valdez nearly a month after he joined Target Corp. (TGT - Free Report) .

The 16-year veteran of Amazon was until recently the vice president of operations overseeing the company’s international supply chain expansion. He was hired by Target in February as its chief supply chain and logistics officer and is due to adopt his new role next week.

Amazon sued Valdez on grounds that he has violated a non-competition agreement signed in 1999 and again in 2012 while working with the company. According to this agreement, Valdez was not supposed to get involved in competition with Amazon for 18 months immediately following his cessation of employment with the company.

In the lawsuit filed in Washington Superior Court of Seattle last Monday, the company claimed that "Mr. Valdez's new position with a key Amazon competitor will involve the disclosure and use of Amazon's confidential and proprietary information to Amazon's detriment and Target's advantage in a core area of competition between the companies: the cost-effective and rapid movement of goods in the most efficient way possible for retail customers."

The lawsuit is intended to prevent Valdez from assuming the new role at Target.

Amazon also claimed that Valdez has already shared trade secrets with Target and further disclosure of confidential information forms a part of his duties and responsibilities with his current company.

In response, Target spokeswoman Molly Snyder stated that the company has taken significant precautions to ensure confidentiality of proprietary information and the suit is without merit. Amazon’s spokeswoman Cheeseman declined to comment.

Target has been trying hard to revamp its food business and investing aggressively in online grocery sales. But the suit-file against Valdez appears to be a setback to its attempts to wrestle market share from giants like Amazon.

At present Amazon is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the broader technology sector are Travelport Worldwide Limited (TVPT - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Groupon, Inc. (GRPN - Free Report) , carrying a Zacks Rank #2 (Buy).

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