Poaching Logistics Talent and Supply Chain Lawsuits

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Over the course of the past several years, there has been an increasing number of logistics professionals that have been recruited away from one company to another. During this same time period, there has been something close to a revolution within supply chain logistics world.

The stark reality is that in recent times the manner in which an ever growing number of consumers purchases goods has been evolving. This has necessitated an associated change in supply chain mechanics and logistics. Many companies have taken to developing what they consider proprietary approaches to their logistics and supply chain systems. Amazon is an example of such an enterprise.

Another keen reality is that those individuals that have been involved in developing new logistical approaches to managing supply chains have become golden commodities in and of themselves. These individuals have become the targets of corporate poaching, with increasing regularity.

As an increasing number of logistics professionals, with expertise in supply chain design, dynamics, and operations, are recruited away from businesses, those enterprises that felt they had been inappropriately poached have started to fight back. They have started to fight back by filing lawsuits.

Amazon Versus Target

As mentioned a moment ago, Amazon is an example of a company that has been heavily involved in reworking its supply chain. Amazon is an enterprise that does consider some of its logistical developments to be proprietary information. As a consequence, the company has taken a very dim view to those instances in which members of their logistics team are recruited away by other companies.

One must keep in mind that not only does a company like Amazon have a concern about losing control over what it considers to be proprietary data regarding chain supply issues, an enterprise like the largest online retailer on the planet has also invested money in particular employees, and also in developing new supply chain systems. Simply, a company like Amazon is understandably unwilling to essentially foot a part of the bill in regard to another company’s effort to refashion its supply chain. This becomes particularly troublesome for a business like Amazon when it feels its competition is taking advantage in this manner.

As a result, in early 2016, Amazon filed a lawsuit against one of its former executives that departed the company and went to Target Target. This was a clear salvo by a retail giant to take firm action in an effort intended to stop poaching of employees involved in supply chain issues.

Other Companies

Amazon does not stand alone when it comes to taking acting to prevent the poaching of logistics experts. Another lawsuit that captured attention is one involving logistics provider C.H. Robinson Worldwide. That company sued XPO Logistics Inc., claiming XPO poached talent. As that case progressed, XPO itself was sued by R+L Carriers. R+L Carriers brought forth a claim regarding talent poaching in its lawsuit against XPO. An ever increasing number of lawsuits of this nature are expected to be filed and pursued during the coming few years, likely even longer.

The Undercurrent of Poaching Lawsuits

Underpinning these poaching lawsuits is a recognition by these companies that logistics know-how is a crucial commodity. Running a tight, efficient — really, flawless — supply chain is becoming increasingly central to a company like Amazon maintaining a competitive advantage in the marketplace. This includes the full spectrum for supply chain related issues, including everything from warehouse design to inventory management to actual distribution to a wide array of other functions and issues.

Amazon is particularly susceptible to poaching of its logistics talent. Moreover, Amazon is an example of a company least able to withstand ongoing poaching.

Amazon has been successful in no small way than because it sacrifices margins to a considerable degree to sieve a significant market share. Amazon has one over customers through its pricing, but also because of its rapid order fulfillment. The company accomplishes this via a network of highly automated fulfillment centers at strategic locations. The company has also fostered a strong relationship with an effective network of key transportation providers.

The bottom line is that companies like Amazon have been challenging and changing longtime business practices in certain industries, like transportation. Companies like Amazon bear the cost and the risk associated with challenging the status quo in this manner. As a result, Amazon and some other enterprises are highly protective of the strategies they have developed. And, litigation is proving to be the only course they feel they can take to protect their interests.