Niwot-based Crocs sued by rival Dawgs over corporate sabotage allegations

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Suit alleges computer fraud involving a Zulily account

By Shay Castle | Staff Writer

The battle between two makers of molded shoes is getting ugly as a competitor to Niwot-based Crocs (Nasdaq: CROX) is alleging corporate sabotage. The suit, filed in U.S. District Court in Nevada on Thursday, named Crocs and three of its employees as defendants.

Nevada-based Dawgs has filed suit, claiming a Crocs employee — a recent transfer from discount e-commerce platform Zulily — accessed a private account and convinced Zulily to remove products from a planned sale of Dawgs’ footwear, costing tens of thousands of dollars and violating the Computer Fraud and Abuse Act.

Crocs provided a statement in response to inquiries: “This recent complaint filed by USA Dawgs is another in a history of frivolous claims,” it read. “We are confident that this most recent complaint will be disposed of in a manner similar to the previous merit less claims filed by USA Dawgs.”

Dawgs alleges in the suit that on Nov. 8, 2016, Crocs’ Seattle-based key account manager Kim Lawrie emailed Zulily about a planned Dawgs sale, seeking to remove products that were “Crocs knock offs.” In that exchange, the complaint claims, Lawrie wrote in a subsequent email to Zulily, “I can actually get into their event,” implying that she had access to Dawgs’ private account.

Dawgs maintains its Zulily account was private and password-protected, and that Lawrie accessed information on Dawgs’ products, pricing and sales event using “dishonest means, false pretenses and/or confidential information she learned while employed at Zulily.”

Lawrie left Zulily for Crocs in June 2013. She did not respond to a request for comment.

Katharine Hartman, a partner at Dilworth Paxson in Philadelphia, said The Computer Fraud and Abuse Act is a criminal statute, but is often used in civil cases. Violations of the statute can create exposure to civil liability and criminal penalties.

A search of federal court databases revealed no criminal charges against Crocs, Lawrie, Rufer or Gray relating to this matter.

Two Crocs supervisors allegedly copied on Lawrie’s email exchange with Zulily were also named as defendants in the suit. Erik Rufer, also of Seattle, wholesale channel director for U.S. e-commerce, did not respond to an emailed request for comment. Kelly Gray, former director of American corporate sales and now with Boulder-based Sphero, according to her LinkedIn profile, could not be reached for comment.

Following correspondence with Lawrie, an unnamed Zulily employee then instructed another to remove any “Crocs knock offs” from Dawgs’ sale, according to court filings. The same day, Nov. 8, Zulily informed Dawgs it would not sell any molded clog footwear products that compete directly with Crocs.

Zulily, which runs limited-time sales on clothes, home goods and toys, was purchased by Englewood-based Liberty Interactive Corp. for $2.4 billion in August 2015. Officials for Liberty, which also owns QVC, did not respond to requests for comment.

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