CLAYTON -- One of the two Clayton recycling companies embroiled in a lawsuit denies allegations it created unlawful competitive advantages for itself. Meanwhile, the legal spat is stalling the town’s effort to win a state grant to help the newer company.
Source Recycling, an industrial recycling firm based in Baltimore, opened its Clayton operations June 18. That same month, Wise Recycling filed a civil complaint accusing three former employees of orchestrating a mass departure of Wise employees to join the new business. The complaint also accuses the men of taking advantage of their access to proprietary information to create a competitive advantage for the new company.
The litigation is jeopardizing a grant request by the town of Clayton.
The town is seeking $469,000 from the Rural Center to build a road and install water and sewer lines to serve Source Recycling, which is located in South Tech Industrial Park off Pony Farm Road.
Source has since filed a response to Wise’s claims denying all allegations. Source says that its employees left Wise Recycling in good faith when they saw an opportunity to run their own business. If other employees happened to follow them, they did so out of personal loyalty or an interest in the new opportunity, Source says.
Wise’s complaint names Source Recycling as a defendant, along with former Wise employees Gary Taylor, Jody Shandley and John Stewart. It claims the three men worked in concert to lure employees away from Wise Recycling for jobs with Source.
The claim filed in Johnston County Superior Court says that since June 15 – the day Taylor, Shandley and Stewart quit their jobs – 16 other full- and part-time employees have left the company to take jobs with Source Recycling. That represented about 50 percent of Wise’s Clayton workforce.
“For the record, the lawsuit is complete and total fabrication,” said Source Recycling Chief Executive Greg Rochlin. “These guys who we hired did not talk to one employee before they left; they didn’t talk to one customer before they left. They were absolutely by the book.”
Rochlin added that the employees had no non-compete agreements with Wise Recycling.
The grant the town is seeking is built on the expectation that Source Recycling will bring new jobs to Clayton, creating 30 new jobs in the next two years.
Andrew Logsdon, president of Wise Recycling, said he believes the three defendants’ goal was to lure away all of Wise’s employees, thereby transferring jobs from one company to another rather than creating new ones.
“They literally made offers to all but one or two of our employees to go work for them and not show up for work that following Monday with no notice, so our contention is that their objective was to have it where we had no employees, and that was after having filed the application for the grant for new jobs,” Logsdon said.
Logsdon says the defendants failed in their mission; that Wise ended up keeping a little more than half of its employees. But Wise is hiring new employees to replace those who left, which could be viewed as creating new jobs.
Although the lawsuit is keeping the Rural Center from reviewing the grant application, Gary Curtis, Source Recycling’s executive vice president, says the new road and the water and sewer lines would be more of a benefit to the town than they would be to Source Recycling.
“We’re fully operational, and we’re able to give our customers 100 percent of the service they expect,” Curtis said. “It’s probably more valuable to the city and South Tech industrial park, because it would make that piece of property more marketable to other businesses.”