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Panera, ex-CEO and founder battling in court over potential hires, noncompete issue

February 27, 2019

Panera and its founder and ex-CEO, Ron Shaich, are in a court battle over Shaich's hiring of three Panera tech leaders, who had resigned in order to take positions with Shaich 's company, Act III Management LLC. The ex-IT executives are asking a Missouri federal court to dismiss Panera's lawsuit aimed at enforcing noncompete agreements.

The legal fight hinges on a settlement between Panera and Act III that could Act III to hire Panera employees, according to a Law 360 report. The plaintiffs claim the legal action is a forum-shop maneuver and that the issue should be heard in Delaware, the chosen forum, in the settlement reached, for hiring and noncompete disputes.

Shaich, who left Panera after 30 years in 2018, is financially tied to Panera competitors Tatte Bakery and Café, according to Law 360.

Act III filed a breach of contract suit in Delaware on Feb. 19 alleging Panera was not following a settlement deal that allowed Shaich to hire former Panera employees who signed noncompetes as part of their Panera employment.

In response, Panera filed a breach of contract suit two days later in Missouri alleging Act III was hiring the three tech leaders to gain access and insight to proprietary Panera technology information and seeking to dismiss the Delaware suit.