wedi Corp. Commences Arbitration Against Former Sales Representative.

August 10, 2015 | By Business Wire News

CHICAGO

wedi Corp. (“wedi”), the distributor of wedi® Building Panels and Shower Systems, announced that on July 16, 2015, it commenced arbitration proceedings in Chicago, Illinois, against Brian Wright (“Wright”), a former wedi regional sales representative, and his company Sound Product Sales L.L.C. (“Sound Product”). wedi’s arbitration complaint alleges, among other things, that Wright and his company breached their contractual and fiduciary duties owed to wedi under an agency agreement while Wright was still employed by wedi.

wedi’s arbitration claims were originally filed as part of a lawsuit brought by wedi Corp. in May 2015 against Wright, Sound Product, and Hydro-Blok USA, LLC (“Hydro-Blok USA”), another company owned and controlled by Wright, in the United States District Court for the Western District of Washington entitled wedi Corp. v. Brian Wright, et al., Case No. 2:15-cv-00671. wedi’s claims relate to Wright’s and his companies’ activities in assisting, promoting, and ultimately selling certain shower system products made in China and recently imported into the United States by Hydroblok International, Ltd. (“Hydroblok”), a Canadian company. Wright attempted to have all of wedi’s claims against him and his co-defendants dismissed and sent to arbitration, but the Court ruled that only some of the claims were arbitrable and denied Wright’s request to dismiss or stay the non-arbitrable claims. In June 2015, wedi filed related claims against Hydroblok as counterclaims in an action pending in the same District Court in Washington entitled Hydroblok USA LLC, et al. v. wedi Corp., et al., Case No. 2:15-cv-00615.

In addition to alleging contractual, fiduciary, and conspiracy claims relating to Wright’s alleged activities while still employed by wedi (including allegations that Wright contacted wedi customers to promote Hydroblok products while still an agent for wedi), wedi alleges that Wright, Hydro-Blok USA, and Hydroblok use false or misleading statements in promoting their products that misrepresent the nature, characteristics, and qualities of Hydroblok products and wedi products. Among other things, wedi alleges that Hydroblok’s claims in its advertising that it offers “The BETTER Shower System” are false and materially misleading in violation of the federal Lanham Act’s prohibition against false advertising, 15 U.S.C. §1125(a). wedi also alleges violations of the Washington Consumer Protection Act, RCW 19.86.020, and tortious interference with wedi’s contractual and business relationships with its customers and potential customers.

“Although fair and honest competition is the cornerstone of our free market system, the use of false statements and misleading comparisons in the promotion of one’s own products is prohibited under the law,” said Daniel J. Becka, wedi’s counsel in the litigation matters. Bastian Lohmann, wedi’s National Sales Director, explained: “wedi has spent considerable time and effort in educating and servicing our customer base to whom we are proud to offer our high quality, tested and certified waterproof, brand foam shower systems and backerboards that wedi pioneered based on a patented manufacturing process invented by the late Helmut Wedi. We are in the process of investing in full-scale, U.S. based manufacturing using our same high quality manufacturing standards and do not take lightly others who may try to piggy-back on wedi’s success through the use of false or misleading statements to our customers and the market in general. While we regret that some of wedi’s customers have been ‘put in the middle’ of our disputes with Brian Wright and Hydroblok, we feel forced to take action to defend our good name and the reputation of our products against those we believe to be engaging in unfair competition and false advertising employing such tactics. ” Mr. Lohmann added: “We take action to protect our product users, our good competitors, and wedi.”

wedi’s arbitration complaint is not publicly available. Copies of wedi’s Amended Complaint against Wright, Sound Product, and Hydro-Blok USA in Case No. 2:15-cv-00671, and its Counterclaims against Hydroblok in Case No. 2:15-cv-00615, may be obtained from the U.S. District Court, Western District of Washington, Clerk’s Office, 700 Stewart Street, Suite 2310, Seattle, Washington 98101, 206-370-8400.