Eight years ago, three businessmen from Little Rock, Arkansas approached Wal-Mart with an idea they said could help big discount retailers improve their sales. Joe O’Banion, Leonard Hoffman and Michael McNew, told Wal-Mart that their concept involved offering credit to large customers, like schools, government agencies and big corporations. For a period of about 7 months, the three businessmen engaged in talks with Wal-Mart executives over their “concept”. According to the businessmen, Wal-Mart repeatedly told them they had a deal, and that it was being signed-off by Wal-Mart top management. But instead of a contract, Wal-Mart kept asking the trio for more and more details about their plan. No contract with the Little Rock businessmen was even signed. Instead, Wal-Mart unrolled a credit plan of its own based on the concept first developed by O’Banion, Hoffman and McNew. The three filed a lawsuit against Wal-Mart in April of 1999, and nearly one year later, a jury in Arkansas this week ruled that Wal-Mart stole trade secrets from the businessmen. The jury awarded the O’Banion Three a total of $31.7 million, plus 7 year’s interest on the money, for a total of nearly $50 million, according to the Associated Press. Wal-Mart said the information it may have used was neither confidential nor secret. But the Texarkana jury didn’t buy it.
O’Banion, Hoffman and McNew may have had dreams of becoming millionaires by working with Wal-Mart. Ironically, they may now become millionaires by working against Wal-Mart. You won’t see any Wal-Mart TV ads about the “O’Banion Three”, but the case helps shed light onto the corporate ethics and behavior that goes on behind the Wal.
