Update (11/19/20): The lawsuit between Hydrate IV Bar and Elite Hydration, along with other parties, was dismissed Nov. 10 after a settlement was reached.
Attorney Alan Schindler of Timmins LLC, who represented Hydrate IV Bar, told BusinessDen the settlement involved Elite Hydration making a payment to Hydrate IV Bar.
Original story: Hydrate IV Bar isn’t finding one of its competitors too refreshing.
The Denver-based IV therapy chain filed a lawsuit Feb. 20 claiming trade secrets were shared with its competitor Elite Hydration Inc. — which operates as Elite IV Lounge — by two former employees and two former members, all of whom work at or partially own Elite.
Defendants Jessie Russell and Emily Mantler were managers or employees with Hydrate until February 2018 and last July, respectively, and now both work at Elite, according to the lawsuit.
Defendants Henry Pool and Theodore Danielson are identified as former Hydrate customers who are now the owners of Elite, which is also named as a defendant.
“We have reviewed the allegations in the lawsuit and believe they are completely without merit,” said Sterling Leboeuf, a lawyer with Davis Graham & Stubbs representing Elite. “Elite intends to aggressively defend itself in this matter.”
Attorney Alan Schindler with Denver-based Timmins LLC, who is representing Hydrate, declined to comment. The lawsuit was filed in Denver District Court.
Hydrate, owned by Katie Wafer, has four locations in Colorado: Boulder, Highlands, Cherry Creek and Bonnie Brae. The company’s first location opened in April 2016.
Elite started in 2018 in an Airstream trailer that traveled to meet customers in and around Denver. Now it has three brick-and-mortar locations in Denver, Littleton and Breckenridge.
IV therapy businesses hook customers to an IV that drips varying mixtures of saline, vitamins, minerals and antioxidants directly into the bloodstream. The concoctions generally are marketed as benefiting those with maladies such as a hangover or altitude sickness, or simply individuals in need of a boost.
Russell was hired as a head nurse at Hydrate and signed an independent contractor agreement in September 2016. Her contract forbade her from attempting to solicit business from Hydrate, or competing directly or indirectly with Hydrate or its successors within 25 miles of Hydrate business locations.
Russell, Pool and Danielson founded Elite in February 2018, one day after Russell resigned from Hydrate, according to the lawsuit.
The lawsuit argues Russell violated her contract with Hydrate because she works for a competitor within 25 miles of a Hydrate location.
Mantler signed a contract similar to Russell’s in October 2017 when she was hired to perform nursing services at Hydrate, according to the lawsuit.
The lawsuit claims Russell and Mantler stole trade secrets from Hydrate and solicited the company’s clients upon joining Elite.
“Prior to leaving Hydrate, upon information and belief, Russell emailed herself some or all of Hydrate’s customer list, vendor list, training manuals, policies and protocols,” reads the lawsuit. “Soon after Elite began operations, Hydrate became informed by its existing customers that Ms. Russell had begun soliciting their business.”
Mantler, prior to leaving Hydrate, sent “sensitive inventory checklists and pricing lists” and a master list to her personal email address, according to the lawsuit.
Hydrate, which said “highly confidential recipes” for its services also were taken, is seeking more than $100,000 in damages.
This isn’t the only recent lawsuit against Elite. Former employee Courtney Tennant sued the company and Russell on Feb. 24, claiming withheld pay, wrongful termination and stolen personal property. Tennant, a shareholder in Elite, also is asking for an inspection of the company’s accounting records.