Walmart ordered to pay $222 million in dispute with Zest Labs

Litigation between Zest Labs and Walmart that began in 2018 added another chapter this week with the retail giant ordered by a central Arkansas jury seated in a federal trial to pay $222 million.

Zest Labs worked with Walmart from 2014 to 2017, allowing the retailer to use their technology to reduce approximately 30% of waste in perishable foods. The suit claimed Walmart misused the trade secrets owned by Zest and subsequently hindered the small company’s ability to move forward.

Zest Labs sued Walmart in 2018 after it signed a non-disclosure order with Walmart to use its patented technology to reduce food waste in the supply chain. Zest Labs said Walmart went from a customer to a competitor after it secretly developed its own technology using Zest’s trade secrets.

Zest Labs won a judgment of $115 million in 2021, but the funds were set aside and a new trial was ordered. The case had since languished in an Arkansas federal court. But on May 13, a unanimous jury seated in the U.S. District Court in Little Rock awarded Zest Labs $222 million, which includes $72.7 million in compensatory and $150 million in punitive damages against Walmart.

“This legal victory is a small but crucial triumph for small businesses that often face exploitation by larger corporations, robbing them of the opportunity to bring their innovative solutions to the market. It marks a significant step toward ensuring justice and fair play in the business world,” said Gary Metzger, manager of Zest Labs.

“Walmart cannot steal technology from smaller innovators and get away with it. A jury of 11 Arkansans stood up and said it in their verdict,” said Scott Richardson of McDaniel Wolff PLLC in Little Rock, part of the legal team representing Zest Labs.

Walmart has denied the charges, saying in 2021 the company respects the intellectual property of others and it would defend itself against the claims.

“We strongly disagree with the verdict and believe it’s not supported by the facts,” Walmart noted in a statement following the recent jury decision. “Zest Lab’s unethical behavior has compromised the integrity of this case from the start. We expect our suppliers to uphold the highest ethical standards and will continue to advocate for fairness and justice, including pursuing an appeal and post-trial motions.”