Hermès Handbags at Center of Yet Another Lawsuit This Time With The Auction House Christie's

Yet another interesting case involving the Hermès Birkin bag this past week, this time involving two prominent auction houses and Matt Rubinger; the famed Hermès Birkin bag whisper and judge of authenticity of luxury bags, who on Friday was accused of breach of his contract and trade secrets.

Matthew Rubinger, 26, has left Heritage Auctioneers & Galleries for another more famous auction house, Christie’s International. Rubinger  was set to join Christie’s in August from Heritage Auctions, where he was to be based in Hong Kong, and be responsible for developing the auction house’s luxury handbag business across multiple platforms, including traditional auctions, private sales and e-commerce, but now he at the centre of a heated lawsuit for breach of trade secrets and unfair competition.

Rubinger graduated from Vanderbilt University in 2010 with a BA in European History. He spent his high school and college years buying and selling luxury handbags out of his bedroom and educated himself about luxury merchandise, he soon became a confident judge of authenticity, creating a niche for himself learning to authenticate designer handbags. At a time when counterfeit designer handbags have been rampant. By the time he finished college, he was one of the best in the field, and at 25, he was recognised for his expertise and was hired to launch and head the luxury accessories division of Heritage Auctions.

This Friday, Heritage Auctioneers & Galleries filed a lawsuit in New York state court in Manhattan claiming that three employees, (including Mr. Rubinger) all of whom worked in its recently established luxury accessories department, shared the company's trade secrets with Christie's, which it said had "struggled" to expand its handbag business into a larger luxury accessories division.

Christie's Inc is now being sued for more than $40 million by Heritage Auctioneers & Galleries that says the prominent auction house stole its employees from its highly successful luxury goods division and has “attempted to seize for itself a windfall of millions of dollars in ill-gotten gains through…acts of unfair competition and unethical business practices,"

In the suit, Heritage said that in 2010 it hired recent college graduate Matthew Rubinger to spearhead a new department that specialised in high-end fashion accessories, such as designer handbags. The company invested heavily in his identity, promoting Rubinger as "a star" in the industry, provided him with training and introduction to sources in Hong Kong and Japan, and granted him access to its long-term business plans for expansion and branding.

Rubinger was paid $340,000 in salary and bonuses last year, according to the suit, and was poised to earn even more this year. But last month, Heritage said that Rubinger secretly accepted a job from Christie's in Hong Kong rolling out a luxury accessories department for the auction giant.  

Second-hand Birkin’s that sell at auction are even more of a big thing these days, especially when the waiting list for a Birkin bag is around 3 years! And at auction, bags have fetched up to $203,150. So from a commercial perspective this is big business for any auction house considering tapping into this kind of market. Also, Rubinger was under contract until the end of this year, so the Goss-IP imagines that there would have at least been something in his contract (a clause) preventing him from doing business with or leaving the company for another competitor? And like the Manhattan Supreme Court; the Goss-IPgirl wonders how Christie's newly hired execs would be able to "perform their duties ... without using Heritage's confidential information?"

A spokeswoman for Christie’s has said that “the complaint is without merit…and they are prepared to vigorously defend these claims and also Christie’s decision to expand [their] existing handbag department.”  Undoubtedly, it will be interesting to see how this case unfolds. Heritage is seeking $40 million+ in damages and lost profits, and all of Christie's profits from its luxury accessories division through the end of 2016.
The case is Heritage Auctioneers & Galleries v. Christie's Inc, New York State Supreme Court, New York County, No. 651806-2014