Invention

Costco failed to pay worker for ‘secret invention’, GA lawsuit claims

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A Costco employee in Georgia is suing the retail giant after he claims he used his idea for an automated meat ordering system without paying him.

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A Costco employee in Georgia said he got nothing in return after giving the big-box retailer a “secret invention” that saved hundreds of thousands of dollars.

Now he is complaining.

Costco Wholesale Corp. executives went back on their word to provide Ronald McLeod with cash and other benefits if the invention — an automated meat ordering system — proves successful, according to a lawsuit filed in federal court this week.

The invention would have reversed significant inventory losses for Costco, McLeod’s attorney said, and the company then implemented it in other stores.

“Defendant Costco continues to use and benefit from Plaintiff’s original and unique ideas, secrets, inventions, strategies and formulas associated with the use and implementation of Plaintiff’s system in its operations, with great success” , says the lawsuit.

McLeod filed an initial lawsuit in Coweta County Superior Court on Dec. 15, according to court documents. But Costco moved the dispute to the Northern District of Georgia on Feb. 14, saying the dispute belongs in federal court because the Washington-based company is in another jurisdiction.

An attorney representing McLeod and Costco’s attorney did not immediately respond to McClatchy News’ Feb. 18 request for comment.

According to the complaint, McLeod was hired as a meat supervisor at a Costco store in Sharpsburg, Georgia, about 75 miles northwest of Macon, in March 2018.

Years earlier, in 2002, McLeod’s attorney stated that he “developed a secret and confidential system designed to increase inventory accuracy, increase profits, and manage budget expenditures associated with the commercial sale of meat and of meat products”.

He reportedly presented this system to Costco’s CEO and several officials in early October 2019, more than a year after he began working on it. According to the lawsuit, Costco agreed to try it and promised McLeod payment and other rewards if the invention worked well.

McLeod later gave the company “certain new secrets, inventions, strategies and formulas” related to the development of the system, his attorney said. He would then have spent considerable time implementing it, often without pay or on his days off.

The system was officially implemented at his store in November 2019, according to the lawsuit.

McLeod’s attorney said he had great success and reversed $230,000 in inventory losses, prompting Costco to implement it at another store in Alpharetta.

Despite this accomplishment, McLeod received no reward, financial or otherwise, his attorney said.

The lawsuit alleges fraudulent and negligent misrepresentation related to Costco’s broken promises as well as breach of contract and misappropriation of McLeod’s ideas. Costco has yet to respond to the lawsuit, according to court documents.

Hayley Fowler is a reporter for The Charlotte Observer, covering breaking news and real-time news across North and South Carolina. She holds a journalism degree from the University of North Carolina at Chapel Hill and previously worked as a legal reporter in New York City before joining the Observer in 2019.