Cupids said it had a two-year noncompete agreement with Adam Longstreth, who was the general manager, Stephanie Frakes, who worked in corporate accounting and human resources, and Dustin Bean, a store manager.
But Cupids said the employees went ahead and opened their own store, Vertige Lingerie in Little Rock, according to the lawsuit Cupids filed in Pulaski County Circuit Court.
Longstreth and Frakes left Cupids in November. On Jan. 15, Cupids discovered Vertige Lingerie's business plan on Cupids' phone issued to Bean. The lawsuit said he was discharged that day.
Cupids' attorney, David Sterling of North Little Rock, declined to comment on the case.
Cupids has asked a judge to immediately issue an order stopping the defendants from being in the lingerie business for two years. Cupids also is seeking an unspecified amount of damages for alleged breach of fiduciary duty, unfair competition and violation of the Arkansas Trade Secret Act.
The defendants, in their court filings, said Cupids doesn't have a case against them.
"This lawsuit smelled of desperation," said Vertige's attorney, Steve Niswanger of Little Rock.
Niswanger said in his court filing that the noncompete agreement "is overly broad and therefore unenforceable."
The defendants denied that they did anything wrong and asked that the case be dismissed.
The defendants also said that they sell high-end lingerie that isn't in direct competition with Cupids, which sells adult toys, videos and less expensive lingerie.
The defendants have filed a counterclaim against Cupids for fraud and deceit. They alleged that Cupids tried to interfere with Vertige's business. The Vertige owners are seeking an unspecified amount of damages.