Former Home Depot Executive Gets Nailed By the Trade Secrets Hammer

The Atlanta Business Chronicle is reporting that former Home Depot executive Guillermo Martinez of Cumming, Ga., pleaded guilty Wednesday in federal district court to stealing trade secrets from the home improvement retailer.

Martinez was Home Depot’s senior manager of product engineering, responsible for helping company vendors prep to sell products to the company. In his position, he had access to Home Depot’s confidential information and other trade secrets, including pricing and profitability spread sheets and documents relating to product line reviews.

Starting in January 2008, Martinez was assigned to assist a potential local vendor that subsequently invited by Home Depot to participate in a product line review. A product line is where potential vendors make presentations for their products, packaging and marketing ideas. It also involves the submission of the potential vendors’ prices.

From around May 2008 and continuing until around July 2008, Martinez began supervising the local vendor’s presentation to Home Depot (NYSE: HD) as if he was a high-level employee of the vendor. In an effort to have the vendor gain an advantage over its competitors during the product line review, Martinez provided the vendor with Home Depot trade secrets. Specifically, he gave out confidential and proprietary pricing information, including the price the company was paying the vendor's competitors for the products that the vendor wanted to sell to the company.

Martinez provided a document titled “Wire Devices: RFP Summary,” which was marked at the bottom as “Proprietary & Confidential to The Home Depot,” and which contained a summary of the vendor's line review of competitor's price quotes. Martinez also provided a binder containing the line review presentation submitted to the company by a competitor of the vendor.

During this same time, Martinez was negotiating an employment agreement with the vendor.

Sentencing is set for Feb. 3, 2010.