by BOSTON HEIGHTS, Ohio — Williams-Sonoma sued Arhaus for trade secret misappropriation in 2015. RH sued Crate & Barrel for trade secret misappropriation in 2017. Arhaus sued RH in June last year alleging the company knocked off Arhaus’ wildly popular Jagger chair. And less than two weeks ago, Arhaus sued RH for trade secret misappropriation.
These guys don’t like each other, and it probably doesn’t help that top executives shuttle among them, sometimes taking a bunch of emails they shouldn’t have, or at least that’s what the latest lawsuit from Arhaus claims a former executive did before leaving to become president at RH in May.
Arhaus and RH are frequently compared as two of the leading high-end lifestyle home furnishings retailers. Ohio-based Arhaus has a market cap of $1.4 billion. RH, based in Corte Madera, California, has a market cap of $4 billion.
Arhaus filed a federal lawsuit in Northern California on July 24 accusing rival RH and Arhaus’ former chief merchandising officer, Lisa Chi, of stealing trade secrets and confidential information, according to the complaint. Chi re-joined RH as president in May. The complaint alleges that Chi engaged in the “extensive transfer” of sensitive Arhaus business information to her personal email account during her nearly four-year tenure at Arhaus.
In her role as CMO at Arhaus, Chi provided strategy leadership across many of Arhaus’ departments that were “interwoven and essential to the company’s performance,” including product development, buying, merchandise planning and allocation, sourcing and quality, and TB Arhaus Upholstery, according to the lawsuit. In November 2022, she signed a confidentiality agreement acknowledging her position of trust and agreeing not to disclose the company’s proprietary information, according to the filing and a copy of the agreement that is appended to the complaint.
The lawsuit details how Chi routinely forwarded confidential emails and documents from her corporate account to her personal Gmail address throughout her employment. Among the misappropriated materials, Arhaus claims, are business recaps containing sales and inventory data, historical sales spreadsheets, budget templates, strategic planning documents and Arhaus’ Fall 2025 catalog.
Most damaging, according to Arhaus, was Chi’s retention of the Fall 2025 catalog, which the company describes as “among the most closely guarded trade secrets and pieces of confidential information at Arhaus.” The lawsuit also claims that in early 2025, Chi began preparing to leave Arhaus and met with RH CEO Gary Friedman “for several hours” to discuss joining RH. During these discussions, Arhaus claims “on information and belief” that Chi and Friedman talked about the trade secrets and/or confidential information that Chi could bring to RH.
After joining RH in May, Chi maintained access to Arhaus’ confidential information through her personal email and Google accounts, according to the filing, information she then shared with RH. The complaint states that “RH’s products and marketing materials have begun to resemble and replicate Arhaus’ products and marketing materials.”
Arhaus filed eight causes of action, including violations of the federal Defend Trade Secrets Act, California trade secret laws, breach of the confidentiality agreement, unfair business practices and intentional interference with business relationships. The company is seeking multiple forms of relief, including permanent injunctions preventing further use of its trade secrets, requirements that RH place Chi in a role where she cannot utilize Arhaus information, third-party auditing to ensure all confidential information is removed from defendants’ systems, monetary damages and attorney fees, and punitive damages for what it characterizes as “willful and malicious” conduct.
RH will need to file a formal response to the lawsuit in the next few weeks, and on July 29, a summons was issued to Chi by the court, according to the case docket.
Chi had been CMO at Arhaus since July 2021, and joining RH marked her return. She was RH’s senior vice president of merchandising for upholstery from March 2017 to June 2020.
Not their first tango
Last summer in Ohio, Arhaus sued RH for “brazenly” copying its popular Jagger chair, a claim withdrawn four months later. It’s unclear if the companies settled; no response to the suit was filed by RH. But Arhaus withdrew the claim in October. It is very difficult to win a trade dress claim, especially in furniture and fashion.
That earlier federal trademark lawsuit accused RH of copying Jagger for its own Arno chair in what Arhaus called the “final straw” in what it called RH’s “systematic targeting and copying of Arhaus and its products.”
According to the lawsuit, Arhaus created the original Jagger chair in 2019, drawing inspiration from 20th century designer Dan Johnson, one of the company’s in-house designers. The chair features distinctive nonfunctional elements that include “a metal back rail that flares outward to seamlessly transition and blend tangentially into the legs, rails connecting the crossed seat support rails and a parallel back rail.”
Arhaus presented in that lawsuit a narrative that likely had RH executives pretty chapped. Arhaus “managed to defy trends in the U.S. luxury home furnishings market to make substantial gains against its competitors, including RH,” the complaint stated. By contrast, in the complaint’s narrative, RH struggled with consistency.
“Perhaps because it appears to be on a different trajectory than Arhaus, RH has embarked on a campaign to target Arhaus and undermine its market position, including by copying popular Arhaus product designs,” the complaint provocatively stated.
This narrative is similar to one RH presented in its claims against Crate & Barrel in 2017. More on that in a moment.
The corporate family tree
Litigation is one merry-go-round. Executive appointments are another. Gary Friedman was an executive at Williams-Sonoma for 14 years before joining RH, including president and CEO. Thus, he was not at the helm when Williams-Sonoma went after Arhaus in 2014 in Tennessee over trade secret allegations. He was at the helm of RH, however, when RH went after Crate & Barrel for trade secret misappropriation, suing two C&B execs after they left RH, including Doug Diemoz, who joined C&B as CEO.
At the time, RH told the public that “we believe that Crate and Barrel is trying to gain an unfair competitive advantage by unlawfully obtaining RH’s proprietary information and trade secrets and that these former RH personnel have violated their confidentiality and contractual obligations to RH. We take this matter very seriously, are confident the facts support our position and look forward to vigorously pursuing these claims.”
This, of course, all sounds very familiar. So does the narrative of the competition between RH and C&B at the time: “In contrast to RH’s meteoric revenue growth since the Great Recession, competitor Crate … has experienced little revenue growth during this same time period. Some public reports state that privately held Crate’s revenue in 2007 was $1.3 billion and its revenue in 2013 was $1.38 billion, showing a long period of slow to no growth in revenue.”
Diemoz was RH’s chief development officer. His tenure at C&B ended less than two years later. RH’s action against C&B also centered on a Gmail account. According to the Chicago Tribune at the time, Diemoz was alleged by RH to have used Gmail to communicate with RH employees he was seeking to poach.
In the Williams-Sonoma suit, three former executives were accused of “systematically stealing” confidential information and trade secrets with Arhaus after one of the three, Timothy Stover, left Williams-Sonoma to join Arhaus.
And around and around it goes. I have reached out to RH for a response to the Arhaus claims, but I did not use my personal Gmail account to do it.
