Soft drink giant Coca Cola yesterday contested rival Pepsis charges in the Delhi High Court that it was poaching employees, saying the on going recruitment was part of its $700-million expansion plan in India.
Cokes reply came in response to Pepsis suit demanding a stay on poaching and seeking unspecified amount of damages due to defections of key employees allegedly engineered by its competitor.
Repudiating Pespis claim that it was poaching its employees, Coke submitted before justice D K Jain that any stay on such recruitment would be to restrict Cokes legitimate business interests and (to) stiffle healthy competition. The judge, however, adjourned the case till May 25 as other defendants in the case sought time to file reply to Pepsis petition.
Seeking rejection of Pepsis suit for unspecified amount of damages, Coca Cola said, The company is expanding its business by investing large amounts and are taking in additional employees and staff to meet its growing needs.
It denied that Coca Cola has adopted unlawful means as alleged or recruited employees with the sole purpose of injuring Pepsi, it said.
Saying that the Pepsi petition was silent on the material particulars of the damage caused on each occasion, Coke counsel contended that the plaintiff has not even stated as to the precise damage caused to them.
The counsel for Coke, Harish Salve, Dushyanta Dave and Pallavi Shroff contended that Coca Cola had not offered inducement of any kind to the Pepsi employees as alleged.
The counsel said, The employees who have joined Coke have been fitted in the defendants normal grades and offered renumeration packages of the grade they are employed in. Coke charged that instead of advertising their own product Pepsi had resorted to ridiculing the defendant though an advertisement campaign.
One recent example is the advertisement now put in the market by the Pepsi in retaliation to the defendants Eat cricket, sleep cricket but drink only Coca Cola Coke counsel said.
Pepsi had chosen to retaliate by an ad-campaign which seeks to mock, ridicule and belittle this campaign, Coke counsel added.
Meanwhile, counsel for Pepsi K K Venugopal and Arun Jaitly informed the court that they would file their reply to Cokes application for rejecting the formers petition. The court, in turn, asked Coke to file a rejoinder, if any, before May 25, the next date for hearing.
Coke alleged that Pepsi had recently signed a contract with two Coca Cola bottlers, namely Gujarat Bottling and Goa Bottling . Coke said when Pepsi entered India in 1990, their major competitor at that time was the Parle group. Pepsi systematically signed contracts with Parle bottlers one by one, Coke counsel said.
The Parle bottlers with whom Pepsi signed up included Agra Beverages, Pearl Drinks and Universal Drinks, Nagpur. Similarly, Pepsi also recruited a large number of executives of affiliates of the defendants, of franchisee bottlers of Parle and some executives of Parle itself the counsel said.
It is obvious that Pepsis current agreement with Goa Bottling company has been entered into with sole object of injuring Coca Cola as Pepsi already had a bottler at Goa, the counsel said.
Coke alleged that Pepsi, indirectly, was trying to secure blanket negative covenant against their employees and business associates which would be illegal, unenforceable and opposed to public policy.
