Darden Restaurants facing US$13M lawsuit from Xerox over canceled, six-year human resources services contract; Darden trying to work out the disagreement, according to company statement
June 27, 2014
Xerox Corp. and Orlando-based Darden Restaurants are engaged in a $13 million disagreement over a canceled, six-year human resources services contract.
Darden is trying to work out the disagreement, according to a statement from Rich Jeffers, Darden communications director. Xerox filed a federal lawsuit in Orlando on June 24 claiming the multimillion damages, which it alleges stem from costs and lost opportunity.
Xerox alleges in the lawsuit that its contract with Darden started in 2012 to provide human resources, benefit enrollment and other services. Xerox, once known only for copier machines, has morphed into a large business services company.
Xerox alleges that it started working on the Darden contract and met critical milestones. But the suit says Darden canceled the contract on July 26, 2013, in a one-sentence letter.
Darden hasn’t filed an official response to the suit in court yet. But the statement from Jeffers offers a different view of the dispute.
“Xerox informed us last year that they could not deliver on their contractual obligations. As a result of that disclosure, we exercised our contractual right to terminate the agreement and retained a new firm that completed the work. We are trying to work with Xerox to resolve this dispute,” the Darden statement said.
The claim comes at a time when Darden has faced smaller profits as it prepares to sell its Red Lobster chain, which has been a drag on revenue. Profit for the most recent quarter was down 35 percent. It’s other big chain, Olive Garden, also saw same store sales drop in the last quarter.