Walmart Hit With $177M Verdict in Zest Labs Trade Secret

Case Background

Zest Labs, Inc., a company focused on reducing fresh food waste through its Zest Fresh solution, entered into a multi-year relationship with Walmart. The partnership began in 2014 with Walmart showing interest in Zest’s technology to tackle the industrywide issue of Fresh Food Shrink. Zest shared trade secrets, proprietary algorithms, software platforms, and supply chain techniques with Walmart under confidentiality agreements. Walmart participated in pilots and testing phases, giving Zest the impression that a commercial rollout was imminent.

However, in late 2017, Walmart abruptly ended their engagement. By March 2018, Walmart launched a competing platform called "Eden," claiming it had been developed in just six months. Zest Labs filed suit, alleging Walmart had stolen its proprietary technology and used it to develop Eden without consent or compensation.

The cause that led to the dispute

Zest Labs and its parent company, Ecoark Holdings, brought claims of trade secret misappropriation under the federal Defend Trade Secrets Act and the Arkansas Trade Secrets Act. They also accused Walmart of breach of contract, fraud, conversion, unfair competition, unjust enrichment, and more.

Injury suffered

Plaintiffs argued that Walmart's misappropriation of Zest Fresh cost them billions in lost profits and opportunities. They claimed Eden was essentially a replica of Zest Fresh, built using stolen data and know-how. This, they said, not only deprived them of licensing revenue but also harmed their credibility and business prospects in the agricultural tech industry.

Key Arguments and Proceedings

The case, filed in the Eastern District of Arkansas, centred on whether Walmart unlawfully used Zest’s proprietary technology to create its own food freshness tracking system. Plaintiffs provided internal communications, technical details, and evidence of Walmart's knowledge of Zest’s systems.

Walmart denied all allegations. It argued that Eden was developed independently through an internal “hackathon” and was based on publicly available USDA standards and Walmart’s own data. Walmart also claimed Zest had failed to deliver usable code under a separate Statement of Work (SOW) agreement and countersued for breach of contract, asserting it had overpaid for a non-functional product.

Legal Representation

Plaintiffs: Zest Labs, Inc. and Ecoark Holdings, Inc.

·       Counsel for Plaintiff: Adam D. Mitzner

Defendant: Walmart Inc.

·       Counsel for Defendant: Andrew Gish

Key Arguments by Counsel

Plaintiffs' counsel emphasized the detailed and prolonged access Walmart received to Zest Fresh and argued that Walmart used this confidential knowledge to reverse engineer Eden. They stressed that Walmart’s public statement about Eden being created in six months was not only implausible but intentionally misleading.

Walmart’s legal team countered that Eden arose from internal innovation and that no confidential information had been used improperly. They claimed Zest’s damages were speculative and unsupported by facts, and that Walmart had complied with all contractual obligations.

Claims Asserted

Misappropriation of Trade Secrets

Plaintiffs claimed that Walmart knowingly used Zest’s proprietary data, software, and processes to build Eden. They argued that Walmart's own admissions, such as announcing $2 billion in projected savings, demonstrated the commercial value of what was taken.

Breach of Contract

Zest alleged Walmart violated non-disclosure agreements and used confidential information for its own gain. The breach, they claimed, extended to both express contracts and the implied duty of good faith.

Fraud and Unjust Enrichment

Zest also argued that Walmart fraudulently induced them into extended trials under the pretence of partnership, all while intending to develop its own system. By leveraging Zest’s information, Walmart was unjustly enriched without paying fair compensation.

Conversion and Unfair Competition

Plaintiffs accused Walmart of unlawfully retaining and using Zest’s intellectual property. They claimed this gave Walmart an unfair edge and robbed Zest of its ability to market its system to competitors or even to Walmart itself.

Defense Arguments

Walmart denied using Zest’s trade secrets, claiming Eden was developed internally through independent research. It said the information provided by Zest lacked specificity and that any overlap was due to general industry practices. Walmart also argued that any claims were barred by doctrines like waiver, laches, and estoppel.

In its counterclaim, Walmart asserted Zest had failed to deliver code under a separate software development agreement, resulting in damages to Walmart. It asked the court to compel delivery of that software and to award damages.

Jury Verdict

On May 13, 2025, a federal jury in the Eastern District of Arkansas delivered a decisive verdict in favour of Zest Labs, Inc. and its parent company, Ecoark Holdings, Inc., against Walmart Inc. The jury concluded that Walmart had misappropriated Zest’s trade secrets related to its proprietary food freshness monitoring technology. After weighing the evidence, the jury awarded $72 million to Zest Labs in compensatory damages, determining that Walmart’s unauthorised use of Zest’s confidential algorithms, software, and supply chain management tools directly caused significant financial harm. The jury also found that Walmart’s conduct had been wilful and malicious, leading to an additional award of $105 million in exemplary damages. This brought the total damages to $177 million, making the outcome one of the most significant trade secret verdicts ever issued against a major American retailer. The ruling sent a strong message about the consequences of misusing proprietary technology under the guise of corporate collaboration.

 Court documents are available upon request at jurimatic@exlitem.com