A California company has sued Fastenal, seeking millions of dollars in punitive damages.
B&B Hardware Inc. of Santa Barbara accuses Fastenal of violating an exclusivity contract that made B&B the Winona company's exclusive supplier for a type of self-sealing fastener.
The lawsuit, filed last week in a U.S. District Court in Arkansas, claims Fastenal broke that agreement by marketing and selling competing products at a lower cost to increase profits.
"We contend Fastenal agreed to be B&B's exclusive partner in marketing self-sealing fasteners and then later ignored the partnership agreement," B&B attorney Barry Snyder said in a written statement.
A Fastenal spokeswoman did not return a request for comment Wednesday.
According to the lawsuit, the patented fastener allows screws, rivets and other fasteners to form fluid- and gas-tight seals. B&B says the product was used in the Mars Rover and has nautical and medical applications.
A contract included with the lawsuit and signed by a Fastenal purchasing manager states Fastenal will not market or sell any similar products or products that perform substantially the same function as the B&B fastener.
But B&B claims Fastenal sold other companies' self-sealing fasteners, marketed B&B's primary competitor on its website as a "Diamond Marketing Partner," and that Fastenal either itself or with other companies is using B&B "technology, trade secrets and other proprietary information" to manufacture and sell a competing product.
The lawsuit requests compensatory damages "in the millions of dollars," as well as unspecified punitive damages.