Trade Secret Dispute Brewing In Minnesota
The popularity of craft beers has skyrocketed. A report cited in Fortune claims that microbreweries’ market share increased from 5.7 percent in 2011 to 12 percent in 2015. This growth has led to competition as microbreweries capitalize on the growing appetite for their product. Unsurprisingly, competition has led to allegations of unlawful conduct.
Summit Brewing Company, one of the oldest microbreweries in the United States, recently filed a lawsuit alleging that its former VP of Sales coordinated with a Sales Market Manager to disclose trade secrets to a direct competitor. Summit alleges that the VP entered into an independent consulting agreement with a direct competitor within months of ending his employment. Summit further alleges that the Market Manager then emailed the former VP trade secrets that were passed on to high-level executives of the direct competitor. The allegedly stolen trade secrets included: (1) propriety sales and marketing plans, tools, strategies, and programs; (2) pricing and distribution plans, tools, strategies, and programs; (3) production goals; (4) growth strategies; (5) distributor relationship information; and (6) management systems and techniques.
At first glance, one might expect the recipe of Summit’s beers to be the subject of this brouhaha. But Summit’s claims reveal how state laws can protect proprietary information that falls outside a rigid concept of trade secrets. Strategic goals and distribution and marketing plans can qualify as protected trade secrets if they are valuable and not publicly known. When employees leave to work for a competitor, employers should take prompt action to investigate whether any trade secrets have possibly left the company as well.