Breweries are like many other businesses. They hire employees; they give key workers access to important recipes (a trade secret); they potentially expect them to avoid competing after leaving the company. Thus, it is expected that owners would cry foul if an employee violates these stipulations.
Toppling Goliath of Decorah, Iowa, is currently engaged in a dispute with a former head brewer. This top-ranked brewery has jumped onto the national beer scene with a series of hop-forward brews like its flagship Pseudo Sue pale ale as well as barrel-aged stouts and other styles.
The company is suing former head brewer for going to work with new start-up brewery in nearby Cedar Rapids that is a partnership with his brother. The company alleges that the brewer, who worked for the company between 2015 and January of 2017, is violating the non-compete agreement by working for Thew Brewing that opened in March of 2018.
According to local reports, the non-compete agreement stipulated that the brewer could not work for a business competitor within 150 miles of Decorah for two years after leaving. As well as breaking the time limit, the brewer’s new job is about 100 miles from his old one. The company’s suit alleges that the brewer had access to its confidential recipes, formulas and techniques and he is now using those trade secrets for advancing his own brewery. The suit also asserts that the brewer said as much when he told Toppling Goliath that he wanted to leave and open a brewery with his brother. The company filed an injunction in July against the brewer working for a competitor and is seeking damages.
No decision yet
The case has yet to be settled. However, it appears that the brewery has a strong case against its former employee. The court date is currently scheduled for August 31. While the brewing community is tight knit, contracts are an important part of doing business and fulfilling obligations that as well as make businesses profitable. This is the case even when you are a small brewery.