Archive for the ‘Trade Secrets’ Category

We have blogged on many occasions on beating your non-compete agreement. The enforceability of them varies from state to state and can be dependent upon what state you worked in and what state your employer was located in.

Boston Beer Corp., the brewer of Sam Adams beer, recently sued a former sales executive and a rival California brewer, of Anchor Steam, he went to work with to try to keep him from divulging any of its trade secrets.

This case is interesting since in California, non-competes are generally not enforceable. However, Boston Beer sued Judd Hausner and Anchor Brewing of San Francisco in Boston a state that allows non-compete clauses in employee contracts.

In its lawsuit, Boston Beer seeks to enforce its non-compete against Mr. Hausner for one year. Boston Beer claims that Hausner hold confidential trade secrets.

This confidential information included Boston Beer’s secret plan for introducing new products in 2012, as well as sales and pricing numbers for the customers served by the entire Western Division of the Company (extending through the western states of the United States and into Canada). These secret plans and confidential data were disclosed to Hausner to enable him to compete more effectively against direct competitors such as Anchor.

Will keep you posted on how this beery interesting case turns out.

If you want to draft, review, negotiate or litigate over a non-compete, feel free to call Scott Behren and the Behren Law Firm for a free consultation.

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You may recall I have blogged on many occasions about the enforceability of non-compete agreements. In many cases, depending upon the state you are employed in, non-competes are not enforceable unless the employer has a legitimate business interest, such as a trade secret, that they are trying to protect by using the non-compete. You may recall that I previously had given examples of the KFC secret ingredient or the secret formula for Pepsi as the types of things that might be trade secrets that would justify protection under a non-compete agreement. It would not need to be something necessarily as famous as one of those examples, but it needs to be something more than information available from publicly available resources. In my experience, most employers do not have legitimate interests they are trying to protect by non-competes, they just want to stifle competition. That is not legal.

Well here is one more example of a legitimate trade secret where an employee was kept from working for a competitor due to his knowledge of trade secrets. Believe it or not, the owner of Thomas English Muffins a company called Bimbo Bakeries USA (Yes thats right Bimbo Bakeries) received a preliminary injunction against its former Vice President of Operations for California, Chris Botticella, preventing him from working for its competitor, Hostess Brands. The reason: Botticella was privy to nearly all of Bimbo’s trade secrets.

What’s a trade secret? Most states have codified the definition of a trade secret, but the basic ingredients are generally the same. A trade secret is defined as information, including a formula…method, technique or process that 1) derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use 2) is subject to efforts…to maintain secrecy. In a nutshell, a trade secret is information you don’t want a third party to know because it is profitable and, therefore, you try really hard to keep it confidential.

So Bimbo’s former employee went to work for a competitor, Hostess bakery. The maker of those so delicious Twinkies and cupcakes. The trial court granted a temporary injunction against this former employee keeping him from working for Hostess and finding that he had access to Bimbo’s trade secrets including: processes, pricing strategies and those formulas used to give Thomas English Muffins those nooks and crannies. The trial judge also found that Bimbo’s former employee, right after he accepted employment with Hostess, downloaded confidential information onto thumb drives.

So Bimbo’s former employee is prevented from working now until further rulings from this Court on this issue.

Well now I can give as examples of trade secrets, Pepsi, KFC and Bimbo Bakeries. But again, if you have a non-compete issue, speak with an employment attorney to review the document and advise you of your rights.

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