Toppling Goliath Sues ex-brewer over Non-Compete Violation

[Hwk-I-St8]

https://www.beervanablog.com/beervana/2018/7/31/how-to-screw-your-brewer

Thoughts on this? I'm not a fan of non-compete clauses and I think TG is making a public relations mistake on this, but I disagree with the author when he basically says there's no possibility in brewing for trade secrets with respect to style, process or recipes.

Thoughts?

 

[beernutz]

Like the comments in the article state, a non-disclosure is one thing and I have no problem with employees having to sign one of those. However a non-compete clause that effectively prohibits a former employee from being employed is ridiculous and TG deserves scorn for trying to enforce one. imo. I'm sure they could care less but I won't be buying any of their beers

 

[Andrew Hodgson]

I don't get why this is a big issue? When you have an employment contract you agree to the terms of the non compete, maps suggest the breweries are within 150 miles of each-other.

When you sign you sign. Without knowing more about the non-compete I don't see the opposing argument really.

 

[Andrew Hodgson]

Like the comments in the article state, a non-disclosure is one thing and I have no problem with employees having to sign one of those. However a non-compete clause that effectively prohibits a former employee from being employed is ridiculous and TG deserves scorn for trying to enforce one. imo. I'm sure they could care less but I won't be buying any of their beers

Only within the stipulated distance/time-frame.

After consulting someone who knows more about employment contracts than me apparently the 150 miles is way larger than a "logical market area" so likely this wouldn't be enforceable.

 

[specharka]

I don't get why this is a big issue? When you have an employment contract you agree to the terms of the non compete, maps suggest the breweries are within 150 miles of each-other.

When you sign you sign. Without knowing more about the non-compete I don't see the opposing argument really.

Because it’s tantamount to forcibly preventing a brewer from seeking other work (which is illegal). You either have to move far enough away from the brewery for it to be non competitive, or seek alternative sources of employment. Just because it’s legal doesn’t mean it’s ethical.

Non-disclosure agreements make sense since they protect intellectual property and proprietary technologies. Non-compete agreements are BS methods for manipulating employees and restricting movement of market labor.

 

[GoeHaarden]

This caught my eye, "sought an injunction to stop a former brewer from working in the same position."

Why not just open a tap room, and change his title to bar manager not head brewer. Doesn't mean his roll is confined just bartending, and what they do within their own business is a private matter...

When you sign you sign. Without knowing more about the non-compete I don't see the opposing argument really.

I do agree with you here. If you don't want a non-compete contract then don't sign it. I'm sure another brewery would have hired him.

Because it’s tantamount to forcibly preventing a brewer from seeking other work (which is illegal). You either have to move far enough away from the brewery for it to be non competitive, or seek alternative sources of employment. Just because it’s legal doesn’t mean it’s ethical.

I kind of agree with you as well, and I believe non-competes are BS in most circumstances. However, he DID sign the agreement and HE is ultimately responsible for the contracts he enters. I'm sure he could have negotiated this out of his contract if he really tried. I do think it is wrong that they imposed this on his employment contract.

I guess the ultimate lesson here is to always read the fine print...

 

[bob1852]

Because it’s tantamount to forcibly preventing a brewer from seeking other work (which is illegal). You either have to move far enough away from the brewery for it to be non competitive, or seek alternative sources of employment. Just because it’s legal doesn’t mean it’s ethical.

Non-disclosure agreements make sense since they protect intellectual property and proprietary technologies. Non-compete agreements are BS methods for manipulating employees and restricting movement of market labor.

Contract law has everything to do with legality and nothing to do with ethics.

Perhaps the brewer should've read and/or understood what he signed....

 

[madscientist451]

The ability of employers to enforce these kinds of agreements has been litigated many times. With various twists and turns in various states.
Iowa is no exception and it looks like this one will be decided by a judge and not a jury:

https://trepanierlaw.com/8th-circuit-ruling-on-iowa-non-competes-raises-interesting-implications/

Employers have the upper hand when demanding that these kinds of agreements are a condition of employment. The worker needs a job, needs money and wants the experience. It's not "fair" that the employer holds all the cards, but life isn't fair, never was and never will be.

 

[GPP33]

Contract law has everything to do with legality and nothing to do with ethics.

Perhaps the brewer should've read and/or understood what he signed....

Yep. If someone made me sign a non-compete as a condition of employment I'd make sure there was something in it for me to ensure it's worth it.

Employers have the upper hand when demanding that these kinds of agreements are a condition of employment. The worker needs a job, needs money and wants the experience. It's not "fair" that the employer holds all the cards, but life isn't fair, never was and never will be.

It actually is kinda fair. The employer went to the trouble to start a business (not an easy task) and is giving you an opportunity to earn a living to support your lifestyle and family. Don't like it, start your own business, then you'll have the upper hand.

 

[ong]

Non-competes are a really bogus way of implementing IP protection at the cost of workers. Fortunately they’re proving nearly unenforceable lately. I’m happy to see more companies losing this battle to prevent individuals from making a living.

 

[EnglishAndy]

I'm surprised these clauses are allowed in the US. They are not allowed in the EU but still very common because HR departments see that you're subject to one and decide you're not worth the effort.

 

[MT's AZ Ale Haus]

Regardless of the distance or circumstances, HE SIGNED the non-compete.

I don't agree with the lawsuit, but nobody put him in the situation but himself he has nobody to blame but himself.

 

[aprichman]

Regardless of the distance or circumstances, HE SIGNED the non-compete.

I don't agree with the lawsuit, but nobody put him in the situation but himself he has nobody to blame but himself.

Just because someone signed a contract doesnt inherently make the contract enforceable.

 

[MT's AZ Ale Haus]

Just because someone signed a contract doesnt inherently make the contract enforceable.

HUH????

As a part of an employment contract in the same industry regarding non-compete and non-disclosure it does.

 

[shoengine]

He shouldn't have signed it assuming the reason for it. He should have asked the purpose of it, asked for it to be struck, proposed a change or not pursued the job.

People really need to look at contracts. So many times companies will stick stuff in there, even if it is unenforceable or even illegal, because it may give then options. Mandatory arbitration clauses, non-competes, non-disclosures, consent to monitoring, et cetera. If people read then and objected to them they wouldn't be added at the rate they are these days. We'd save a bundle by not having them go to courts as well.

My hard and fast rule is, if I have to sign a contract without a thorough review, I just don't sign it.

Learned that one after a verbal commitment didn't make it onto paper and I am still losing money today because of it.

 

[MT's AZ Ale Haus]

"Caveat Subsciptor"

 

[burntchef]

He signed the contract his bad. Having been in the same boat myself, " here sign this employment contract ". I declined and they hired me anyway. Not to offend anyone here, but I hate the way our legal system dishes out justice on the civil court side of things.
Eric

 

[bob1852]

Just because someone signed a contract doesnt inherently make the contract enforceable.

Sure, but it's step 1 in the legal system:

"Is there a signed contract?"

It's a lot easier to get a lawsuit dismissed if there isn't a signed contract...

Since there is a signed contract, it becomes a decision about how much time/money to spend in the legal system...

 

[Qhrumphf]

As said, signing a contract doesn't make it legal.

The issue, as I understand, is if a non-compete is REALLY protecting trade secrets (which there are few, especially in the brewing industry), or if, more likely, it's a means of punishing an employee for leaving, which is much more likely illegal as a labor law violation, and as such no signed contract will make it legal.

 

[bob1852]

As said, signing a contract doesn't make it legal.

The issue, as I understand, is if a non-compete is REALLY protecting trade secrets (which there are few, especially in the brewing industry), or if, more likely, it's a means of punishing an employee for leaving, which is much more likely illegal as a labor law violation, and as such no signed contract will make it legal.

Proving a signed contract isn't legal still has to be fought in civil court...

Plaintiff's arguement will be "you signed an agreement with certain terms and you broke them. If you felt those terms were illegal, why did you sign the agreement?"

 

[Qhrumphf]

Proving a signed contract isn't legal still has to be fought in civil court...

Plaintiff's arguement will be "you signed an agreement with certain terms and you broke them. If you felt those terms were illegal, why did you sign the agreement?"

Because a human who needs money to buy food and pay rent/mortgage to not die starving and homeless, people need jobs. It's not a purely voluntary equation.

Which is why the courts tend to side with employees and deem these unenforceable.

Of course a court battle is still part. But I have to wonder if it's worth it for the employer to fight it out either.

 

[bob1852]

It's not a purely voluntary equation.

I take it you've never been involved in civil litigation regarding contracts?

 

[Qhrumphf]

I take it you've never been involved in civil litigation regarding contracts?

I have not. If a judge asked me why I signed an agreement I knew was bullsh** that's what my response would be.

 

[bob1852]

I have not. If a judge asked me why I signed an agreement I knew was bullsh** that's what my response would be.

How do you know it's bullsh**?

And, unfortunately, a defendant's answer to a plaintiff's complaint of "I knew this was bullsh**" isn't a very good legal defense...and could result in a default judgement in favor of the plaintiff. Then there's discovery and everything that goes along with that.

All of that takes a lot of time and a lot of money.

It's not as simple as telling a judge "this is bullsh**".

If you don't sign a contract, there's no breach of contract laws to litigate in civil court.

 

[MT's AZ Ale Haus]

"Because a human who needs money to buy food and pay rent/mortgage to not die starving and homeless, people need jobs."

Ummm..
He had a job!
He voluntarily quit that job, He voluntarily violated a non-compete Clause that
He voluntarily signed.
To go work for his brother who obviously is well-off enough to own a brewery.
I don't think any judge would find "Hardship" in this case and to cite poverty as a reason for employment is ludicrous.

 

[schematix]

I have had this discussion several times with one of my friends who happens to be an actual lawyer.

Contracts are voided all the time. You can’t make a contract to do something illegal and it becomes ok. Inclusion of those items without a severability clause will void the full contract.

Specific to employment contracts though, broad or over reaching requirements have been ruled by courts to be unenforceable because you can’t deny someone work. Reasonable limits in terms of time and geography must be included. So 50 miles for 1 year totally enforceable. 250 miles could go either way. But if they didn’t place a time limit then it would likely be voided.

At the end of the day though you don’t want to litigate. Everyone loses except the lawyers.

 

[Braufessor]

At the end of the day though you don’t want to litigate. Everyone loses except the lawyers.

Yep.... this is a fact.

There are no "trade secrets" here. It was something someone signed because they needed and wanted a job. Others quit working there because they were being forced to sign it or be fired.

The sole purpose of an agreement like this, in the end, is basically to control the options of your employees ( because the idea of recipes and trade secrets in brewing is basically BS.)

I get that a contract was signed...... But, the whole thing is really unfortunate and there are not going to be any "winners" in this kind of thing in the end. Horrendous PR for the brewery. Expense/time the defendant could do without.

And, seriously, what is it about? We brew an "All-Citra IPA" that is good and somehow that is special in the industry? I think not.

EVERY brewer that brews good beer is a good brewer because he/she learned things from OTHER brewers, and OTHER jobs. This idea that some brewer, at some brewery, is doing something totally unique and special is just ridiculous.

 

[bob1852]

Contracts are voided all the time. You can’t make a contract to do something illegal and it becomes ok.

Except, legality of contracts is determined through the courts....aka lawyers. And, wait for it...

At the end of the day though you don’t want to litigate. Everyone loses except the lawyers.

Ding, ding, ding!!!

Bottom line, don't sign a contract and there's no lawsuit to determine if said contract was legal or not...

 

[Qhrumphf]

Which is all well and good unless signing bad contract means paycheck and refusing to sign means no paycheck (and if you're turning down work potentially losing unemployment too but I'm not sure on that one).

I'm not saying it is the situation at hand with TG. Nor was I implying legal weight. But that's reality. If I have to eat, I take a bad deal so I can eat. If I was dealing with the issue in court, I'd be consulting with an attorney who could phrase "this agreement is bullsh**" to a judge better than I could. If I could afford one that is.

That said, I do know precedent is on the side of the employee. Stands to reason.

Must be nice to not have had to grovel for a job.

 

[MT's AZ Ale Haus]

All the people saying this contract is BS...
I wonder if Apple and Samsung think that non-compete and non-disclosure for their engineers is B.S.