Toppling Goliath sues to keep former head brewer Chris Flenker from helping new rival Thew Brewing

Discussion in 'Beer News & Releases' started by SudsSavant, Jul 30, 2018.

  1. SudsSavant

    SudsSavant Aspirant (213) Jan 9, 2007 Minnesota
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  2. eppie82

    eppie82 Meyvn (1,081) Apr 19, 2015 Illinois
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    I mean, if a non-compete clause was written into his contract (cannot be employed within a 150 mile radius of TG for 2 years as a brewer) then it seems like this will be a pretty easy win for TG from a legal stand point.

    From a personal standpoint, that's kind of a bummer to find out that TG is suing one of it's former employees... but in the end, this is all business.
     
  3. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
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    From what I understand, non-competes are almost never binding when taken to court, though it depends on what "consideration" he/she was given in return for signing the non-compete as well as how "reasonable" the court deems it. My legal knowledge is limited, though, and I'm in no way a lawyer.
     
  4. eppie82

    eppie82 Meyvn (1,081) Apr 19, 2015 Illinois
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    Same here, I'm no lawyer so I won't pretend to be one. Perhaps someone with a law degree on here can clarify.
     
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  5. MNAle

    MNAle Meyvn (1,034) Sep 6, 2011 Minnesota

    I'm no lawyer, but the company I work for has enforced non-competes. Non-competes properly written are enforceable. One area they run into trouble is if they are so strictly written that the former employee cannot get a job in his chosen field. With the agreement stating "...within 150 miles of Decorah..." this does not seem to me to be an issue; he just needs to be a bit farther away.

    However, the article says he left TG in January of 2017. If this is true, there are only 5 months or so left, I wonder if it is worth the trouble.
     
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  6. Boldbrew

    Boldbrew Initiate (134) Jun 26, 2017 Minnesota
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    I had a family member get into a legal dispute due to a non-compete with a former employer. Basically it was written in a way that would have made it impossible for him to get a similar job without moving to another state.

    Ultimately the non-compete did not hold up although he was unable to start his new job for over a year with the back and forth between the two companies lawyers.

    It seems better to wait the 5 months and forget about the lawyers.
     
  7. NickTheGreat

    NickTheGreat Devotee (468) Oct 28, 2010 Iowa

    No lawyer either, but in my industry I've seen non-competes hold up also. We had a guy hired, but eventually did not hire him because of that.
     
  8. JFresh21

    JFresh21 Disciple (306) Mar 6, 2012 Illinois
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    Similar thing at my company. A woman relocated from Florida to Illinois and she was at work for a week then gone. We asked what happened and her old employer sued for non compete. I don't know if it was enforceable or not but it was enough to scare off my company.

    Cedar Rapids to Decorah is 2 hours away. I don't think this will hold up.
     
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  9. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
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    This is the main reason for non-competes, even when they aren't enforceable: scare tactics, either to scare off other companies or to scare the employee into compliance with the fear of legal fees and the court system.
     
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  10. Jaycase

    Jaycase Meyvn (1,214) Jan 13, 2007 Illinois
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    Google (link) says 91.78 miles between the two towns.
     
  11. JFresh21

    JFresh21 Disciple (306) Mar 6, 2012 Illinois
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    Right, I doubt the law would make someone unemployable in their field in a location 2 hours away. It's not like the guy got a job at Pulpit Rock in Decorah.
     
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  12. DriftlessFarmer

    DriftlessFarmer Initiate (70) Dec 15, 2016 Iowa

    Right, but we're talking about TG.

    Based on Thew's scale, I can't imagine this being about anything more than TG flexing it's muscles and spiting a former employee.
     
  13. Jaycase

    Jaycase Meyvn (1,214) Jan 13, 2007 Illinois
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    Presumably it's a written contract. If it is and he signed it stating he agreed not to work for a rival business within 150 miles of Decorah for two years after his departure, then that's the terms of the contract. And 2 hours away is not really relevant as it appears to be based on distance.
     
  14. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
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    Just because something is written into a contract does not mean that it's enforceable, even if it is agreed upon and signed. If a contract is deemed unreasonable or unfair (or illegal/unenforceable in some other way), a court/judge can and will overturn it. There are examples of this.

    That said, Again, I am not a lawyer, but I tend to agree with you that this will be upheld. That sort of distance is not at all unreasonable to me (inconvenient, sure, but not unreasonable), and considering how little time is left on the clause, I find it difficult to believe that the court will do anything but uphold the agreement.
     
  15. Sabtos

    Sabtos Poo-Bah (5,236) Dec 15, 2015 Ohio
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    Seems they'd have better things to worry about. Brewers in Florida quitting breweries to start their own up or join 'competitors' left and right. Not a lot of people complaining about that.
     
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  16. Jaycase

    Jaycase Meyvn (1,214) Jan 13, 2007 Illinois
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    No, I agree whether it would hold up in court is another matter. It's likely never to get to that point anyway because of the associated costs with fighting it.
     
  17. WIexile

    WIexile Initiate (56) Jul 20, 2017 Michigan

    A certain company is starting to act a little like the Goliath they wish to topple..

    Interesting they use the word "Head" brewer. Chris, to my knowledge, was just a "Shift" brewer...
    Maybe they think adding the title will add some supposed weight to there BS case, or perharps just the news articles f-up.

    Anyway is TG really scared of a brewery no one has heard of? (Yes I know people have heard of them.)
    They need to stop worrying about other breweries, and focus on some damn batch consistency.
     
  18. Rajaholick

    Rajaholick Initiate (136) Jan 9, 2011 Minnesota
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    They also need to focus on improving the shelf life of their beers like they've bragged about in the past. Pompeii that was killer at 3 weeks is a watered down shell of itself at 6 weeks.
     
  19. Number1Framer

    Number1Framer Initiate (115) Mar 13, 2016 Wisconsin
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    Flenker should change the name of Thew to "Goliath Brewing Company" and brew Pseudo & King as they originally were before TG jumped on the haze train then claimed that's how their beers always were. I liked their hops more before the haze set in and brought with it the usual chalkiness and heartburn that comes along with that damn gritty hype-fog. I still like their hops and still buy them as I have been lucky to avoid the mucky floaty-filled cans, but damn if I don't feel like TG's sun is setting for good for me.
     
  20. SeanBond

    SeanBond Savant (953) Jul 30, 2013 Illinois

  21. Freshlike1980

    Freshlike1980 Initiate (35) Oct 27, 2016 Illinois

    This isn't petty. It's business. The non-compete agreement is also standard for this position, in this industry. Its easy to portray the big or growing company as the villain vs some idiot who couldn't remember or read his terms of employment.
     
  22. PhilBallins

    PhilBallins Initiate (183) Nov 29, 2016 Illinois

    Business is often petty.
     
  23. eppie82

    eppie82 Meyvn (1,081) Apr 19, 2015 Illinois
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    As much as I personally find this petty on TG’s part, I have to agree with @Freshlike1980 : this is business and it’s about money no matter how much we’d like to think it was about good vibes and sharing. If that non-compete clause was written into his contract, then TG has the right to try and enforce it if they deem that the other party violated it. Whether it will hold up in court is another matter.
     
  24. SeanBond

    SeanBond Savant (953) Jul 30, 2013 Illinois

    Don't get me wrong; I have a non-compete myself, so I know how this works. It's still a shame, though. It looks like the new brewery is about 2 hours away (105 miles or so), so while that would still be within the 150 mile agreement (I think that's what it was), it's not like the guy is setting up shop next door.
     
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  25. HouseofWortship

    HouseofWortship Zealot (510) May 3, 2016 Illinois
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    Had the guy been outside of the 150 mile distro range his cease and desist would have shown up way past its freshness date.

    Did the guy leave on good terms? I have a hard time believing you'd shut down a good employee who left to better himself unless he did something dumb before leaving.
     
  26. SeanBond

    SeanBond Savant (953) Jul 30, 2013 Illinois

    This is what I'm curious about, too, especially since he was their head brewer.
     
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  27. FBarber

    FBarber Poo-Bah (2,455) Mar 5, 2016 Illinois
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    Doesn't matter if its literally next door or 149.9 miles away, or if he left on good terms or bad terms ... if TG doesn't enforce the non-compete in an employment agreement, then they risk losing them all. They have to enforce this. Now if you are TG, you hope that you're on good terms with the guy and he either 1) doesn't force you to have to file a lawsuit to enforce it, or 2) he comes to you and tries to negotiate out of the non-compete. And this is one the areas where a non-compete would actually carry some weight. This isnt a sandwich maker at Jimmy Johns, he was a brewer with access to all their recipes and proprietary information. A non-compete is not only reasonable, its frankly common. How did Virtue Cider get its start? Greg Hall had a non-compete so he started a cidery since the non-compete didn't cover that.

    There are plenty of things to gripe at TG for ... their often poor/antagonistic customer service, old product, etc. But this isn't one that I personally am going to hold against them.
     
  28. Chuckdiesel24

    Chuckdiesel24 Savant (914) Jul 6, 2016 Illinois
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    TG often comes across like the big bad guy, which I agree is certainly contradictory. This is not one of those cases.
     
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  29. William_Navidson

    William_Navidson Initiate (115) May 1, 2015 Pennsylvania
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    To your point that they "have" to enforce this or risk weakening their stance on future claims: yes, that's definitely the case. However, I think most of the criticism being lobbed at them is over putting this into the contract in the first place as opposed to merely enforcing it now.

    And I disagree pretty strongly. Non-competes have their place in *very* limited instances, but it's not appropriate here just like it wasn't appropriate at Jimmy John's. It's against public policy to implement and enforce a restriction on an employee that then wants to move on from the co. and use the talents he gained from TG elsewhere. There are already laws disallowing Brewer X from using their former brewery's proprietary information or IP, right (please correct me if I'm wrong)?

    Whether they're commonplace or not, a 2 year/150mi non-compete is a shitty restriction on the employee that unfairly stifles his ability to make a living without having to move, as are 99% of non-competes. The trend towards disallowing them can't come soon enough.
     
    #29 William_Navidson, Jul 31, 2018
    Last edited: Jul 31, 2018
  30. SeanBond

    SeanBond Savant (953) Jul 30, 2013 Illinois

    I'm not a lawyer, but is this actually true? I'm having trouble finding Iowa-specific info on this (yes, I'm bored at work), and I wasn't under the impression that they're like trademarks (need to be enforced at all times, or they're lost). If they are, then yes, I can understand why they'd enforce this one. However, as William said, I still consider the existence a dick move.
     
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  31. PhilBallins

    PhilBallins Initiate (183) Nov 29, 2016 Illinois

    Completely agree. TG are fully within their rights to try and enforce this non-compete. That doesn't mean we have to just go "oh well, it's business" and not have an opinion on what they're doing.

    For what it's worth, my non-compete basically just amounts to "don't give client info to a competitor and don't work for another company WHILE you're working for us".
     
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  32. William_Navidson

    William_Navidson Initiate (115) May 1, 2015 Pennsylvania
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    I thought that the other poster sounded right, but there's actually some caselaw stating that equitable estoppel isn't a viable defense to a non compete. GCA Services v. ParCou (federal case in Tenn. applying Ohio law). I can't find anything asserting otherwise, but this isn't my practice area and I also didn't do more than a 2 min google search so I'm happy to be proven wrong.
     
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  33. FBarber

    FBarber Poo-Bah (2,455) Mar 5, 2016 Illinois
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    Sure, thats totally fair - I was just pointing out that faulting them for enforcing this isn't fair - if you want to fault them for the clause itself, then thats a different discussion.
    I'm honestly not sure what laws Iowa has in place, but the easiest way to ensure that doesn't happen is often these non-competes. I tend to agree with you that non-competes are often overused - and there has been a legal shift to push back on them, but in this instance, it doesn't bother me. Its not like they slapped this on the bartender, or their packaging laborer ...
    Just playing Devil's advocate, but no one forced him to sign it. He also could have negotiated it when he signed it.

    This isn't the same thing as Trademark/Patent law, but if the employer isn't enforcing non-competes and then suddenly enforce one, the former employee can essentially argue an equity defense. Its the same as if someone from the company represents that they won't enforce it and then do - you can argue that as a defense.

    Thats totally fair. I wasn't trying to stifle discussion just pointing out that what they are doing on this end is reasonable. Again, whether it should be in there in the first place is a separate issue./

    You'll find that these cases are very fact intensive and dependent on the specific jurisdiction's case law. So what you get in Iowa may not be the same as another Iowa case or what you'd get in Ohio ...
     
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  34. SeanBond

    SeanBond Savant (953) Jul 30, 2013 Illinois

    I honestly figured this would be exactly why it wasn't necessarily true that they needed to enforce every agreement.

    To play devil's advocate for TG, I suppose they have an above-average interest in making sure their ex-head brewer doesn't steal recipes for things like a KBBS and MD...
     
  35. William_Navidson

    William_Navidson Initiate (115) May 1, 2015 Pennsylvania
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    I hear you, that makes total sense.

    ...

    It bothers me. I'm fairly certain there are much less restrictive ways if ensure that brewers aren't, like, explicitly stealing specific recipes. Using the skills they gained as brewers at TG to brew at other places should be expected; stifling the prospect of that being able to occur is shitty for this individual, for brewing, and for labor generally.

    Absolutely. But we all know that companies wield all of the power in these negotiations. This isn't an even playing field by any means (and things like non competes make it more uneven). And if this really is that commonplace, then the brewer had even less ability to negotiate it out. I'm more concerned about "the trend of breweries trying to enforce these" than I am about the "injustice of TG enforcing this against a single brewer," anyway.

    I could be wrong and it looks like there's scant case law on the issue; but everything I did find indicated that equitable estoppel isn't being recognized as a way to invalidate a non compete (see cite above, for instance). Again, you're right that this is probably state-specific but I lean towards assuming that it wouldn't be valid.

    You're right, totally agreed. I was just weighing in generally on "breweries trying to enforce non competes" (didn't know this was an issue before), and don't want to come across like I think I'm an expert on this situation. It's definitely state-specific, and I have no idea what the lay of the land is like in Iowa.
     
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  36. LambicPentameter

    LambicPentameter Poo-Bah (1,726) Aug 29, 2012 Nebraska
    Premium Trader

    Non-compete clauses, in general, are bullshit.

    They are punitive to workers and give employers undue leverage in terms of maintaining the employment relationship since they only put pressure on one side to keep the relationship intact. The ultimate result is that an employee is typically faced with a choice to either remain in a bad job or take on the burden of a major move to find a new job outside of the non-compete radius. And it's all done in the name of companies pretending as if a single former employee can actually tip the competitive balance against them.

    There are very few industries where a non-compete is actually worth anything beyond the leverage I mention above. And from what I can tell, they are extremely rare in the brewing industry.

    Plus, didn't Toppling Goliath fire Chris? I didn't think these things were enforceable when the employer terminates the employment relationship.

    Whatever the case is, this seems like petty bullshit more than an actual belief that his working at a brewery 90 miles away is going to actually pose competitive and/or financial harm to their business model.
     
  37. bound4er

    bound4er Champion (814) Jul 4, 2007 Wisconsin

    I'm not quite to the sun setting for good, but as more Brewing Projekt stuff becomes available in MKE I find myself shifting more of my dollars to them and less to TG.
     
  38. AZBeerDude72

    AZBeerDude72 Meyvn (1,394) Jun 10, 2016 Arizona
    Premium Trader

    This is a prime example why I never have and never will sign a non-compete. It controls your financial future and chains you to your current employer. You can fight them and most are not enforceable, especially if it denies you a means to earn a living. But its a pain in the ass and costs $$ and time. Your better off talking to boss/owner and working out terms and making it more in your favor.
    Cheers
     
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  39. oldbean

    oldbean Aspirant (272) Jun 30, 2005 Massachusetts

    Just because it's normal doesn't mean it's good or that TG isn't the villain. Child labor used to be legal and normal; it was still pretty villainous though.

    I don't know, I'm no free market fundamentalist, but I don't see how preventing someone from working in the field they're most productive in helps competition, or consumers, or really anyone except whatever company can afford to hire the most lawyers and drag out litigation the longest.

    Non-competes are bullshit.
     
  40. HouseofWortship

    HouseofWortship Zealot (510) May 3, 2016 Illinois
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    This is why America is so morally bankrupt. Integrity went out the window years ago. We sign agreements when it suits us and then cry and whine to get out of them when we no longer want to be in them....
     
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