Good Beer Hunting

Turning the Sling — Toppling Goliath Sues Former Brewer in Breach of Non-Compete

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In a court filing issued on July 26, Iowa's Toppling Goliath Brewing Co. sought an injunction to stop a former brewer from working in the same position for his brother's business in Cedar Rapids.

Chris Flenker, who worked at Boulevard Brewing before joining Toppling Goliath from 2015 until January 2017, was hoping to continue his career at Thew Brewing, which opened in March of this year. Started by Flenker's brother, Travis, the brewery is about 100 miles from Decorah, which falls within a 150-mile non-compete Toppling Goliath agreed to with Chris, according to the Associated Press.

The AP reports that Toppling Goliath's complaint focuses on the idea that "Flenker had access to its proprietary recipes, formulas and techniques and is using those trade secrets for gain."

According to the latest filings with the state, a hearing is currently set for Aug. 31.

Like so many other aspects of the beer industry, challenges around employment is another sign of growing up and the pains that come with it. On the production side, issues around copyright and trademark are one part, but the unique ramifications of beer's labor market, with lots of people looking to break in and not a lot of well-paying opportunities, can also encourage the need to move around in order to find an ideal position personally, professionally, or financially.

Across industries, "job-hopping" is becoming more common as employees focus on all aspects of fulfillment a livelihood could and should bring. A majority of Americans favor shifting positions every two years, and according to the Bureau of Labor Statistics, not only does the median number of years workers stay with a company continue to fall, but "food services and drinking places," as you may expect, have the lowest employee tenure. Latest figures place an average of 1.8 years at such jobs which, in theory, should cover the brewing industry. By one estimate, the average person changes jobs 10 to 15 times over the course of a career.

It's not the first time an employment issue has come up for Toppling Goliath. In a 2015 story in The Growler, Michael Rietmulder reported that expansion and contract brewing decisions caused internal tensions between founder Clark Lewey and then-brewmaster Mike Saboe, which led to Saboe's resignation as well as another brewer.

"Neither would speak on the record about what exactly happened that day," Rietmulder wrote, adding that Saboe "felt Lewey had publicly taken credit for beers he created."

Those wounds apparently healed quickly, as Saboe returned to Toppling Goliath a few months later.

For beer specifically, it wasn't that long ago that non-competes focused on upper-level management. In 2011, Boston beer accused Anchor Brewing of poaching their Northern California district manager, who joined Anchor as a managing distributor for Marin, Sonoma, and Napa counties. When Judd Hasuner started at Boston Beer, he reportedly signed a non-compete clause valid for one year after leaving the company, maker of Samuel Adams. The Los Angeles Times reported Boston Beer claimed the move was to obtain trade secrets.

Just last year, Summit Brewing filed a lawsuit against a former vice president of sales and sales market manager for essentially doing the same thing.

"Of course, anyone who watches the industry without pompoms knows there are limits to its collaborative spirit," GBH's Dave Eisenberg wrote at the time. "And trade secrets—recipes, for example—are known to follow brewing talent out the door when producers take a job elsewhere. But because copyright law does not protect recipes 'that are mere listings of ingredients,' such secret-sharing is pretty difficult to prove, and it doesn’t typically result in legal action."

In November 2017, a Reddit user claiming to be a current employee of Boston Beer outlined a list of complaints against the brewer, including issues with a non-compete clause.

"In your employment packet you sign to accept the job, you'll find a 10 page non-compete agreement," they wrote. "One they conveniently do not mention until you are vested in the opportunity at the end of the hiring process. So if you decide to leave to go work for a genuine Brewer, you'll get slapped with a lawsuit, so no beer for you. Additionally, you can't work for ANYONE that sells ANYTHING that competes with them – that includes: FMBs, ciders, beer and alcoholic water - you have just sealed yourself out of the industry for a good long while. Not even ABI or MillerCoors makes you sign a non-compete. Think about that."

(During the reporting of this story, GBH confirmed with MC and ABI brewers that, in their relatively low-level brewing positions, they were never asked to sign non-competes.)

Whether a globally-known brand, regional powerhouse, or a small and independent company building a neighborhood business, it's probably only a matter of time before the kind of lawsuits that Toppling Goliath is pursuing become more common. At its core, brewing remains something of an apprentice position. Pros typically start low in their companies—keg washer or even volunteer—and work their way up. But when the artistic side of this manufacturing position comes into play, it only seems reasonable brewers might want to find new ways to expand their skills and limits. Even famed brewer Mitch Steele needed a fresh start.

"Loved my time at Stone, loved the people at Stone," Steele told GBH last year. "But it was just getting to the point where the idea of doing something a little different was exciting. So that’s really all it was."

Noteably, an interest in professional development doesn't include the personal side for switching jobs, which impacts people all over in any industry. Maybe it's moving closer to home. Maybe it's going into business with family.

The same can likely be said for how such things will continue to change for peers who hone brewing talents at one company and may need a change in scenery to accomplish their goals. It only feels strange because, while these things happen all over, all the time, the combination of creativity and business, tied together by beer, presents an ever-growing collection of ideas (and, ultimately, "secrets") that could be proprietary—just like knowing the perfect amount of Citra for the next hit IPA.

—Bryan Roth