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Trade secrets case could have implications in California

In most work-related breach of contract lawsuits involving alleged trade secrets violations, we typically see companies involved that manufacture things like computer chips, cars or other sophisticated technology. One recent trade secrets case filed in U.S. district court may interest California readers as it involves something that doesn’t seem to fall into the high-tech world at all; the two companies involved in this lawsuit sell organic milk.

Horizon Organic, which is owned by Dean Foods, is one of the largest organic milk suppliers in our country. They recently filed suit against Organic Valley, which is the second biggest supplier of organic milk in the U.S.

Horizon Organic alleges that the employee who was their dairy operations manager for milk quality and supply signed a nondisclosure agreement. They claim that they filed the lawsuit because neither the former employee nor his new employer would talk to them about their supposed issues.

Their lawsuit stated that the former employee had access to many of the company’s trade secrets, including its supplier list and sales demand projections. Organic Valley, on the other hand, seems to believe that the lawsuit is meritless. Their spokeswoman claimed in an email that Horizon’s lawsuit basically amounts to the company claiming that the individual must be prohibited from working for any competitor in any capacity after years of working in the dairy industry.

One advocate who supports family farms believes that this lawsuit may be just a way for the larger company to try and intimidate the smaller company. He reported that there are only 2,000 organic dairies in the country and not too many trade secrets in this particular industry. California businesses involved in similar trade secrets disputes may find this case interesting to watch since any decision made could have implications on their own lawsuits.

Source: Bloomberg Businessweek, “Organic Milk Rivals in a Tussle Over Trade Secrets,” Susan Berfield, July 25, 2012