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Angry Orchard gets really mad: Boston Beer sues over manager who went to work for an East Boston cider rival

Update, 2/9/24:: Boston Beer Corp. has agreed to drop Soudant from its lawsuit, which continues against Downeast Cider House.

Boston Beer Corp., which makes both Sam Adams beer and Angry Orchard cider, yesterday sued a former manager and Downeast Cider House, the East Boston cider maker where he went to work after quitting Boston Beer this spring.

Boston Beer, which started in Jamaica Plain but which is now headquartered in the Seaport, charges that Brian Soudant took away trade secrets - not just in his own memory, but on a USB stick - and will inevitably use the information to help Downeast harvest sales from its Angry Orchard line, in violation of non-compete and non-disclosure clauses in the job agreement it says Soudant signed after his Boston Beer hiring in 2015.

In its complaint, filed in Suffolk Superior Court, Boston Beer acknowledged Downeast "did not know or use the information" it charges Soudant downloaded from the Boston Beer system before leaving, but included the company in its suit just in case, because if it did gain access to the information it "could unfairly identify, contact, and undersell to Boston Beer's customers."

Boston Beer wants Soudant barred from working for Downeast for at least a year after he last received a Boston Beer paycheck and enough damages to make him think twice about ever doing something like that again. Plus, it specifically asked for $20,000 as compensation for the training it says it provided Soudant over the years following his 2015 hiring, training it says went down the drain when he left like he did.

The company says that as a senior manager, Soudant was privy to "sales and investment strategies, distribution levels, specific distribution targets, and sales incentive program details," all of which was "guarded, secret and confidential."

Boston Beer says that even if Soudant didn't hand over the USB stick to Downeast, where he is now senior vice president for marketing, it's impossible he would not use the core information he gained in nearly 8 years at the company:

Among many other things, Soudant is armed with knowledge of Boston Beers plans to continue to grow Angry Orchard - a product directly competitive to Downeast's primary markets - in the highly competitive cider market. To properly do his job for his new employers, Soudant cannot help but use the Confidential Information. It must inform his decisions about pricing strategies with particular customers, and introducing new products or new promotions to counter what he knows Boston Beer is planning. The fact that he will be performing marketing duties, and thus participating in the development of Downeast's plans and strategies to beat the competition in the market, reinforces this conclusion. It is inevitable that he will interfere with Boston Beer's legitimate business interests (protection of Boston Beer's Confidential Information in his new position with Downeast.

Plus, Boston Beer alleges that Soudant used "an external USB device" to download bushels of proprietary Boston Beer information after he submitted his two week's notice in April of this year.

The complaint says that as Soudant was filling out his last days at Boston Beer, Jim Koch himself "engaged in discussions" with Downeast founder Ross Brockman about the way he had hired away Soudant - and to warn him about the non-compete and non-disclosure clauses in Soudant's Boston Beer contract.

But, the complaint alleges, Brockman brushed off the eminence grise of the craft fermented-beverage industry, that Downeast had "done nothing improper in offering [Soudant] a job, and that while Soudant might have an agreement with Boston Beer, Downeast did not.

Soudant and Downeast have until Feb. 14 to answer the suit.

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Comments

Downeast's cider is way better then Angry Orchard.

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...there are dozens of producers that are way better than Downeast.

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Everyone has their fave, and we'll like or not like either of them. I'm unhappy that Downeast is undercutting on the pricing, so most bars have dumped 'cider they used to carry' and now only have downeast, which is killing the ability to have a variety...

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There are a lot of cideries in New England, and several with enough volume to supply bars, and that are a lot better than Downeast. Farnham Hill comes to mind, and while Artifact has strayed a bit, on the whole they're miles better than the alcoholic apple juice that passes for cider in most brands.

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They have everything from sweet to extra dry.

I picked up some of their Three Brothers Blend and it is a fantastic old school funky apple cider. Very dry and relatively complex.

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Some of that is sour grapes (apples?), some of it has some traction.

Downloading the files? That's a big no-no.
Training you provided (over the years??) that you lose when an employee leaves? Sorry, fuck off. If you didn't want to "lose the value of that training", then you should have kept him happy/employed.
Internal knowledge? Well, that'll depend on the quality of any confidentiality agreement that the employee signed. It would likely cover things like names of customers, but very unlikely cover stuff like the sales methodology (and even if it did in writing, there's going to be a barrier to enforcement as that goes back to the fact that the employee gets to take their experience/business acumen with them when they leave).

MA has also been pretty down on enforcing Non-Competes in my understanding as well. So, barring him from working for a competitor for a year is likely not going to fly either.

IANAL, but it sounds like they should get back to fermenting instead of fomenting.

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If he really did take client lists and internal market data, that's probably solid footing for a suit. The rest seems shaky.

The trend of employers trying to claw back training costs from employees really needs to stop. It's part of the cost of doing business. While there's probably a few people out there who abuse(?) employee training to their own ends, the vast majority do not.

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the training in 2015.

Koch should fire his lawyers. They are charging him for bogus work.

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wasn't that the theory? You had to pay for your apprenticeship through years of service?

if BB didn't want this thing to happen, why didn't they have a non-compete clause in their employment contracts? Limited in time and scope, of course.

Drink Harpoon the true Boston brewery

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According to the complaint, they did have a non-compete clause. But if it was written by the same lawyers BeerCo is using now, it's probably be just as bogus and unenforceable. Massachusetts allows non-compete agreements under very narrow circumstances.

https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Sec...

Note especially the garden leave requirements: the employer must continue to pay the ex-employee at least half of his salary during the entire period during which he can't compete. Did they even begin to do that?

I think the funniest part of the complaint is the part where BeerCo says:

Boston Beer's forensic imaging of Soudant's computer revealed that Soudant connected an external USB Device to his Boston Beer computer and accessed and/or downloaded Boston Beer's confidential and proprietary information in the days after he submitted his resignation to Boston Beer.

Note that: "accessed and/or downloaded." That means there is no evidence that Soudant downloaded the information. If he had done so, they'd likely have evidence of that from the same means they know he connected a USB device, and accessed the information. All they have is two separate things: he plugged in a USB drive, and he looked at information. Looking at that information was his job, which he was still doing and they hadn't stopped him from yet. Using USB drives? Oh FFS, tell me nobody else in the office ever used a USB drive. Later on, it says, "Upon information and belief, Soudant downloaded..." yeah, they got the information that Souder used a USB drive, and the belief that he stole their info with it. Between the two, they got nothing. This is a lawsuit intended to frighten, not to win.

"To properly do his job for his new employer, Soudant cannot help but use the Confidential Information." Oh, really? So nobody else can ever flog cider without using BeerCo's Confidential Information? How in the world did I manage to buy some Stormalong at Star Market the other day?

The non-compete clause as written in the Employment Agreement and cited in the lawsuit does not comply with Mass. Law. Want to bet the law was updated and the lazy BeerCo lawyers never updated the agreement?

I can't imagine anyone reading this booooogus lawsuit and then taking a job with Boston Beer. It's utterly disreputable.

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The suit says a "USB Device" was connected to the guy's work computer, and not a "USB Drive." A "USB Device" could be a USB drive, but it could also be a mouse, a keyboard, a smartphone (for charging), or one of myriad other peripherals.

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If you pay $100k to put someone through a college certificate program and have them disappear the day they get it, "because they could earn more elsewhere" that's not a "pay your employees better" issue, that a "your competitors are keeping costs down by getting you to train their employees" issue. Whether or not he has to pay it back is going to be based on the terms he agreed to when he got the training, most companies with education reimbursement programs require a few year commitment, either before or after.

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Maybe try good pay and working conditions instead of spurious lawsuits?

Just a thought ...

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Non-competes should be illegal, period.

If I were in charge, not only would they not be allowed, but companies would be fined for even asking you to sign one.

Once you walk out the door, or worse, get fired, your former company has no business telling you what you can't do, especially that you can't work in your own field of expertise.

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So he may have or not we're not sure and even if he didnt we trained him so....pay us.

TBH, it sounds like Kochs just having a tantrum.

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The dude is an utter command and control fascist who supports fascism.

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Boston Beer should've just made the date of his resignation period as his last day (paying out his notice period, of course) and terminated all systems etc access. This was a rookie mistake in their part and that hiring manager and HR Partner should be fired.

Going after someone for a "training" fee post employment is just absurd. Also, without reading the employment agreement, unless there was a paid garden leave provision included as a cooling off period, they've got no standing to ask for a one year period before he starts working at a competitor, this is his livelihood after all.

On the flipsode, that Angry Orchard would continue to employ someone who has illegally procured proprietary information about a competitor, speaks to the moral amd ethical fiber of the organization and the guy who illegally procured the information.

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Especially this:

Boston Beer should've just made the date of his resignation period as his last day (paying out his notice period, of course) and terminated all systems etc access. This was a rookie mistake in their part and that hiring manager and HR Partner should be fired.

Seriously. This is why companies term people the day they give their notice... to prevent data loss. This is a rookie mistake. Boston Beer's big mistake. Their loss.

(Its also why I tell ppl, gonna give notice? Remove all your personal effects before you do, you may not get a chance to go back to your desk)

Now did it happen? Did he use the data? Find a way to prove it and then go after him for that (that much I agree with). But the rest. Nope.

And I agree that if he did steal data and AO is using it.. that says alot about them.

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I quit my job three months ago. Sending the email indicating resignation was my literal second-to-last action before handing another manager my key and walking out the door.

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In my experience, if you quit or are laid off, all of your access is immediately terminated (ID card, logins, etc.). The company will have somebody pack up your desk and ship it to you (have had this happen twice.) Security will escort you to your desk and let you take just your coat and umbrella, but that is about it.

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isn’t even the same league as Downeast. It’s funny but also kind of sad to see Boston Beer go from an early craft innovator to…not.

This guy was in the wrong if he did it, but I don’t think they’ll have to worry about Downeast switching things up to compete with them in the mass-market swill wars.

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Because they're using its apples to make boozy koolaid

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But what is Sam Adams good at these days? I feel like there's an underserved niche for higher quality non-IPAs out there. The Jack's Abby lane.

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And I thought I was the only one that cared.

It doesn't seem like they had a non-compete contract. Those should be outlawed.

Also, Computers can be encrypted. Emails can be encrypted. How expensive would it be to keep an employee from using USB sticks?

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Small producers are showing more pilsners, lagers and sours these days. But honestly, it's probably easier (and cheaper, as compared to sours) to just make utterly derivative hop-bomb IPAs forever. IPAs, the beer world's version of the emperor's suit of clothes.

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It was specifically designed to keep well on sea voyages to India. I suspect that it is cheaper to store.

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Any decent IPA is stored cold and drank as fresh as possible. After three months, any IPA is a skeleton of what it was brewed to be.

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Hodgson offered, instead of porter, a few casks of a strong, pale beer called barleywine or "October beer." It got its name from its harvest-time brewing, made for wealthy country estates "to answer the like purpose of wine" — an unreliable luxury during years spent bickering with France. "Of a Vinous Nature" — that is, syrupy strong as good Sherry — these beers were brewed especially rich and aged for years to mellow out. Some lords brewed a batch to honor a first son's birth, and tapped it when the child turned eighteen. To keep them tasting fresh, they were loaded with just-picked hops. Barclay Perkins's KKKK ale used up to 10 pounds per barrel. Hodgson figured a beer that sturdy could withstand the passage to India.

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I was referring to your comment that IPAs are easier to store than other beers and that’s not the case.

Your article is talking about barelywines, which are certainly not in the IPA family.

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The recipe was developed from barleywine. It is the origins of IPA.

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Easier storage of modern day IPA’s vs other beer types?

Or are you just giving me a history lesson? Which I’ll note was news to me and I appreciate you enlightening me

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But one thing Sam Adams is still actually quite good at (in my opinion) is variety. They don't do the "I put today's coffee grounds and some twigs of rosemary and sage in the fermenter, I call it Coffurkey IPA" bullshit that super-small indy labels try (and often fail miserably at).

But I have been to the Tap Room at Faneuil Hall and been really pleasantly surprised each time with the variety and quality of the options they make exclusively for there (which I'm sure if they really took off would become less exclusive). I do wish they'd rotate things a bit more so that each time means finding something new.

https://www.samadamsbostontaproom.com/whats-on-tap

It's the best thing in Faneuil Hall (I know, not a high bar to clear).

I'm also thinking of Utopias which I like (some find it way too sweet) that was made originally when very few were doing champagne yeast with beer or even barrel aging (aside from lambics, sours, etc.).

They do variety pretty well.

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but unfortunately, it seems like that's never the stuff that actually makes its way into cans or bottles.

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If you go to the producer's taproom, they are likely to have their crowdpleasers, but also other offerings that will never see the inside of a can or bottle - and some of these are amazing. I mentioned Artifact before - they have a couple of taprooms where you can find their better known ciders, but also stuff where they just didn't produce enough to make it worth canning. If you sort of like a producer's offerings, it's definitely worth a taproom trip.

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Up in Salem with a spot over at the Speedway in Brighton. They do mostly European style. Lower alcohol and less hoppy... Man they nail it.

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I keep forgetting that exists. Opened after I moved to a different part of Brighton (and then out of Boston entirely), and I never went.

I'll add that to the list of things I never did but need to do with Eastern Standard and the MFA.

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They have a taproom in Malden and tend toward seasonal Czech/German styles.

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I don't agree with trying to get money for training and the non-compete portion but can understand the fury over him stealing actual info. That alone should be a rather big punishment.

I do find it kind of funny though that he would wait until after he gave his notice to take the info. Seems like a rather stupid move. It also seems like a stupid move on Boston Beer to not turn around and cut off access immediately. I am not a fan of walking them out the front door with a box but giving someone two weeks of unrestrained access to your files when you are clearly bothered by their leaving seems stupid. Boston Beer even tried to intervene and stop it from happening. If I was in charge I would have cut off his access as soon as I got the notice and given him access on a controlled basis.

I worked for a company once that had to lay me off. I signed a non-compete clause when I was hired. In the meeting where I was laid off we negotiated my release and we left on good terms but I did laugh and say don't you dare think about trying to enforce that non-compete clause after laying me off. My former boss was caught off guard but I had already done my research when I warned him about giving lower level employees with no access to secrets these contracts to sign, that they ae fully not enforceable and that trying to drag a 22 year old to court because they jumped ship would be silly. Even though I was older than 22 I still thought it was silly that he thought his contract meant anything especially after laying me off. It was not his fault, we took a major external hit that sunk the business and getting rid of the highest paid worker who was not the owner made sense , but I needed him to know to not mess around.

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They're both crap.

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There are many better than Downeast but they make decent product. Angry Orchard on the other hand...

My favorite ciders come from Citizen in Burlington VT.

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I was unaware of this. I haven't had a Citizen Cider in years because there's better stuff available.

I think Artifact is your best bet for something that's got good distribution (in MA at least) and still pretty good products.

(fun fact: Artifact's former cidermaster is now brewmaster and co-owner of a really cool bar in Greenfield called Four Phantoms. Excellent beers and some interesting cider blends)

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One explanation for why the once dominant Massachusetts computer industry withered while Silicon Valley boomed, is that California effectively bans no-compete agreements, leading to a much more agile workforce that can easily be tapped for the Next Big Thing, and can shift from one company to another as fortunes change.

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I remember a story about an owner of Boston Beer expressing gratitude to Don the Con. I was saddened. But that is democracy. One is always free to associate and kiss up to scum no matter how disgusting and foul the scum.

Surprised Trump hasn't gotten into the brewing business. Given his propensity to pour bs down the throats of any bird that holds its beak up to him, he could make a mint. Given the ironic names of beers from small brews Donny the Dip@$%^ could call his beer Trump's Taint.

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It closed at $370.29 yesterday, with a PE of 70!

It's about where it was before COVID

It had a stupendous run-up during the pandemic, going from $370.79 on Feb 28, 2020, to $1294 on Apr 16, 2021, then plunging back down to earth at the beginning of 2022.

Koch was often on CNBC pumping the stock during the pandemic, mostly with Barstool Dave Portnoy .

What were buyers thinking? Casino gambling on Robin Hood with COVID checks?

https://www.marketwatch.com/investing/stock/sam

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Boston Beer acknowledged Downeast "did not know or use the information" it charges Soudant downloaded from the Boston Beer system before leaving, but included the company in its suit just in case, because if it did gain access to the information it "could unfairly identify, contact, and undersell to Boston Beer's customers."

Seems like they wouldn’t have a case against Downeast on its own otherwise?

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