Biomin Am., Inc. v. Lesaffre Yeast Corp.

• Decision Date: 30 March 2020
• Docket Number: Case No. 2:20-cv-02109-HLT
• Parties: BIOMIN AMERICA, INC., Plaintiff, v. LESAFFRE YEAST CORPORATION, BRETT BELL, and ANNA CROCKETT, Defendants.
• Court: U.S. District Court — District of Kansas

BIOMIN AMERICA, INC., Plaintiff, v. LESAFFRE YEAST CORPORATION, BRETT BELL, and ANNA CROCKETT, Defendants.

Case No. 2:20-cv-02109-HLT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

March 30, 2020

MEMORANDUM AND ORDER

Plaintiff Biomin America, Inc. ("Biomin") brings this action against Defendant Lesaffre Yeast Corporation ("Lesaffre") and two former Biomin employees—Defendants Brett Bell and Anna Crockett—who now work for Lesaffre. Doc. 1. Biomin also moves for a temporary restraining order under Federal Rule of Civil Procedure 65. Doc. 8. Biomin's motion seeks to enforce the Non-Competition, Non-Solicitation, and Confidentiality covenants in the employment agreements Bell and Crockett executed during their tenure at Biomin, which Biomin claims they have breached. The motion is fully briefed.¹ In moving for a TRO, Biomin seeks extraordinary relief and thus bears the burden of clearly and unequivocally establishing the need for such relief. Because the Court finds that Biomin has not met this burden on the current record, the Court denies the motion for TRO.

I. BACKGROUND

A. New Arguments and Evidence in Reply and Surreply

Before reciting the pertinent facts and addressing the merits of the arguments, the Court first addresses certain outstanding issues regarding Biomin's reply and Defendants' proposed surreply. Following submission of Biomin's reply, Defendants sought leave to file a surreply to address two areas of new argument and evidence advanced in the reply. Doc. 28. The Court entered an order granting the motion for leave with the caveat that it would decide later—at the time it ruled on Biomin's motion for TRO—whether to disregard any new information in the reply or consider it and the surreply. Doc. 29; see also Beaird v. Seagate Tech., Inc., 145 F.3d 1159, 1164 (10th Cir. 1998) (noting that when new evidence or argument is included in a reply, a court may either "permit[ ] a surreply" or "refrain[ ] from relying on any new material contained in the reply brief").

The Court hereby exercises its discretion to permit Defendants' surreply (Doc. 30) and thus considers the new arguments and evidence presented in Biomin's reply—and Defendants' response to those new arguments in their surreply—in its resolution of the TRO motion. But, although the Court considers these materials, the parties should not assume this will be the course of the case going forward. The Court expects the moving party to include its arguments and evidence in the opening motion. Late submissions and new facts and evidence offered in a reply that were available at the time the initial motion was filed will likely not be considered in the future.

B. Factual Summary²

The following background is a high-level summary of the facts pertinent to Biomin's motion for TRO. More specific facts are incorporated into the Court's analysis as necessary.

1. The Parties

Biomin is an animal health and nutrition company based in Overland Park, Kansas. Doc. 1 ¶¶ 6, 14. Biomin develops and delivers feed additives for livestock—including poultry, swine, ruminants (particularly cattle), and aquaculture—and is considered a market leader in mycotoxin risk management products and solutions as well as salmonella control products and solutions. Id. at ¶¶ 14-15. Biomin's products include: (1) Biofix®, a feed additive that counteracts secondary metabolic products of molds present on almost all agricultural commodities; and (2) Poultry Star®, which, among other things, promotes beneficial gut microbiota and reduces bacteria like salmonella and E. coli in multiple species of poultry. Id. at ¶ 16.

Lesaffre, meanwhile, is a Wisconsin-based manufacturer and seller of yeast products. Id. at ¶ 8; Doc. 25-2 ¶ 13. Lesaffre supplies yeast to the baking industry (as an ingredient in products like breads, rolls, and dough) and also operates a Phileo business unit that supplies yeast to the agricultural industry to be used in feed additives for various animals. Doc. 25-2 ¶ 13. Biomin alleges that two of Lesaffre's yeast-based products, SafWall® and SafMannan®, directly compete with Biofix® and Poultry Star&reg. Doc. 1 ¶ 18.

Both Bell and Crockett—who are based in Georgia and North Carolina, respectively—are former Biomin employees who are currently employed by Lesaffre. Id. at ¶¶ 9-10, 20, 22, 27, 29. For more than five years, Bell was Sales Director of Biomin's Ruminant and Poultry Divisions.Id. at ¶ 20. In this position, Bell was responsible for and oversaw Biomin's entire ruminant sales team in every state of the United States, and, as of May 2018, also assumed responsibility of Biomin's nationwide poultry sales team. Id. at ¶ 21. Crockett, meanwhile, was a Key Account Manager for Biomin's Swine and Poultry Divisions, wherein she reported directly to Bell (until his resignation) and was assigned Biomin's "key" customer accounts, meeting with customers in a total of 16 states (including Kansas) and Canada. Id. at ¶¶ 27-28.

2. The Employment Agreements

In connection with their employment with Biomin, both Bell and Crockett signed Biomin's Proprietary Information, Confidentiality, Non-Solicitation, and Non-Competition Agreement (collectively, the "Employment Agreements"), which governs certain contractual obligations with Biomin. See Docs. 1-1, 1-2.

As the title implies, the Employment Agreements impose several restrictive covenants.³ The Non-Competition provision states in pertinent part:

Non-Competition. I agree that I will not, for one (1) year following the termination of my employment with the Company by either party . . . engage or participate in any business that is in competition in any manner whatsoever with the Company's business, in any state of the United States or in any other country in North America in which the Company has solicited, bid for, contracted for, or provided products or services to customers in excess of $25,000 at any time within two (2) years preceding the termination date of my employment; provided, however, that this restriction shall not be deemed to prohibit my employment with a competing organization in a capacity which is not, directly or indirectly, involved with or supportive of the competing portion of such competitive organization's business, and I am employed by such competitive company to perform services of a different type than the services I performed on behalf of the Company.

Doc. 1-1 at 2; Doc. 1-2 at 2 (emphasis in originals). The Non-Solicitation provision, meanwhile, provides:

Non-Solicitation. I agree that I will not, for one (1) year following the termination by either party of my employment with the Company . . . do business with, solicit business from, or engage in business with, any person or entity which is or has been a customer of [the] Company during the term of my employment with the Company and with whom I dealt by reason of my employment with the Company, where such business is in competition with the business of [the] Company.

I agree that I will not, during my employment and for one (1) year following the termination by either party of my employment with the Company . . . : (i) personally participate or be materially involved in any manner in the hiring or attempt to hire as an employee, or in any other capacity, any person who is at the time of such hiring an employee of the Company; (ii) otherwise, directly or indirectly, induce or attempt to induce any employee of the [C]ompany to leave the [C]ompany's employ; (iii) engage in any activity that would cause any employee to violate any agreement with the Company, or (iv) otherwise interfere with the employment of any such employee.

Doc. 1-1 at 2; Doc. 1-2 at 2. Finally, the Confidentiality provision states:

Confidentiality. At all times, either during my employment with the Company or following termination of such employment by either party for any reason, I agree to keep confidential, not to disclose, assign, transfer, convey, communicate, or make any use of any trade secrets . . . , confidential information, knowledge, or other information, directly or indirectly, except as required in the course of my activities on behalf of the Company or as specifically authorized by the Company.

. . .

Confidential information includes, but is not limited to: information proprietary to the Company and not generally known, including . . . any subject matter pertaining to the business of the Company or any of its clients . . . Confidential information also includes any and all data and information relating to the business of Biomin® USA whether constituting a trade secret or not which is or has been disclosed to employee as a consequence of or through hisrelationship with Biomin® USA, which has value to the [C]ompany and is not generally known by competitors of the [C]ompany.

I agree that the nature of my employment will require the Company to disclose to and grant me access to Confidential Information, and I may also contribute to the development of Confidential Information on behalf of the Company. I agree that disclosure of Confidential Information to others would cause the Company irreparable harm. I agree that I shall not disclose to any person or utilize for my own benefit any trade secrets of the [C]ompany at any time without the express written authorization of the [C]ompany.

Doc. 1-1 at 1; Doc. 1-2 at 1.

3. The Dispute

On June 12, 2019, Bell notified Biomin's president, Simon Walley, that he would be leaving his employment with Biomin to accept a position as the North American Director of Lesaffre's Phileo division. Doc. 25-2 ¶ 3. Following a transitional period, Bell officially left Biomin on July 5, 2019. Id. at ¶ 5. Approximately six months after Bell's departure from Biomin, Crockett followed suit, tendering her resignation on December 27, 2019. Doc. 25-3 ¶ 3. Crockett subsequently reached out to Bell regarding the potential of joining him at Lesaffre. Id. at ¶ 4. Lesaffre ultimately offered Crockett a position as a Regional Sales Manager with its Phileo division,...