Seyfarth attorneys Erik Weibust, Alison Eggers, and Anne Dunne recently published an article entitled “Why It’s Important to Bake Restrictive Covenants into Food and Beverage Industry Agreements” in Retail & Food Best Practices, an industry publication for the retail and food industry.
Recipes, ingredients, formulas, and processes are sometimes kept secret for generations in the food and beverage industry, and protecting these secrets can be essential to a company’s survival. Threats to trade secrets are not only limited to high-tech companies and defense contractors, nor is trade secret misappropriation solely the provenance of hackers and hostile foreign actors. Indeed, most misappropriation is carried out by employees and business partners, either intentionally or because of a basic lack of understanding of one’s obligations. But once a secret is out, it is no longer a secret, even if the disclosure was not malicious or intentional. Likewise, customer and vendor relationships are paramount in the food and beverage industry, and a brand or a relationship that took years to cultivate can be destroyed in an instant. One relatively simple way for companies in this industry to protect their trade secrets and goodwill is to include restrictive covenants in their agreements with employees, franchisees, distributors, vendors and other business partners. In their article, Erik, Alison, and Anne discuss how best to bake these types of provisions into food and beverage industry agreements.