Just in time for grilling season in the Midwest, Hormel Foods Corporation (“Hormel”) filed a federal lawsuit in the District of Minnesota against its competitor, Johnsonville, LLC (“Johnsonville”), and two former Hormel employees, alleging that Johnsonville undertook “a coordinated effort to interfere with Hormel’s employment relationships and obtain Hormel’s confidential, proprietary, and trade secret information.” Essentially, Hormel is alleging that, through a multiyear scheme, Johnsonville sought to obtain Hormel’s trade secret sausage recipe, among other things.
Let us ketch-you-up on the facts of this spicy complaint: Hormel claims its former Director of Operations, Brett Sims (“Sims”), wrongfully solicited another former Hormel employee, Jeremy Rummel (“Rummel”), among others, to join Johnsonville after Sims himself joined the competitor in 2023. Such conduct allegedly violated his employment agreement, which Hormel contends Johnsonville knew or should have known of as Sims agreed to provide a copy to any potential employer. His agreement remained in effect for one year after his termination with Hormel. However, according to the complaint, the solicitation attempts allegedly took place over two years, as Rummel did not join Johnsonville until 2025, and Hormel is relying on a tolling agreement in the agreement to prohibit this purported conduct.
In what would have made Hamilton’s Leslie Odom Jr. quite jealous, Rummel, as Hormel’s Director of Operations, allegedly knew “how the sausage gets made” and had access to Hormel’s highly sensitive confidential, proprietary, and trade secret information, which Hormel claims he wrongfully sent to his personal email address after accepting employment from Johnsonville, in violation of his employment agreement. Hormel alleges this was an attempt “to take Hormel’s confidential business information and trade secrets to Johnsonville for the express purpose of exploiting the information for Johnsonville’s benefit, and to Hormel’s detriment, in the marketplace.” Which, in Hormel’s allegations, would present a wurst-case scenario!
In an attempt to find out how the sausage stealing plan was being made, Hormel confronted Rummel with evidence of the allegedly wrongful email activity. While Hormel claims Rummel initially denied such conduct, he ultimately admitted that some of the emails he sent to his personal email account contained confidential and proprietary Hormel information. Hormel subsequently imaged Rummel’s phone and email and remediated the device.
Hormel, based in Minnesota, chose to file suit in Minnesota District Court against Johnsonville, located in Wisconsin, Sims, who resides in Wisconsin, and Rummel, who resides in Iowa, based upon a choice of law provision in Sims’ and Rummel’s employment agreements.
With this as background and food-puns aside, a number of interesting topics will bear monitoring in this case, including:
- Is Hormel’s tolling agreement against Sims effective? While Sims purportedly started soliciting Rummel in 2023, Rummel did not leave Hormel’s employment until 2025, well after Sims’ employee non-solicitation obligations ended. Since Hormel only experienced the loss after Sims’ restrictions ended, can it rely on a tolling agreement to assert its claim?
- How does the choice-of-law provisions play out for a Wisconsin resident (Sims)? Wisconsin has very precise rules as it relates to post-employment confidentiality obligations. If the employment agreement fails to contain a durational limit on the disclosure of confidentiality obligations, Wisconsin courts have deemed the entire agreement invalid, including out-of-state choice of law and venue provisions as well as other appropriate restrictive covenants. With a clear choice-of-law fight on the horizon, it will be curious to see what law the District of Minnesota employs.
- Can there be trade secret misappropriation where Hormel remediated Rummel’s device before he left for Johnsonville? Trade secret misappropriation requires improper use or acquisition and damages to the other side. While the complaint is light on facts as to the acquisition timeframe, it seems clear that Hormel remediated the devices in advance by deleting the allegedly misappropriated documents. Does Hormel intend to pursue an inevitable disclosure-type remedy? And, if it does, given that Rummel cooperated in the remediation efforts, does his conduct display the sort of duplicitous conduct necessary to demonstrate that the former employee is incapable of compartmentalizing the information such that he should be enjoined from holding a position?
- How does discovery unfold given Hormel’s allegations that Rummel sought to protect communications with Johnsonville’s counsel during remediation? Hormel seems to rely on this as evidence that Johnsonville tortiously interfered with Rummel’s agreement with Hormel, but the trickier issue will be how this plays out in discovery when either or both of Johnsonville and Rummel seek to protect these communications, and when Hormel inevitably argues they are not privileged because Rummel had other counsel.
How the District of Minnesota answers each of these issues will provide interesting insight, particularly where the analysis may require the court to consider interplay between Minnesota, Iowa, and Wisconsin law, along with certain discrepancies between the Minnesota Trade Secrets Act and Defend Trade Secrets Act. As this case continues to sizzle and heat up, please contact the authors of this post or your regular Saul Ewing attorney if you have questions about your employment agreements or potential trade secret violations.
