David Grinnell, vice president of brewing for the Boston Beer Company, gavels trading closed on the bell podium of the New York Stock Exchange, to highlight the launch of Samuel Adams' newest brewing innovation, Sam '76, on April 6, 2018. (Photo: AP Photo/Richard Drew)
On Thursday, a former employee of The Boston Beer Company told a Massachusetts judge that the brewing giant enforces "draconian" noncompete agreements that are "unreasonable, unconscionable and unenforceable" under state law. It's the latest in a series of lawsuits accusing the company of interfering in the job prospects of its former workers.
Plaintiff Casey Gospodarek was reportedly hired by Boston Beer Co. as an entry-level sales representative in 2020. After resigning from her position in March, Gospodarek was informed by upper management that she couldn't apply for or accept jobs from any competitors within 25% of Boston Beer's wholesale price. Gospodarek argues that the stipulation, intended to protect "trade secrets," effectively barred her from working within the beer industry as she sought reemployment.
The Boston Beer Co. is the fourth-largest brewer in the U.S., responsible for best-selling brands including Samuel Adams, Twisted Tea, Truly Hard Seltzer and Angry Orchard. The company sells products in every state in the country and posted a total revenue of over $2 billion in 2023.
"The use of such draconian non-compete agreements for low-level at-will sales representatives like Ms. Gospodarek limits the ability of employees to move to a new state and find employment where Boston Beer sells its products; hinders the upward mobility of workers looking for higher wages or advancement; and suppresses wages for Boston Beer employees, who have limited negotiating power with both Boston Beer and potential new employers," the filing reads.
Attorneys for Gospodarek claim she was paid only $3,000 minus taxes and withholdings in consideration for the noncompete clause she'd signed at the time of hiring. She's now stuck between "a rock and a hard place" as the company threatens to take legal action against any prospective employer who hires her.
The basis of the case rests on whether or not Gospodarek was privy to trade secrets. Boston Beer attorney Jessica S. Jewell argues that the former employee was aware of "very specific confidential information," specifically to do with customer and account relations.
Gospodarek's attorneys are less than convinced. The identities of Boston Beer's wholesalers and retailers are reportedly public knowledge within the industry, as are the wholesale prices that they charge. The filing quotes a Massachusetts and Illinois law that says non-compete agreements “cannot make secret that which is not secret."
"Boston Beer knows it cannot legitimately enforce the terms of its non-compete agreement, but that has not prevented Defendant from suing at least two former employees and threating to sue several others in the past—and Ms. Gospodarek now," the filing added.
According to Brewbound and Boston.com, Boston Beer has previously enforced noncompete clauses with a similar tenor. The company has been sued by former employees John Brennan, Maxx Hockenberry and Juss Hausner over the past year, all of whom were sales representatives subject to legal action under the one-year noncompete agreement. All of their cases are still ongoing.
“We invest a substantial amount of time, effort and money on training, and we share sensitive information widely with our coworkers to help them understand our strategy and build goodwill with our customers,” a Boston Beer spokesperson told Brewbound. “A one-year non-compete helps protect customer goodwill, prevents confidential information from immediately being used to benefit a direct competitor, and enables us to benefit from our best-in-class training programs.”
