Maker of Woodchuck Hard Cider Sues Ex-Employee for Stealing Trade Secrets
When Leonard J. Ciolek, a national accounts manager for Middlebury-based Green Mountain Beverage (makers of Woodchuck Hard Cider), resigned this March, he wrote that "incredible opportunities" had lured him away from a position he had only held for seven months.
Why would Ciolek walk away from a six-figure salary, a $6,900 annual car allowance, a possible $25,000 bonus and the chance to keep living in his upstate New York home? To start his own cider company. At least that's what GMB alleges in a 24-page lawsuit filed in U.S. District Court in Burlington today.
GMB hired Lenny Ciolek for the plum position in July 2010, tapping his 25 years of experience as an exec with Mike's Hard Lemonade to grow accounts in New England. And of course, they had Ciolek sign a non-disclosure agreement. By December, however, they allege that Ciolek's plans for McKenzie's Hard Cider were in full swing. Based on a forensic examination of his company laptop, he sent an email that month to a friend to "sample some McKenzies," worked on a business plan, and honed labels with a New York design firm.
By February 1, 2011, when McKenzie's Beverages became a New York corporation — with a home address at Mayer Bros., an apple cider producer in West Seneca — Ciolek had labels and packaging planned and ready, GMB alleges. And if their allegations are true, Ciolek brazenly stole ingredients and nutritional information from Woodchuck bottles for his new cider, as well as promoted his launch to GMB's customers.
The lawsuit alleges that although Ciolek did his best to cover his tracks — deleting his profile from a company laptop after he left — his former employer was able to pinpoint the dates on which Ciolek accessed pricing reports, margins, and presentations, then copied these to external drives. And they've confirmed that the nutritional information on the side of McKenzie's three flavors of cider — Original, Green Apple and Black Cherry — is identical to that of Woodchuck Cider.
Most damning, however, is one fact: that the U.S. trademark for McKenzie's — filed on February 4, a full month before Ciolek's resignation — is owned by Julie Ann Ciolek, his wife.
The firm that designed the vintagey-looking McKenzies packaging, NYCO Design Agency, features the package prominently on their website, and the cider is for sale, at least in New York. Green Mountain Beverage, in the meantime, is seeking an injunction and monetary damages against Ciolek, and accusing him of breach of contract, among other things.
Should GMB be flattered that someone tried to pull an Arthur Slugworth on them? Hardly.