Malteurop Sues Proximity Malt, Accuses Former Employees of Conspiracy

970 Malteurop Sues Proximity Malt

Malteurop, a global provider of malt to brewers and distillers, has filed a lawsuit against three former employees and their company, Proximity Malt, a craft beer industry-focused startup that was founded in February 2015.

In the suit, filed Dec. 17, 2015 in the Milwaukee County Circuit Court, Malteurop North America claimed that Proximity Malt and a member of its team stole confidential information that was used to help launch the new company. Both companies are located in the Milwaukee area.

In the 20-page complaint, Malteurop alleges that members of Proximity team began planning their new venture while still employed at the international firm, and carried out an electronic heist of nearly 10,000 confidential documents.

Proximity was founded by Dale West and Dale Bugajski, both former Malteurop executives. Bugajski left his position at Malteurop in July 2014 and West resigned in March 2015, according to the suit.

A third Proximity employee, Amy Germershausen, who had served as Malteurop’s director of commercial and craft sales until her resignation on Oct. 12, 2015, joined the new company as its vice president of sales and marketing.

Steve Furcich, a third partner of Proximity Malt, is not named in the suit. Also a co-founder of the startup, Furcich held various executive-level positions during his 28-year tenure at Archer Daniels Midland Company, the predecessor of Malteurop’s North American operations. According to his LinkedIn resume, Furcich left ADM in 2009, following Malteurop’s 2008 acquisition.  

The lawsuit

In the suit, Malteurop claims Germershausen, after giving notice of her resignation and in the day before joining Proximity Malt, downloaded and obtained thousands of documents — many of which contained “trade secrets,” — without her employer’s knowledge.  

“Without Malteurop’s knowledge or consent, an external hard drive was connected to Germershausen’s Malteurop computer and approximately 9,900 documents were copied,” read the complaint.

Malteurop suggested that Germershausen planned the “mass download” with West and Bugajski so the trio could use the information to benefit Proximity.

“Germershausen unlawfully obtained such information from the Mass Download in conspiracy with West and Bugajski,” the claim read. “West, Bugajski, and Germershausen agreed, combined, and acted with a common plan and purpose to misappropriate Malteurop’s trade secrets.”

Germershausen violated her signed confidentiality agreements and fiduciary responsibilities to the company, according to Malteurop.

The lawsuit includes nine additional claims against Proximity and the former executives, including allegations that Dale West violated his employment obligations by acting as a managing member of Proximity Malt while still working for Malteurop.

Per the lawsuit, Malteurop is asking the court for an injunction that would prohibit Germershausen from actively working with Proximity malt for 12 months and, in addition to restricting Proximity from using the “confidential information and trade secrets” that were allegedly lifted, is also asking the court to award compensatory and punitive damages as well as attorneys’ fees and other costs.

In a written announcement on its website, Proximity characterized itself as a small “start up” business being sued by a massive industry leader, and emphatically denied all charges.

“Proximity Malt denies all claims made by Malteurop North America Inc. and will vigorously defend itself, including filing counterclaims against Malteurop North America Inc. where appropriate,” the statement said.

When reached for comment, Bugajski, criticized the accusations as being based on “circumstantial evidence” — but also said he believes that Malteurop no longer plans to “pursue injunctive relief.”

“Following discussions with the parties, counsel for Malteurop has indicated to counsel for defendants that it no longer intends to pursue injunctive relief and will be filing an amended complaint,” read Proximity Malt’s official response.

“We deny all the allegations against us, and we will defend ourselves through counter-suits where appropriate,” he added.

On its website, Proximity describes itself as a malt supply venture that was “created and designed to serve the unique needs of craft brewers.” Proximity says it plans to focus specifically on serving craft breweries in the U.S., and is currently building its first two malting facilities in Delaware and Colorado. Both are expected to be complete by 2017 and, when finished, will be able to produce about 50,000 metric tons of malted barley annually.

Malteurop is a leading supplier of malts for brewers across the world. Headquartered in Reims, France, the company has more than 25 facilities and currently operates in 14 countries. According to a report from international beer industry consulting firm First Key, Malteurop was the world’s second largest supplier of malting barley as of June 2014 — producing some 2,138 metric tons annually or 9.7 percent of the entire industry supply.

A representative from Malteurop could not be reached for comment at press time.

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