Foster Farms Sues Tyson Over Non-Compete

On June 17, 2022, Foster Poultry Farms, LLC and Brian Baker (Plaintiffs) filed an action in the Superior Court of California, Merced County against Tyson Foods, Inc. (Defendant).  On July 25, 2022, Tyson Foods removed the case to the Eastern District of California. Plaintiffs allege that Baker, the individual plaintiff, is a former employee of Tyson and they seek to invalidate a “non-competition and non-solicitation agreement” (Agreement) that Baker entered into during his tenure with Defendant.

Plaintiffs allege that poultry producer Foster Poultry Farms, LLC is a California limited liability company with “offices and assets located primarily in California.” They claim it provides, ‘among other things, the sales, marketing, financial and legal functions of Foster Farms’ entities…”

Foster Farms allege that Baker began working for Tyson Fodos in March 2004 in Arkansas and that his most recent position was Vice President of Poultry Operations.

The Agreement, attached to the complaint, generally purports to restrict Mr. Baker’s activity in support of Defendant’s competitors for twelve months following his termination from Defendant. It applies anywhere in the United States and concerns “any responsibilities similar to any position you [Mr. Baker] held with Tyson during the twenty-four (24) months preceding the date upon which your employment … terminates or in which you would utilize or disclose confidential methodologies, techniques, customer lists or information of [Defendant].”

Plaintiffs allege that on June 6, 2022, Bakeraccepted a position as Treasurer of Foster Poultry Farms LLC and “will be a California Employee for a California Company.”[3] Plaintiffs allege that Mr Baker’s role will entail responsibilities different from those he had with Defendant, so that his taking the new position “would not violate the Non-Compete Agreement even if it were enforceable, which it is not.”

Plaintiffs further allege on June 8, 2022, presumably almost immediately after Mr. Baker advised Defendant of his new job, Defendant filed suit in state court in Arkansas against Mr. Baker and Foster Farms, LLC. In addition to filing the lawsuit, Plaintiffs allege Defendant also obtained an ex parte TRO purportedly restraining Mr. Baker from taking his new position. The California action presumably can be viewed as a strategic response to the Arkansas action filed only nine days before.

Plaintiffs assert three causes of action: Declaratory Relief Regarding Choice of Law (i.e., California law applies notwithstanding the Arkansas choice of law provision in the Agreement); Declaratory Relief under California Business & Professional Code 16600 & 17200; and Declaratory Relief under Code Section 17200 alone. Plaintiffs seek not only declaratory and injunctive relief against enforcement of the Agreement, but restitution and disgorgement.

Plaintiff’s counsel is Wanger Jones Helsley PC.