Ex AB InBev bigwig blew whistle claiming firm watered-down Budweiser

AB sued James Clark on March 1 for misappropriating trade secrets, but Clark’s attorney Robert Carichoff claims, in a March 29 counter-motion seeking to strike out the brewer’s claim, that AB wants to ‘punish’ Clark for his role in prosecuting a widely reported Californian class action alleging the firm waters-down its beers.

(In a further twist to the saga, Clark earned a law degree in 2011, and in his capacity as an attorney worked with law firms now representing consumers in the Californian class action.)

Filed on February 22, the class action​ alleges that AB possesses process control technology allowing it to control alcohol levels to within .01%, but added extra water to intentionally cut costs and brew drinks such as Budweiser with a “significantly lower alcohol content”​ than that displayed on labels.

Clark worked at AB from 1998 to June 2012 across five US breweries, and in its suit filed in the US District Court, Eastern District of California, the brewer says he had access to “confidential, proprietary, and/or trade secret information and documents”.​

Signed confidentiality agreements​

Clark had signed two separate agreements relating to intellectual property and confidentiality, AB claims, which prohibited him from using such information for his own benefit, or from disclosing it to third parties.

As he prepared to leave AB in June 2012, the company claims that Clark “engaged in a series of acts designed to misappropriate Anheuser-Busch’s confidential, proprietary and/or trade secret information” ​and did so, the suit alleges, “surreptitiously and without…knowledge or consent”.​

Clark, “improperly obtained, used, transferred and/or otherwise disseminated confidential, proprietary, and/or trade secret information owned by Anheuser-Busch in violation of his obligations and without Anheuser-Busch’s consent,” ​the filing adds.

“Clark did not return any such information to Anheuser-Busch upon his termination, as he was required to do under the terms of his confidentiality agreement,” ​it says.

Under Clause No.7 of the agreements, AB InBev said such data could include biological materials, models, writings, records, drawings, blueprints, notebooks or documents containing “any confidential information, invention or which embodies a copyright work”.​

AB seeks injunctive relief against Clark to (1) Prevent further disclosures (2) Ensure he name persons/entities to whom he made disclosures (3) Ensure return of documents (4) Win compensatory and punitive damages.

Complaints to senior managers…​

But in a March 29 counter-motion seeking to strike out AB’s action – Clark’s attorney claims his client issued “complaints over several years to approximately twenty senior managers about how the alcohol content of its beverages differed from what was being advertised”.​

Clark’s attorney claims that “this vague and unwinnable SLAPP [Strategic Lawsuit Against Public Participation] is an attempt to punish Mr Clark for exercising his constitutional rights of petition and free speech in connection with class action filed against AB exactly one week prior to this action”.​

Clark did not misappropriate trade secrets, his camp contends, while the agreements he signed with AB are unlawful and are thus unenforceable. Moreover, he also played an instrumental role in “exposing AB’s behavior” ​as an attorney involved in the Californian class action.

“To allow AB to proceed with this vindictive litigation would empower all employers to punish former employees like Mr Clark for reporting misconduct and speaking out on behalf of consumers,” ​Clark’s attorney said.