Summit Brewing sues two former employees, alleging sharing of trade secrets

When Summit Brewing Company hired Jeffrey Spaeth in the summer of 1986, the fledgling St. Paul business was just getting on its feet as one of fewer than 20 craft brewers in the country.

Spaeth rose up through Summit's ranks to reach vice president of sales, along the way helping the company become one of the largest microbrewers in the United States amid explosive growth in the industry.

But now Summit is suing Spaeth and another longtime employee, Timothy Daly, accusing both of conspiring to sell the company's confidential trade secrets to high-level executives for "a direct competitor."

Neither Spaeth, his attorney, nor Daly, who was hired in 2000 as sales market manager, could be reached for comment. Summit's CEO, Mark Stutrud, declined to comment.

The lawsuit does not name the competitor, but Spaeth's LinkedIn page shows that he joined Minneapolis-based Surly Brewing Co. as a strategy consultant last May — two months after leaving Summit — and worked there until September.

According to an April 2016 report by the Brewers Association, which represents independent craft brewers, Summit was ranked among the top 50 breweries in the country based on sales volume. Their ranking at No. 29 was good for second-highest in the state, trailing New Ulm-based August Schell Brewing, which was ranked No. 27. Wisconsin has three microbrewers that rank higher than either Minnesota company.

In the lawsuit filed Thursday in Hennepin County, Summit alleged that Spaeth and Daly had access to confidential information about the company, including plans for sales, marketing, pricing and distribution.

When Spaeth left the company in March 2016, he owned 2.5 percent of the company's stock and was given a "generous severance," according to the lawsuit.

But in mid-May 2016, the lawsuit claims that Stutrud, became aware that Spaeth had "entered into an independent consulting agreement with Summit's direct competitor."

According to the lawsuit, in August 2016, Daly e-mailed Summit's confidential and trade secret information to Spaeth, which the lawsuit says he then sent on to the company's competitor. Daly was responsible for sales in territory encompassing northern Minnesota, northwestern Wisconsin and parts of the Twin Cities.

A Surly spokeswoman declined to comment.

Summit seeks at minimum $50,000 from Spaeth and Daly.

Brandon Stahl • 612-673-4626