Thursday, March 08, 2007, 3/08/2007 09:42:00 AM

Ethanol and Trade Secrets - Part Deux

By Todd
As discussed in an earlier post today, Iowa-based Horizon Ethanol LLC has accused two former employees of spilling trade secrets and breaching their confidentiality agreements by joining a competing ethanol producer in Colorado. Horizon, Broin and Associates and Broin Management LLC filed a federal lawsuit on March 1, accusing former operations manager Gary T. Hanson and former maintenance technician Robert A. Akers of violating their non-compete and non-disclosure agreements. The agreements stated that the employees could not work for a competing business for two years after terminating their Horizon employment and could not disclose confidential information.

Portfolio Media is reporting Hanson worked at Horizon from Jan. 10, 2006 until Dec. 18, 2006, when he voluntarily resigned. Akers resigned on Jan. 22, 2007 after working for the energy company since Feb. 17, 2006. Horizon said they are now working at Sterling Ethanol. Summonses were served to the two employees at Sterling Ethanol’s plant on March 3. Horizon is seeking an injunction enjoining Hanson and Akers from working at Sterling Ethanol and disclosing trade secrets. Horizon is also seeking damages, including punitive damages, and disgorgement of the defendants’ income.

Horizon said that Hanson and Akers had intimate and extensive knowledge of Broin and Associates’ confidential ethanol-production technology and management techniques. Broin, which has built more than 25 ethanol plants, contracted with Horizon to build and manage the plant in January 2005. Broin licensed technology as well as design and operational information on the ethanol facility to Horizon, which signed a confidentiality and non-disclosure agreement prohibiting Horizon from disclosing the information. Horizon required its employees to sign binding non-compete agreements and non-disclosure agreements. Broin said it has developed technologies that produce ethanol in a more efficient and economic manner than others in the industry. Broin also said it has implemented management and operational techniques which constitute trade secrets since they have helped its ethanol plants become some of the most profitable plants in the ethanol industry.

The Horizon Ethanol plant near Jewell, Iowa was completed in March 2006. The plant has a production capacity of 60 million gallons of ethanol per year. Broin Management LLC operates and manages about 20 ethanol plants. Ethanol is a clean-burning fuel that is produced by crops such as corn and blended with gasoline to decrease fuel costs and harmful emissions.Horizon Ethanol LLC, Broin Management LLC, and Broin and Associates Inc. are represented by Nyemaster Goode West Hansell & O’Brien PC.Representation for Hanson and Akers was not immediately available. The case is Horizon Ethanol LLC et al v. Gary T. Hanson and Robert A. Akers, case number 3:07-cv-03017-MWB in the U.S. District Court for the Northern District of Iowa.

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