Wednesday, October 20, 2010, 10/20/2010 10:21:00 AM

The Trade Secrets of Corn Prices in Ethanol Production

By Todd



Interesting reporting from The Sioux Falls Argus Leader regarding a new employee defection matter. Seems a Sioux Falls based ethanol producer has sued a former employee named Jodi Heath alleging misappropriation of trade secrets regarding corn purchase pricing strategies for Poet.




Heath was commodities manager for Poet's plant in North Manchester, Ind., from 2008 through August, when she allegedly took knowledge of the company's customers and pricing strategies to work for Interstate Commodities, Inc.


Poet's lawsuit says Heath e-mailed herself information about production costs at the plant and used it to calculate the maximum amount the plant would pay for corn at any given time.
Within days of her resignation, the lawsuit says, she was buying from the same farmers she did during her tenure at Poet.


"Shortly after Heath went to work for Interstate, Poet Risk Management was forced to instruct all Poet plants, including Poet North Manchester, to refrain from entering any forward contracts with Interstate because it was taking contract positions around the Poet plants and driving up the corn price," the lawsuit says.


Poet wants an injunction issued against Heath that would force her out of her job at Interstate. The lawsuit also seeks $25,000 for each breach of contract.




We've always said that the story regarding how trade secrets were allegedly misappropriated plays a major role in deciding these cases. If the evidence supports Poet's allegation regarding the surreptitious e-mailing of data to Ms. Heath's personal e-mail account, this may be a tough case in which she defends her pre-departure and post-departure activities.




We'll keep an eye on this one for you.




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