Battle over brews: Rocklin, Lincoln breweries go head to head in court

Two breweries in Rocklin and Lincoln are dueling in court over debates of intellectual property and sabotage. In May, Lincoln's Slice Beer Company filed a civil action in United States District Court in the Eastern District of California to protect trade secrets against Rocklin's Shred Beer Company, which was recently started by Slice's former head brewmaster. That suit alleges trade secret misappropriation, unfair competition, breach of fiduciary duty, computer crimes and more. Zach Frasher, who now owns and operates his own beer company at Shred, was hired as head brewmaster at Slice Beer Company in 2019. At that time, he was also named to Slice's board of directors and offered a six-figure salary, according to the lawsuit. Slice alleges Frasher "breached his fiduciary duty as director of Slice pursuing his own business interests" in 2022. The suit also claims Frasher misappropriated trade secrets, which include the processes used to make beers at Slice. When Frasher left Slice in April, "private recipes, processes and procedures maintained by him on behalf of Slice as the Head Brewmaster disappeared from the offices," in some cases deleted from the computer system maintained by Frasher for Slice. The suit alleges 150 beer recipes have been deleted. According to the suit, when Frasher was asked what happened to the missing data, he stated "he did not know." In a counterclaim filed in mid-June, Shred alleges Slice did not pay him (Frasher) for his shares in Slice and defamed the new business just as it was preparing to open its doors. Slice alleges "taking secrets with him (Frasher) to start Shred" violated his fiduciary duties. "The name Shred Beer Company is sufficiently similar in name to Slice Beer Company that defendants are attempting to confuse the public by said similar names so as to diminish the value of Slice," Slice's suit also states. Leaving Slice According to Shred's counterclaim, Frasher gave Slice six weeks notice to help the business transition toward a new brewmaster. The counterclaim cites texts and social media posts which show Slice leadership "lauded" Frasher for his contributions to Slice and wished him well. "The Slice team all wishes him the best in his future endeavors and are grateful for the time we shared," an April 2 Slice social media post stated about Frasher's departure. According to Shred's counterclaim, "As Slice began to confront a future without Frasher at the helm, it panicked." Frasher spent weeks working with Slice to ensure a smooth transition, the counterclaim states. The counterclaim said Frasher gave six weeks notice because "he wanted (and still hopes) to see Slice flourish." After attempting to sell back his 2,000 shares of stock, totaling $180,000, Slice did not follow through with the transaction, the counterclaim states. Instead, Frasher was introduced to a "separation agreement which Slice tried to materially renegotiate the buyout terms and unlawfully limit Frasher's ability to operate his new brewery." Issues around separation Shred's counterclaim alleges Slice tried to classify contact information for venders and suppliers as Slice's intellectual property and demanded Frasher refrain from using such "Slice owned assets." The counterclaim called that request "ridiculous" since Frasher came to Slice with years of experience in homebrewing and commercial brewing, including his "vast network of vendors and suppliers." The counterclaim states Slice demanded Frasher not use any beer recipes produced under the Slice brand – "ignoring the fact that Frasher came to Slice with his own recipes and extensive knowledge … and Frasher never agreed to assign any of his work to Slice." Shred, on the other hand, claims that as headbrewmaster, Frasher did not properly protect the documentation around beer brewing processes. "Defendants' misappropriation of Slice's confidential, proprietary and trade secret information was intentional, knowing, willful, malicious, fraudulent, and oppressive," the Slice lawsuit states. During his final month at Slice, Frasher worked with the CEO and next head brewer and even wrote several new recipes, according to the counterclaim. The counterclaim says Frasher went "above and beyond" to prepare Slice for his departure. "Slice has continued to play the hits, churning out can release after can release of beers Frasher developed," the counterclaim states. "At least from a brewing perspective, Slice was left in and remains in good condition and capable hands." Slice's suit paints the picture that Frasher's actions before leaving damages its business. Slice has "suffered" severe competitive harm, irreparable injury and significant damages in an amount to be proven at trial, the lawsuit states. The counterclaim alleges that once Frasher rejected the "unreasonable attempts to renegotiate the buyout terms," he was told not to come back. This was two weeks ahead of his six weeks notice. Competitions One allegation in Slice's lawsuit centers around entering beer competitions, specifically around the time of Frasher's departure. Slice alleges Frasher pulled Slice beers from two competitions in an "act of sabotage" against Slice. Slice has regularly attended similar award competitions, with its suit citing 15 awards its beers have received since 2020. Slice's suit also alleges Frasher said he sent 40 beers to a competition, but the competition never received the beer and Slice couldn't find documentation of the shipping. Slice's suit claims these "acts of sabotage" and "intent to deceive and defraud" caused damage to the social presence of Slice at beer competitions. Frasher enjoyed the friendly competition in beer competitions, the counterclaim states. "No one asked him to, no one required him to do it, and Slice never established a policy for entering beer competitions," the counterclaim states. Opening Shred Shred Beer Company did not have a grand opening as big as Slice's, the counterclaim alleges. Shred had a "more muted" grand opening in June 2023 and the counterclaim alleges the turnout "was artificially diminished as a result of … Slice's targeted efforts to defame Shred." Shred alleges Slice CEO Russell Yeager made "false and defamatory statements to other in the craft brewing industry as well as regular customers, falsely claiming that Frasher … stole from Slice and sabotaged Slice's business." The counterclaim alleges those statements were made with the "deliberate purpose of harming" Shred's reputation and business. Slice's suit alleges if Shred is allowed to continue, they "can and will create derivative work created from stole trade secrets." Shred's counterclaim does not mince words in regard to Slice's lawsuit. "Reminiscent of a jilted lover, after Slice lured Frasher away from local stalwart Moonraker Brewing Company in 2019, Slice appears to have decided that if it can't have Frasher, no one can," the counterclaim states.