Dairy Farmers of America Files Trade Secrets Lawsuit Against Westrock Coffee

Westrock Coffee's new facility in Conway (Emma Mayes)

The largest dairy farmer-owned cooperative in the country has sued seven of its former employees and Westrock Coffee Co. of Little Rock, alleging theft of trade secrets.

Dairy Farmers of America Inc. of Kansas City, Missouri, makes ready-to-drink coffee products and has confidential packing agreements with a joint venture to make, market and sell packaged coffee and energy drinks, according to its lawsuit filed in federal court in Missouri.

In May 2024, a Westrock employee reported to DFA that former DFA employees had “secretly obtained” DFA’s confidential and proprietary information before the employees left and then shared the information with the publicly traded coffee, tea and extracts company, according to DFA’s lawsuit.

The information allegedly shared included DFA’s quality assurance procedures, formulas, pricing information and food plans so that Westrock could use “the trade secrets” at its Conway plant, the lawsuit said. The trade secrets also allegedly included specific recipes for products and pictures of manufacturing lines. The pictures were to help Westrock build and improve its manufacturing equipment, the suit said.

Westrock’s 570,000-SF $315 million plant in Conway is the largest roast-to-ready-to-drink manufacturing plant in North America, the company said in a news release. It opened in June 2024.

DFA said in the lawsuit that Westrock makes or will make at its Conway plant, where the former DFA employees now work, the “exact type of products” that DFA creates.

DFA also accused Westrock of “directly soliciting the joint venture to manufacture the identical products that DFA” is making at its two plants in Missouri.

Westrock denied the allegations in a statement to Arkansas Business. “In reality, we had reached an agreement on the terms under which we would provide RTD products for this customer months in advance of hiring anyone who had worked at DFA,” Bob McKinney, Westrock’s chief legal officer, said in the statement.

He said that Westrock is, and always has been, “committed to conducting our operations with the highest standards of integrity, professionalism, and ethical responsibility. Our company and employees take pride in upholding these values in every aspect of our work, ensuring transparency, honesty, and accountability in all our dealings.”

DFA seeks to stop Westrock from allegedly using its trade secrets, and it wants the information returned. It is also seeking an unspecified amount of damages. DFA is represented by the Springfield, Missouri, office of Husch Blackwell LLP.

To win a trade secrets case, the plaintiff first has to prove that it had trade secrets, which are things that aren’t generally known and already public, said Elizabeth Rowe, who teaches patent law, trademark law and trade secret law at the University of Virginia School of Law. She was unaware of the details of DFA’s case.

The company’s secrets also must have value because of their secrecy, she said. “And also, most importantly, that they took reasonable efforts to protect the information and keep them secret,” she said. “That tends to be the critical factor, often, in a lot of cases,” as to whether the information is actually a trade secret, as opposed to just regular confidential information or just regular proprietary information.

And then the plaintiff has to prove that the trade secrets were misappropriated, “and generally that would mean that the defendant, or defendants, acquired them by what we call improper means,” Rowe said.

A trade secret “could be virtually any kind of business information. … Like anything you can think of could potentially be a trade secret,” she said.

If the trade secret case survives motions to dismiss and makes it to trial, “the plaintiffs overwhelmingly win those cases,” Rowe said.