Court grants injunction, restraining order against NEW Co-op
A federal District Court judge has granted a temporary restraining order and preliminary injunction requested by Landus Cooperative in its lawsuit against NEW Cooperative of Fort Dodge.
The lawsuit, filed two weeks ago by the Ames-based co-op, accuses disgruntled former Landus employees Jeff Headley and Brian Berns of conspiring and stealing protected information about customers and the company before joining NEW Co-op.
Landus said it has lost over $250,000 in payments refunded to former customers after the pair started working at NEW. At least 18 farmers have asked to have their soil samples sent to NEW.
The order prohibits the defendants from using or disclosing any of Landus’ confidential information, orders them to return all confidential information such as notebooks with customer details and prohibits them from soliciting or selling to customers they were assigned to at Landus, until further hearings. It also expressly forbids them from tampering with evidence.
“The Court will not, at this time, rule on the adverse inferences requested by the plaintiff,” said U.S. District Judge C.J. Williams for the Northern District for Iowa.
“It’s what we consider to be a status quo order,” said Stu Cochrane, attorney for NEW Co-op and the two employees, saying the order was typical for this type of lawsuit at this stage. “It’s typical because it places parties in the same position and directs parties to not do anything to change their position.”
But Cochrane reiterated statements made in the response to Landus’ application for the restraining order, saying that nothing improper had occurred, as Landus’ attorneys asserted.
Myriad other allegations named in the lawsuit moving toward trial have not been answered yet, as the defendants have not yet filed an itemized response. Cochrane said their response would deny any allegations of misappropriations or exposing confidential information.
Citing text messages on company-owned phones and digital forensics analysis, Landus said Headley disclosed customer and pricing information to Berns and destroyed evidence, making the extent of damages from stolen information impossible to determine.
After Landus discovered Headley had forwarded emails with Landus information to a personal account, “counsel for Landus worked with counsel for defendants to quarantine the information stolen and was repeatedly assured by defendants that the stolen information had not been used or even opened,” said Angela Gray, attorney for the plaintiff, in court documents. “Defendants have been destroying evidence since the inception of their wrongdoing and continuing through as late as December 30, 2020, six days after Landus provided notification to defendants of the imminent lawsuit and their duty to preserve evidence.”
Gray subsequently filed a motion to expedite a hearing on the restraining order and injunction.
“We didn’t like that they thought this was part of some master scheme,” Cochrane said. “Farmers work closely with agronomists. It’s expected that when an agronomist moves, their customers follow. They’re partners — it would be naive to (think) farmers wouldn’t follow their agronomist.”
Relevant parts of the lawsuit, such as Landus’ claims that Headley violated a non-compete agreement, are baseless, according to Cochrane. He said Headley had signed no such agreement with the company.
“It’s unfortunate that (the lawsuit is) pending,” he said. “Some of these member-farmers are members of both organizations. It’s always unfortunate when you see farmers brought into litigations sometimes suing themselves.”
Berns, of Lohrville, was terminated from his position as a field sales agronomist at Landus on Dec. 7 after criticizing the company’s decisions regarding Christmas bonuses and changes to its retirement program, which he said would have cost him about $1 million. The NEW Cooperative employee started as an agronomist in 1994 with Farmers Cooperative, which merged with West Central Cooperative to become Landus in 2016.
Headley, of Paton, resigned on Dec. 21, two weeks later. The field sales agronomist worked for West Central Cooperative starting in 2008 before the merger.