The U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial win for Crabar Industries in a high-stakes commercial dispute involving breach of contract, trade secret misappropriation, and tortious interference with business relationships.
The litigation stemmed from WPCO’s 2013 sale of its folder division to Crabar under an Asset Purchase and Sale Agreement (APA), which included strict non-disclosure provisions. In 2016, WPCO re-entered the market, allegedly using Crabar’s confidential information, including customer lists, pricing data, and design files, which had been retained by former employees and insiders.
Following a jury verdict in Crabar’s favor, the district court entered judgment on all claims. The Eighth Circuit affirmed, rejecting defendants’ challenges to the admissibility of expert testimony, jury instructions, sufficiency of the evidence, and procedural arguments.
Key takeaways:
- Waiver of Contract Defenses: The court enforced Federal Rule of Civil Procedure 16, holding that WPCO waived a key contractual defense by failing to include it in the final pretrial order.
- Enforceable Confidentiality Agreements: The confidentiality agreements signed by former employees were found valid under Nebraska law, supporting Crabar’s breach of contract claims.
- Trade Secrets Protection: The court upheld the jury’s finding that Crabar’s customer lists and proprietary folder specifications qualified as trade secrets under the Defend Trade Secrets Act.
- Tortious Interference Proven: Evidence that WPCO directly targeted Crabar’s long-standing customers supported claims of unlawful interference with business expectancies.
- Proper Damages Award: The jury was properly instructed to avoid double recovery, and the damages award was upheld based on distinct harms from different causes of action.
This case reinforces the importance of proactive litigation strategy, the enforceability of confidentiality provisions in commercial agreements, and the strength of trade secret protections under federal and state law.
For businesses engaged in asset sales, competitive markets, or employee transitions, this decision is a powerful reminder of the legal remedies available when confidential information is misused or business relationships are unlawfully disrupted.
This post is for informational purposes only and does not constitute legal advice. If you have questions about your specific situation, you should contact a lawyer for assistance. Nothing herein is intended to create any attorney-client relationship between you and DLM LAW.
