Illinois cannabis companies in legal battle over chemist, non-compete agreements

Cresco Labs and Green Thumb Industries have been fierce rivals since Illinois issued its first licenses to grow and sell medical marijuana in 2014.

Now, as the two River North-based firms battle for market share in states across the country, Cresco has filed a lawsuit accusing GTI of poaching a high-level employee who allegedly violated a non-compete clause in his contract when he switched sides this year.

...The lawsuit states that Christopher Tonge, a chemist who served as Cresco’s director of technical services, notified the company in May that he was resigning. He then took what’s believed to be a similar job at GTI. Tonge had signed an employee agreement with Cresco that “barred him from working for a substantially similar company” for a year.

Tonge was integral to developing “a unique process” to extract cannabis oil from pot plants that “helps drive revenue while enabling significant cost savings,” according to the suit. “The process provides such value to Cresco that it has applied for two patents on it, on which Mr. Tonge is a co-inventor,” the suit notes.

Tonge was allegedly recruited to GTI by Matt Ingram, its senior vice president of operations. Ingram previously worked at Cresco and has knowledge of the firm’s manufacturing operations and its contractual non-compete provisions, the suit states. 

Meanwhile, Ingram has been reaching out to other Cresco workers “and urging them to resign to work for GTI, despite knowing that these employees are subject to covenants not to compete,” the suit holds. Cresco CEO Charlie Bachtell even confronted his GTI counterpart, Ben Kovler, in April and warned him that Ingram was attempting to hire “multiple senior-level employees” from Cresco.

It'll be interesting to see how this lawsuit plays out - I imagine that someone thinks they've got a pretty solid case here. 

(I'm broadly against non-compete agreements in that it seems like they're good for the employer, bad for the employee (and I think) the economic understanding is that it's bad for sectors for there to be lack of labor mobility. In this case, it seems like it's reasonable for an employer to attempt to lock an employee in - I guess doing with incentives ('we'll pay you more') is better than 'we're chaining you to us.')