Trade Secrets

Caudill Seed v. Jarrow Formulas: When a Researcher Carries the Library Out the Door

The Sixth Circuit affirmed a multimillion-dollar trade-secret verdict against a competitor that hired away a director of research and acquired, with him, a decade of curated broccoli-extract know-how.

February 13, 2026
A researcher carrying a box of files out of an office
The case turned on the difference between the skill an employee may carry to a new job and the compiled research he may not. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., No. 21-5345 (6th Cir. Nov. 10, 2022), is the rare departing-employee trade-secret case that reached a federal jury, survived every post-trial motion, and produced an appellate opinion that practitioners now reach for whenever an employer asks the unavoidable question: what, exactly, did our former star take with him? The Sixth Circuit — in an opinion by Judge Suhrheinrich, with Judge Moore concurring in part and dissenting in part on damages, and Judge Clay joining — affirmed a verdict for Caudill Seed under the Kentucky Uniform Trade Secrets Act (KUTSA), KRS 365.880 et seq., entered after a roughly three-and-a-half-week trial in the U.S. District Court for the Western District of Kentucky, No. 3:13-cv-00082 (Louisville). The reported decision appears at 53 F.4th 368.

The facts are an almost archetypal fact pattern of employee mobility gone wrong. Caudill Seed, an agricultural supplier, spent years developing the process and research behind a broccoli-seed extract used in nutritional supplements. Jarrow Formulas, a customer that wanted to make the ingredient itself rather than buy it, recruited Caudill’s director of research, Kean Ashurst. Within four months of hiring him, Jarrow brought a competing activated-broccoli product to market — and later obtained a patent on the process. The legal interest of the case lies in how the Sixth Circuit drew the boundary between the general skill an employee is free to carry between jobs and the compiled, proprietary research he is not.

At a glance

  • Case: Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., No. 21-5345 (6th Cir.); reported at 53 F.4th 368
  • Decision: Affirmed in full, November 10, 2022 (Suhrheinrich, J.; Moore, J., concurring in part and dissenting in part; Clay, J.)
  • Court below: W.D. Ky., No. 3:13-cv-00082 (Louisville); jury verdict for Caudill Seed
  • Claim: Misappropriation under the Kentucky Uniform Trade Secrets Act, KRS 365.880 et seq.
  • Award affirmed: $2,427,605 compensatory ($2,023,000 in avoided development costs plus $404,605 in unjust enrichment), $1,000,000 exemplary damages, $3,254,303.50 in attorney fees, and $69,871.82 in costs
  • Core holdings: A unique combination of otherwise public elements can be a protectable trade secret; a departing employee who hands over compiled research crosses the line from general knowledge into misappropriation; and a plaintiff may recover the defendant’s avoided development costs even when the secret is not destroyed

The departing employee: skill, or the company’s research?

Ashurst was not a junior hire. He was Caudill’s director of research, with roughly nine years inside the company’s broccoli program, during which he assembled a library of more than two thousand articles and a body of testing data, processing parameters, and analysis that no individual scientist could have reconstructed casually. That tenure is what made the case hard. The longer and more senior an employee’s service, the more genuinely difficult it becomes to separate what the person learned — which the law lets them take — from what the employer compiled — which it does not.

Kentucky law, like trade-secret law generally, protects an employee’s right to use the general skill, training, and experience acquired on the job at the next employer. An expert in broccoli chemistry does not become useless to the labor market because one company once employed him. The Sixth Circuit did not quarrel with that principle; it held that this case sat on the other side of the line. In the panel’s compact phrasing, “Ashurst did more than simply move companies.” He did not arrive at Jarrow with a head full of expertise and start fresh. He delivered Caudill’s actual research product — the curated articles, the data, the process knowledge — to a competitor that had performed no comparable work of its own.

That distinction is the doctrinal heart of the opinion, and it is where employee-mobility disputes usually live or die. General knowledge is portable; a portable copy of the employer’s research file is not. The evidence that Jarrow went from customer to competitor in four months, without an independent research program, was powerful circumstantial confirmation that what changed hands was the compilation, not merely Ashurst’s mind.

The trail of the files

What distinguishes Caudill Seed from cases that founder on proof problems is how concrete the transfer was. This was not a dispute about suspicious overlap inferred long after the fact; the record contained a documentary chain of the materials leaving Caudill. On April 10, 2011, while still employed by Caudill, Ashurst emailed confidential company documents to Jarrow’s chief executive. About ten days later, Jarrow asked him for “a zip of the pertinent data,” and the following week Ashurst delivered it on a physical disc. He began consulting for Jarrow on May 1, 2011, and submitted his resignation to Caudill the next day. Jarrow, for its part, admitted that Ashurst had provided numerous confidential and proprietary Caudill documents at the company’s request.

For litigators, the lesson is about what kind of evidence carries a misappropriation verdict through trial and appeal. The most persuasive record is rarely a single dramatic moment; it is a sequence — files moving to an outside email account or to portable media in the weeks before departure, requests from the new employer for specific data, and a timeline in which the recipient’s product appears too quickly to have been independently developed. Here the sequence was tight and the dates were on the calendar: transfer while still employed, a request for a packaged “zip,” delivery on disc, consulting work begun, resignation the next day. That timeline did more to defeat any innocent-explanation defense than any expert reconstruction could have.

It also illustrates why courts and counsel treat the period bracketing a resignation as the critical forensic window. The misappropriation in Caudill Seed predated the federal Defend Trade Secrets Act, so the case proceeded entirely under state law — but the evidentiary playbook is identical under the DTSA. Preserve the departing employee’s accounts and devices, reconstruct what was accessed, copied, emailed, or written to external media in the final weeks, and line that activity up against the competitor’s product launch.

A combination of public pieces can still be secret

Jarrow’s central defense was a familiar one: most of what Caudill called a trade secret was, element by element, available in the public domain — published articles, known chemistry, ordinary processing steps. The Sixth Circuit rejected the argument by applying the combination-trade-secret doctrine. As the court put it, “a new combination of known steps or processes can be entitled to trade-secret protection.” The protectable thing was not any single public fact but Caudill’s particular assemblage of its entire research-and-development process — the selection, arrangement, and integration of those pieces into a working whole.

This is the doctrine that most often rescues research-and-development secrets from the “it’s all public” attack, and Caudill Seed is now a leading articulation of it. The value of a sophisticated R&D effort frequently lies precisely in knowing which public pieces matter, how they fit, and which dead ends to avoid — knowledge that a competitor would otherwise have to buy with its own years of investment. The court credited testimony that only someone who had spent years immersed in broccoli research could have assembled so useful a compilation, which neatly tied the combination theory back to the misappropriation: Jarrow did not independently arrive at the combination, it received it.

Damages: paying for the head start

The damages holding is the opinion’s most contested contribution and the subject of Judge Moore’s partial dissent. The jury’s compensatory award rested largely on Caudill’s avoided-development-cost theory — roughly $2,023,000 reflecting what Jarrow saved by acquiring Caudill’s research rather than performing its own, plus $404,605 in unjust enrichment tied to profits from products built on the misappropriated information. Jarrow argued that this kind of recovery requires the trade secret to have been destroyed; here Caudill still had and used its secret. The majority disagreed, holding that trade-secret damages are flexible and that a defendant’s avoided costs are a permissible measure of unjust enrichment even when the owner retains the secret.

Judge Moore would have limited Caudill to Jarrow’s actual profits, reasoning that an undestroyed secret does not support recovery of the owner’s full development costs. The split matters well beyond this case: avoided-cost or “head-start” damages can dwarf a defendant’s early profits, and Caudill Seed gives plaintiffs appellate support for that larger number in the common scenario where the secret keeps working for its owner.

Open questions

The opinion leaves real edges unsettled. How far does the combination doctrine reach before it swallows the public domain — when does a compilation of known elements become so thin that protecting it improperly fences off general knowledge? The court credited a unique, decade-long assemblage, but did not draw the lower boundary. The damages split is also unresolved as a matter of broader law: courts outside the Sixth Circuit continue to divide on whether avoided development costs are available when the secret survives intact, and the majority and dissent here frame that debate without ending it. Finally, the opinion does not map how much of a senior researcher’s accumulated expertise must be deemed unprotectable general skill before a compilation claim becomes an impermissible restraint on the person’s ability to work at all.

Implications

  • Seniority cuts both ways. A long-tenured researcher carries more genuine general skill, but also more access to compiled, protectable research; employers should document which is which before, not after, departure.
  • Build the timeline. Verdicts survive appeal on a concrete sequence — files moved to outside accounts or media in the final weeks, the new employer’s requests for specific data, and an implausibly fast launch.
  • The combination doctrine answers the “it’s all public” defense. Identify the secret as the specific selection and arrangement of elements, supported by testimony on the effort required to assemble it.
  • Avoided-cost damages are live in the Sixth Circuit. Plaintiffs can pursue the defendant’s saved development costs even when the secret is not destroyed, though the theory remains contested elsewhere.
  • Exemplary damages and fees follow willfulness. A finding of willful and malicious misappropriation under KUTSA supported $1,000,000 in exemplary damages and more than $3.2 million in fees on top of compensatory relief.

Frequently asked questions

Did Jarrow do anything beyond hiring a competitor’s employee? Yes. The case did not punish ordinary hiring. The record showed Ashurst transferred confidential Caudill documents — by email while still employed and then on a disc at Jarrow’s request — and that Jarrow used that compiled research to launch a competing product in four months. Hiring talent is lawful; acquiring the former employer’s research files with the hire is not.

Why did a compilation of public information qualify as a trade secret? Under the combination-trade-secret doctrine the Sixth Circuit applied, a new combination of otherwise known steps or processes can be protectable. Caudill’s secret was the unique assemblage and integration of its research and development, not any single public fact within it.

Was this a federal Defend Trade Secrets Act case? No. The misappropriation occurred in 2011, before the DTSA, so the claim arose under the Kentucky Uniform Trade Secrets Act. The evidentiary and strategic lessons, however, apply directly to DTSA litigation today.

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