Beyond Meat v. Don Lee: All Claims Dismissed As Settlement Reached

Five years since Don Lee Farms first sued Beyond Meat for breach of contract, four months since it alleged “something is really wrong” at the alt-meat brand through numerous federal false advertising claims, and three days into the trial proceedings in Los Angeles Superior Court, the plant-based meat brand and its former co-manufacturer have reached a settlement agreement.

The parties released a joint statement on Tuesday afternoon stating neither admit liability or wrongdoing and both are satisfied with the outcome. The agreement will dismiss all claims and cross-claims filed in both California state and federal court between the two companies.

According to an SEC filing by Beyond Meat regarding the breach of contract settlement, the terms “did not have a material impact on Beyond Meat’s financial position or results of operations.” The companies reached a separate “confidential written settlement agreement” to dismiss the federal false advertising claims.

The original dispute dates back to 2017 with claims that Beyond had wrongfully terminated its five-year exclusive manufacturing contract with Don Lee, misappropriated trade secrets by sharing proprietary processes developed by Don Lee for Beyond products with new co-manufacturers, and thus, created unfair marketplace competition. A judge later dismissed the misappropriation of trade secrets and unfair competition accusations; however, the contract dispute was allowed to proceed.

Since the initial filing, the two companies have slotted upwards of four derivative actions against one another, including a counter-suit from Beyond claiming it voided the contract due to unsafe conditions and subpar health and safety practices in Don Lee’s production facilities.

In 2020, Beyond Meat stockholders sued its senior management team, including co-founder and CEO Ethan Brown, former executive chairman Seth Goldman and former CFO Mark Nelson, stating the team “breached their fiduciary duties” by not properly disclosing the state of the lawsuit. Beyond Meat settled that case earlier this year.

In June, Don Lee took aim at Beyond again, making a series of accusations in a countersuit that ranged from questioning capabilities of its co-founder and CEO Ethan Brown, to alleging the company had been misleading consumers with its nutrition and ingredient labels. The latter accusation opened the floodgates for multiple consumer-led class action lawsuits that see Beyond Meat challenged for fraudulent nutritional claims.

The subsequent class actions focus primarily on Don Lee’s accusation that Beyond Meat does not contain “equal or superior protein” to real meat or that the products are free from “synthetic” ingredients, despite assertions within Beyond’s labels and marketing materials. Consumers from California, New York, Illinois and Iowa have signed onto complaints which will likely still stand up despite the two parties settling the motivative dispute.

Beyond filed a motion to dismiss Don Lee’s false advertising derivative ahead of the trial, claiming the co-manufacturer had been aware of Beyond’s recipes for nearly six years and voided the statute of limitations by the time it took aim on the products in court. Additionally, Beyond said Don Lee could not make accusations of false advertising when it participated in the production of the alleged, falsely advertised products. That motion had not been heard ahead of trial.

The news comes on the heels of Beyond’s Q3 earnings report in which Brown announced quarterly and full-year sales were lower than expected and that the company would cut 200 jobs in order to continue pursuing profitability.