Toro and Steel Green reach legal settlement

By |  August 12, 2019 0 Comments

The Toro Co. and Steel Green Manufacturing have settled their litigation and agreed to issue the following joint statement.

In March 2018, The Toro Company announced its acquisition of substantially all of the assets of L.T. Rich Products, Inc., a Lebanon, Indiana-based manufacturer of stand-on, zero-turn sprayers and spreaders marketed under the trade name “Z-Spray.” Matt Smith, Mike Floyd, Scot Jones, Brent Mills, Craig Conyer and James Kepner were employees of L.T. Rich who continued to work at the L.T. Rich facility following The Toro Company’s acquisition.

In early July 2018, the employees listed above left their employment at the L.T. Rich facility to form Steel Green Manufacturing LLC, which manufactures stand-on, zero-turn sprayers and spreaders that compete with The Toro Company’s line of Z-Spray products. Prior to quitting, certain of the employees listed above removed a significant volume of information from The Toro Company’s computer systems, much of which Toro considered sensitive, confidential and trade secret.

On October 1, 2018, The Toro Company filed a lawsuit in the United States District Court for the Southern District of Indiana against Steel Green and its employees which alleged, among other things, that they had misappropriated trade secret information that belonged to The Toro Company, giving Steel Green an unfair advantage in bringing its products to market. Steel Green and its employees denied The Toro Company’s allegations, and specifically denied ever using The Toro Company’s information. Steel Green and its employees also assert that, before the lawsuit was filed, they returned to The Toro Company the storage devices that contained the information that the employees removed.

The parties have reached an agreement to settle their differences. The settlement includes the Court’s entry of an agreed injunction, in which Steel Green and its employees will refrain from certain activities, including the use of the information that certain of the employees listed above removed from The Toro Company’s computer systems. The injunction also prohibits the sale of machines and parts by Steel Green during certain months in 2020. The other terms of the settlement are confidential.

“With the lawsuit behind us, we are ramping up production,” said Brent Mills, general manager for Steel Green Manufacturing. “Our focus is on taking care of our customers and providing inventory to our dealers.”The injunction prohibits Steel Green Manufacturing from selling Z-Spray parts during February and March and Steel Green machines during March and April of 2020. During this time, Steel Green Manufacturing will continue to manufacture new machines, provide customer support and sell parts for Steel Green machines to existing customers.

Steel Green dealers and distributors are not affected by the injunction except for Steel Green’s manager for one month in April of 2020. All other dealers will be permitted to sell Steel Green machines during that time.

“We are incredibly grateful for the support and encouragement we have received from the lawn care community,” Mills said. “We are committed to building the best equipment and providing the best customer service in the industry, and we are planning to be around for a long, long time.”

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