Lubow v. Sioux Honey Association

Background

Sioux Honey Association, Cooperative produces and sells branded and private-label honey. Scott Lubow worked there as Vice President of Retail Sales from March 2021 until his termination in March 2024. He reported directly to CEO and President Kevin Hueser.

Lubow sued under the Minnesota Whistleblower Act, which prohibits an employer from retaliating against an employee who, in good faith, reports an actual, suspected, or planned violation of law. He identified three reports that he said led to his termination:

Lubow said he reported the Costco concern to Hueser and raised the Walmart concerns at a March 19, 2024 meeting. Hueser disputed those accounts, including whether the meeting occurred.

Sioux Honey said it terminated Lubow for dishonesty concerning an agreement with Eurpac, a sales, marketing, and distribution group. Lubow had signed a letter beginning the process of outsourcing certain orders but did not tell Hueser about the signed letter earlier. Hueser learned about it on March 14, confirmed the letter was signed, and decided to terminate Lubow.

Legal standard

The court applied the summary-judgment standard. Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to win under the law.

Because Lubow presented no direct evidence of retaliation, the court applied the burden-shifting framework commonly used in employment-retaliation cases. Lubow first had to show that he engaged in protected conduct, suffered an adverse employment action, and had a causal connection between the protected conduct and the termination. If he made that initial showing, Sioux Honey would need to provide a legitimate, non-retaliatory reason, after which Lubow would need to show that reason was a pretext—that is, a cover for retaliation.

The court emphasized that a report is protected only if the reported facts, accepted as true for purposes of the analysis, would amount to a violation of law. A report about conduct that is merely problematic or contemplated, but not unlawful, is not protected conduct under the Minnesota Whistleblower Act.

Court’s analysis

Price-discrimination reports. The court analyzed Lubow’s allegations under the Robinson-Patman Act, which prohibits certain price differences between purchasers of commodities of like grade and quality when the differences may substantially reduce competition.

For the Costco allegation, the court found that Lubow identified only one specific comparison: a Sam’s Club quote that was lower than the Costco quote. Lubow offered general claims that other retailers received higher prices but did not provide specific supporting evidence. The court also found no evidence that either the Costco or Walmart transaction affected competition, and stated that the alleged impact of only one instance involving each retailer would not be substantial.

The court further held that neither alleged price-discrimination event could constitute a violation on the facts presented because neither involved a completed purchase. The Costco transaction was only a bid, and the Walmart matter was only a refusal to offer private-label hot honey. The court explained that conduct merely contemplated, even if it would have been unlawful if completed, is not itself a violation of law.

Contract report. The court rejected Lubow’s claim that Sioux Honey violated the Walmart Supplier Agreement. The agreement required Walmart’s order to be revised if, around the time of a sale to Walmart, Sioux Honey sold or offered comparable merchandise to a competitor at a lower price or on more favorable terms. The court interpreted that provision as applying only when Walmart had already placed a purchase order for the relevant product. Because Walmart had expressed interest in hot honey but had never purchased hot honey from Sioux Honey, there was no Walmart order to revise and the provision did not apply.

Retaliation claim. Because none of the three reports concerned conduct that violated the law, the court held that none involved protected conduct under the Minnesota Whistleblower Act. Lubow therefore failed to establish the required initial case of retaliation, and the court granted summary judgment to Sioux Honey.

The court added that the claim would also fail at the later pretext stage. It found that Sioux Honey had produced substantial evidence supporting its explanation that Lubow was fired for concealing the signed Eurpac letter, and that Lubow had not shown discriminatory intent or that the explanation was unworthy of belief. The court stated, however, that it was not required to reach that issue after finding that Lubow had not shown protected conduct.

Disposition

The court granted Sioux Honey Association, Cooperative’s motion for summary judgment. It dismissed Scott Lubow’s claims with prejudice and directed that judgment be entered.