Over the past weekend, the Crew obtained a copy of a legal complaint filed by Santa Fe Brewing Company against a former employee who now just happens to be a co-owner of Marble Brewery. It caught us slightly off guard, so we can only imagine how Jarrett Babincsak felt.

The Albuquerque Journal went ahead and ran with the story Tuesday, which we shared on social media. It left a lot of people with more questions than answers, so we will do our best to sum up what has led to all of this, what it all means, and where it could go from here. Well, the last part is the hardest to figure out, mainly because we are not legal professionals.

The complaint

The title of the document is “Complaint for Breach of Contact (sic), Fraud, and Fraud in the Inducement.” Santa Fe Brewing is listed as the plaintiff and Babincsak as the defendant. A preliminary statement reads as follows:

This action arises from Defendant Jarrett Babincsak’s fraudulent inducement to enter into a contract with Plaintiff Santa Fe Brewing Company and Defendant Babincsak’s breach of that contract. With full intention to leave Santa Fe Brewing Company and to purchase an interest in a competitor, Mr. Babincsak, under false pretenses, presented Santa Fe Brewing Company with a Severance Agreement pursuant to which he would provide consulting services and would resign from his position as Senior Vice President of Sales to help the company in exchange for a monetary sum. Instead, Mr. Babincsak resigned days after receiving payment, used the money that he received as severance to purchase an interest in Marble Brewery, and used his inside knowledge to harm Santa Fe Brewing Company.

All right, there is a lot to unpack there, and it all certainly leads to some questions. Going into the background of all of this, Babincsak was the vice president of sales and marketing at SFBC. Per a timeline in the complaint, he was alleged to have approached owner Brian Lock about acquiring an interest (ownership stake) in the brewery at some point in 2024. Lock turned him down. Later in the year, Babincsak informed Lock “that he thought it was in his best interests of SFBC if he resigned.”

The complaint stated that Babincsak presented SFBC with a severance agreement (this is a point of dispute in the response below). It was executed December 19, stating that Babincsak would work through January 2 and provide consulting services through February 28. The complaint went to state that Babincsak never told Lock that he was going to join the new Marble ownership group. That announcement came January 3, the day after Babincsak’s employment had ended at SFBC.

This produced the two main allegations, first that Babincsak had “intentionally induced SFBC to pay him a significant amount as a purported severance benefit at the same exact time that he was purchasing one of SFBC’s competitors.” The second allegation was that “during the two months in which Defendant Babincsak was contractually required to provide consulting services to SFBC, he was actively involved in soliciting employees of SFBC to leave their employment and work for Marble Brewery and also actively interfering with SFBC’s customer relationships.”

SFBC is seeking “a recovery of a judgement for actual and compensatory damages, a recovery of a judgement for pre-judgement and post-judgement interest, a recovery of punitive damages, and for such other and further relief to which it may be entitled under New Mexico law and the circumstances of this case.” So yes, lots of money, the amount of which is to be determined by the court if it finds in favor of the plaintiff.

The response

We texted back and forth with another Marble co-owner, Bert Boyce, to see if there would be any additional statements beyond the short one that was sent to the Journal. Much to our surprise, Babincsak sent us the following longer statement that offers some insight into his view of the situation and probable legal defense.

“The complaint made against me by Santa Fe Brewing Company is not only untrue but a hurtful distraction — for me, my family, our team at Marble, and all of our business partners. I gave eight years of my life to working at SFBC, and I remain proud of my contributions to its success and care greatly for many of the people there.

In early December SFBC owner Brian Lock proposed the idea of voluntary severance. I offered to accept a voluntary severance to leave SFBC and proposed terms and a formal agreement, which included accepting payment in lieu of compensation already owed to me by SFBC. Mr. Lock accepted the terms and we signed the agreement. I did not resign. I fulfilled all obligations of my severance agreement, which amounted to wrapping things up during my final two weeks of employment and being available to SFBC staff after to answer questions.

I was under no obligation to disclose any details about my professional future to Mr. Lock or SFBC. Mr. Lock did not express interest in where I was headed, and it was only after my departure and learning that I was working with others to potentially acquire Marble Brewery, that he raised concerns. 

My hope here is that we can all get back to making and enjoying great local beer. This is after all supposed to be fun and there’s room for everyone to be successful. My focus will continue to be on our team at Marble and helping lead this organization into a very bright future.”

The analysis by someone without a law degree

Now comes the hard part, breaking this down and explaining it as clearly as possible. Activating 25 years of journalism experience, and go!

• The crux of everything comes down to the interpretation of the severance agreement, which is a bit of a unique thing. Most of us have probably been laid off once or twice over the years, and yes, you tend to get a severance of some sort (unused vacation time is paid out, that sort of thing). In this case, however, it was a specific legal agreement with terms that were ultimately interpreted differently by the two parties.
• Note the difference in the complaint and Babincsak’s statement. SFBC claimed that Babincsak presented the severance agreement to Lock. He in turn claimed that Lock presented it. That will be the first item for the court to sort out.
• A sticking point for SFBC seems to be that two-month consulting period after Babincsak’s final day of employment. They seem to be indicating that it precluded him from working for any other brewery/competitor during that span. Babincsak, however, felt that did not hold him back at all from moving forward with the rest of the ownership group taking over Marble.
• SFBC alleged that Babincsak used the money from the severance to purchase his stake in Marble. This could be hard to prove if he can show that he had moved funds already in his account(s). Expect that to be a major point of dispute between the two parties.
• Babincsak stated that he felt he was not obligated to tell SFBC anything about his plan to join the new Marble ownership group. Clearly, they felt differently about that.
• It certainly provides some insight into how the biggest breweries feel about each other. The camaraderie presented publicly is not the case behind the scenes, where they consider themselves competitors instead of allies. We have basically known this for years, that the individual brewers tend to get along, but owners are often much more at odds with one another. Hey, we get it, they have businesses to run, and in the end they are competing with each other just as much as the big national companies for tap lines and shelf space.
• One other point in the complaint is that SFBC is alleging that Babincsak basically lured employees away to join the staff at Marble, and yes, it even included Boyce (page 5, paragraph 21, sub-paragraph D). When people at the executive level (head brewers included) move from one brewery to another, they often compel their colleagues to switch with them. It could be quite interesting if the court rules in SFBC’s favor on this count. Could it mean that any time a brewer leaves one brewery for another and takes some staff with him/her, the first brewery could file a lawsuit? We have no idea what this could produce on that front.

There is a lot of legalese tacked into the final lines of the complaint (titled “Prayer for Relief”), but basically SFBC wants monetary damages. The target is Babincsak, rather than anyone else associated with Marble (at least right now), so calling this a legal war between two breweries is incorrect. Still, if the other Marble owners rally around Babincsak, it could very well be pitting the two largest breweries against each other in court and beyond.

All we can really do now is let the process play out. Some of what results may become public record, or it may be sealed. This could even be settled out of court, as these types of cases often are, but if we were betting men and women, we would put money on it going to trial.

And, if any of you out there with more legal knowledge than us have any corrections to pass along, please DM us on social media or fire off an email to nmdarksidebrewcrew@gmail.com.

Thanks for reading this one. It was not fun to write, but news is news, even the depressing stuff.

— Stoutmeister