Quintec Films Corp. now is free to start manufacturing stretch film at its new plant in Shelbyville, Tenn., following an out-of-court settlement with Huntsman Packaging Corp.
The firms resolved the case Sept. 24, according to Quintec and Huntsman Packaging officials.
Huntsman Packaging had sued Quintec Chief Executive Officer Terry Jones and three other former Huntsman employees July 6 in U.S. District Court in Nashville, Tenn. The suit alleged they had misappropriated trade secrets and planned to use the information at Quintec. The suit also alleged that one of the former employees breached provisions of a covenant not to compete.
According to Quintec lawyer Overton Thompson, Quintec will allow an independent expert to review its formulations and inspect its facility until the end of 1999.
According to a statement from Huntsman Packaging, Quintec has agreed to use only Huntsman-approved formulations, initially, to make stretch film products, and to provide notice of any changes in such formulations to Huntsman until Dec. 31, 1999.
Quintec also agreed not to contact or solicit any companies appearing on a list of Huntsman stretch film customers until the end of 1999, with the exception of the three distributors to which Quintec had intended to sell the bulk of its film, according to Thompson.
Quintec will pay Huntsman $5,000 a month for 12 months because ``it's cheaper than the legal fees we would have incurred,'' said Thompson. ``The case was not scheduled for a hearing until next May.''
``We are satisfied that the settlement sends a clear message that we will not tolerate the misappropriation or unauthorized use of our trade secrets,'' Ronald Moffitt, senior vice president and general counsel of Huntsman Packaging, said in a news release.
Quintec's $5 million plant will be operational this month. The company is installing Black Clawson Sano equipment and claims to be the world's only stretch film manufacturer capable of producing seven-layer film.
``We were going to prove two things,'' Jones said in a news release. ``First, with five extruders producing seven-layer films, Quintec will produce films substantially different and more advanced than Huntsman's.
``Second, our film formulations were developed at Union Carbide [Corp.] with their assistance, and we did not rely on or need Huntsman information.''
Huntsman Packaging, one of the largest North American film and flexible packaging manufacturers, is based in Salt Lake City. It placed fifth in Plastics News' ranking of North American film and sheet manufacturers, with film sales of $767 million.
The firm produces more than 800 million pounds of film and flexible packaging annually for many markets, including food, medical and pharmaceutical applications, infant diaper, personal-care, household goods and garden supplies.