Deutsch Family Files Lawsuit Against Former Company President

Deutsch Family Wine & Spirits (DFWS) has filed a lawsuit against former company president Tom Steffanci, alleging that during his tenure Steffanci violated confidentiality agreements in numerous ways and improperly conducted outside business using his Deutsch credentials. Steffanci was a top executive at the company as it built Josh Cellars into the U.S. market’s leading wine brand in retail value terms, according to Impact Databank.

The allegations in Deutsch’s lawsuit came to light in the fallout from Steffanci’s own 2020 lawsuit against the company, in which he asserted he was entitled to royalties from the Josh Cellars and Joseph Carr brands via his 20% stake in holding company DFG V, which had been arranged through Deutsch Family years earlier. Additional allegations of impropriety emerged during extended contract negotiations between Deutsch and Steffanci over the past year.

According to Deutsch’s suit, which is now pending in the U.S. District Court, District of Connecticut, Steffanci was entitled to a buyout of his 20% stake in DFG V after he left Deutsch Family, pending certain preconditions, which Deutsch says he’s failed to fulfill. Specifically, Deutsch’s suit states that “Steffanci could not finish his employment at the Company and then be entitled to a buyout if he had committed any terminable conduct during his employment.”

In fact, Deutsch alleges that Steffanci breached his employment contract in multiple ways, such as by using his Deutsch email address to solicit business for Boyanci Wines, a California winery owned by Steffanci and his wife. As part of his contract, Steffanci was obligated “to not solicit business on behalf of Boyanci—or even discuss Boyanci—with DFWS’s business partners and competitors in the industry,” according to the lawsuit.

Deutsch alleges that in February 2015, Steffanci “reached out to a California winemaker employed by one of DFWS’s key business partners to see if the winemaker had interest in sharing an existing contract for grapes that Boyanci had entered into at an earlier date.” According to Deutsch, Steffanci made this proposition from his Deutsch email address. As of the late April filing, Deutsch said it’s unaware of other violations of the “Boyanci Provision” in Steffanci’s employment contract but that more may be uncovered during discovery.

Following Steffanci’s original lawsuit against Deutsch, the company says it also discovered numerous breaches of Steffanci’s confidentiality agreement, including sharing of private company marketing and financial information with Steffanci’s wife, neighbor, bank, and the networking group Young Presidents’ Organization. Steffanci also created and shared a Powerpoint presentation with the organizers of the Wine Industry Financial Symposium 2024, which contained confidential information.

Steffanci continued on as Deutsch’s president for several years even after suing the company, and Deutsch says it was aiming to extend his tenure with a new contract up through much of last year. But the company alleges that Steffanci did not negotiate his contract renewal in good faith. The suit says that for seven months Steffanci “engaged in dilatory tactics like moving the goalpost on negotiations, backtracking on prior proposals, seeking to alter terms that had already been agreed upon in principle,” among other stalling tactics.

After the contract negotiations broke down, SND exclusively reported early this year the appointment of veteran sports executive Mike Dee as Deutsch’s new president.

Deutsch also says that Steffanci hampered the company’s investigation into his alleged confidentiality violations by taking and extending a leave of absence up to March 31, 2025, his final day as company president.

Then, on April 3, three days after leaving the company, Steffanci, according to the filing, contacted Deutsch CEO Peter Deutsch to begin the process of valuing Steffanci’s stake in DFG V. That move, says Deutsch, necessitated its lawsuit to clarify that Steffanci is no longer entitled to the buyout after breaching his employment contract.

Deutsch is seeking court certification that, due to his conduct, Steffanci “has no right to be rewarded with a buyout of his interest” in DFG V. In addition, Deutsch is seeking monetary damages to be determined at trial, attorneys fees, and an injunction preventing Steffanci from further disclosing Deutsch’s proprietary information.—Shane English

Tagged : Deutsch Family Wine & Spirits, Josh

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