Synthes Continues to Sue

Posted on April 10, 2012 by Rob Radcliff

                                  

At the beginning of the year, we predicted that health care related litigation would continue to rise through 2012 as that industry continues to grow, in large part because of our aging population.  Mentioned in the post were some lawsuits filed by Synthes,  a European-based medical device manufacturer.  Synthes has historically enforced its non-compete and non-solicitation agreements against former sales persons around the United States.  The medical device industry is big business and in many cases, based on strong relationships with doctors.

Synthes continues to enforce those agreements.  In a recent case, Synthes filed suit against a former salesperson in the Denver, Colorado area, who left Synthes and went off to start his own competing medical device venture.  Synthes sued and the employee counterclaimed.  The counterclaim is interesting.  Whether it has any merit, is another question.  Basically, he asserts that Synthes tactics violate antitrust laws.

Whether you love or hate Synthes, you have to respect their tenacity and the seriousness with which they approach their post-employment covenants.  As we have discussed here previously, employers with these type of agreements should uniformly enforce them, and not make exceptions or ignore violations of them.  This both supports the actual claim in court and also acts as a deterrent when an employee is considered breaching a post-employment covenant.  Bottom line, if you're going to draft these agreements, enforce them and take them seriously.  Post-employment covenants make sense in certain situations depending upon your venue and law. 

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Get Ready for More Healthcare Non-Competes

Posted on January 9, 2012 by Rob Radcliff

                                  

Medical device manufacture, Synthes Medical Company, has filed a number of lawsuits against former employees alleged to have violated non-compete and non-solicitation agreements.  The lawsuits illustrate the rise of litigation within the medical world over non-competes. 

Synthes, with whom I have firsthand experience, is very aggressive in prosecuting former employees who have violated non-compete agreements and non-solicitation agreements, against its former salespersons. A lot of this litigation has to deal with spinal implants, which are not surprisingly, very lucrative.

The medical industry is growing, and will continue to grow as our baby boomer generation ages. The projections are staggering:

 

By 2035, in the absence of change, spending for Medicare alone (which is more likely to be impacted by aging Boomers) will have more than doubled to 8 percent [of GDP], and by 2080 it will have grown to 15 percent.

 

The forecast for medical industry litigation includes more non-compete disputes between doctors and their medical groups as well as on the sales side of medical devices such as the Synthes lawsuits. As with any non-compete agreement, employers need to make sure that if they are using these agreements they will stick.  Meaning employers need to have a strategy in place to enforce them and not simply put them in an employment contract as an afterthought.  This is specifically an issue when you have sales persons in different state jurisdictions with different laws.

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