Alphatec (NSDQ:ATEC) this week announced a countersuit against NuVasive Inc. (NSDQ:NUVA) in response to charges levied at its recently joined exec chair Patrick Miles, who jumped ship from NuVasive to lead Alphatec in early October.
Earlier this month, NuVasive filed charges against Miles, claiming that he was involved in a year-long scheme to back Alphatec and discourage NuVasive from acquiring it, in addition to breaches of contract and violations of non-compete, non-solicitation and anti-poaching clauses.
In its countersuit, Alphatec claims that any non-compete restrictions placed on Miles are illegal and void in California, where NuVasive and Miles reside. The company goes on to express that it believes NuVasive not only knows about this legal issue, but was using the policy “advantageously in court against Globus Medical” in a case filed just over a week before Miles resigned, according to a spokesperson.
The suit also claims that Miles’ exit was driven by a significant “cultural divide” at the company which drove a number of senior members of the company to exit, and provides information on what it claims was a history of “alienating behavior” from NuVasive’s senior leadership which drove him to leave the company.
“By Summer 2017, it was clear to Mr. Miles that he no longer had any meaningful influence over NuVasive, or any other meaningful role there. Despite being listed on the NuVasive website’s Investor Relations page as an active member of “Executive Management” (A curious decision by NuVasive, about which Mr. Miles was, for a prolonged period of time, completely unaware), Mr. Miles participated in no Executive Committee meetings, no strategy meetings, and attended virtually no events involving surgeon customers. He had an ostensible office on-site at NuVasive, but rarely (if ever) went to the facility in an operational capacity. He began actively exploring opportunities, related to but outside the core spine industry, in an attempt to continue to utilize the skills he developed over his 25-year career, to maintain contact and relationships with surgeons and key opinion leaders in spine, and to build an innovative, high culture organization,” counsel for Alphatec argued, according to court documents.
In its countersuit, Alphatec asks for a jury trial and is seeking compensatory damages and legal costs alongside any other relief the court deems just and proper.
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