Globus Medical (NYSE:GMED) yesterday sued Stryker (NYSE:SYK) and a former Globus engineer, alleging that she took proprietary trade secrets with her when she took a new job at Stryker earlier this month.
The lawsuit, filed in the U.S. District Court for New Jersey, alleges that Madeline Davis broke her non-compete and non-disclosure pacts with Globus when she took the job Nov. 1 at Stryker. Hire in 2015 as an associate project engineer and promoted to project engineer in January, Davis worked on the Forge corticocancellous spacer for cervical fusion, according to the complaint.
The NCND agreements bar Davis from engaging “in any competitive activity with any competing company,” defined as “participation in, performance of services for, employment by, ownership of any interest in, or assistance, promotion or organization of, any competing company” worldwide, Globus alleged.
When informed of the alleged breaches, Stryker denied in a Nov. 14 letter that Davis was in violation of her agreements, arguing that she’s not working in a competitive capacity as an advanced operations project manager “responsible for the design transfer and validation of an orthopedic product that has already been designed by Stryker,” according to the complaint.
Globus countered by saying that “every product undergoes design changes as the product transfers from a prototype to manufacture. Ms. Davis’s role, therefore, would require her to be involved in the design process for new products that would directly compete with Globus” and threatening to file suit by Nov. 17.
Globus also asked the New Jersey court for a temporary restraining order and expedited discovery, according to court documents.
Stryker and Davis responded by denying the allegations and refuting many of Globus’s claims, including that Davis had no prior medical device industry experience before joining Globus. Her new job involves the manufacturing process for already-designed metal products, not products still in development using biologic materials like her Globus gig, Stryker said.
“Accordingly, no legitimate interest of Globus is implicated by her new role with [Stryker],” the company said in the documents.
“Simply put, I will not be engineering biologic products nor will I be working in product development at all with Howmedica,” Davis said in an affidavit, noting that Stryker divides its project engineers between the R&D department and the advanced operations department. “In my capacity as an Advance Operations Engineer, I do not work in the R&D department, and I have no role in product design.
“I have not and will not play any role in the product design of any biologic products with Howmedica. I made this very clear to Globus when I resigned,” Davis added.
“[M]y job at Globus was not my first experience in the medical device industry. I graduated from Clemson University in 2014 with a Bachelor of Science in Bioengineering Engineering. Following graduation, I worked as a Product Development Engineer for Unilife Corporation, focusing on the development of reusable and disposable auto-injector product lines. In that role, and not in my role at Globus [emphasis theirs], I obtained experience in the creation, execution, and documentation of testing procedures to be used in design verification testing – general engineering skills which I will now use again at Howmedica,” she said.
Davis also denied having any knowledge or understanding of “companywide strategic analyses regarding sales, budget, and forecast information underlying the products I worked on, let alone any other Globus products. I was neither a manager, nor a director, nor a higher-level executive who would have had any responsibility whatsoever for understanding companywide strategic analyses,” according to the affidavit.