Intuitive Surgical, J&J’s Ethicon bury the hatchet over sales rep’s non-compete

Intuitive Surgical (NSDQ:ISRG) and Johnson & Johnson (NYSE:JNJ) subsidiary Ethicon agreed to bury the hatchet last month over a former Ethicon rep’s non-compete agreement, according to court documents.

Sunnyvale, Calif.-based Intuitive sued Ethicon in a California federal court in August, alleging that the J&J division was using “intricate legal gymnastics” to sidestep California’s restrictions on non-competes, aiming to prevent its employees from hiring on with Intuitive.

The Golden State’s “labor mobility” statutes mean that non-compete agreements are void. Ethicon sought to get around that by filing a lawsuit in an Ohio state court, according to the lawsuit, seeking an injunction to prevent Intuitive from hiring 1 of its sales reps, Scott Szesterniak – even though Szesterniak lives and works solely in California.

Shortly after he signed on with Intuitive as a clinical sales rep in Los Angeles in July, Szesterniak allegedly gave his notice at Ethicon and promised not to call on any of the sales contacts he’d had for the prior 18 months. Intuitive issued strict instructions to Szesterniak, admonishing him “not to bring to Intuitive or use on Intuitive’s behalf any trade secret, confidential, or other information or material arguably belonging to Ethicon, and to instead return all such information and material to Ethicon. Mr. Szesterniak acknowledged that he understood Intuitive’s admonition, and certified his compliance with the foregoing,” according to the complaint.

That wasn’t enough for Intuitive, which went so far as to hire an outside law firm to “take possession of all devices issued by Intuitive to Mr. Szesterniak as well as Mr. Szesterniak’s personal email accounts, Google Drive account, smartphone, laptop computer, and other devices potentially implicated by Ethicon’s nebulous claims; create forensic images of the foregoing; and identify and purge any information or materials belonging to Ethicon,” the complaint claimed.

According to Oct. 19 filings with the U.S. District Court for Northern California, Judge Nathaniel Cousins dismissed the case with prejudice after Intuitive and Ethicon told him they’d “resolved this action by mutual agreement” with each party bearing its own costs.

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