A former sales manager for Johnson & Johnson‘s (NYSE:JNJ) Synthes orthopedics subsidiary broke a non-compete agreement when he jumped ship to help form and lead Emerge Medical, a federal judge in Pennsylvania ruled this month.
Emerge Medical CEO John Marotta resigned from his role at Synthes in April 2010, after incorporating Emerge Medical in Colorado in January of that year, according to court documents. Synthes sued Marotta and a clutch of other former employees in March 2011, alleging that they violated non-compete agreements, attempted to steal Synthes customers and illegally used proprietary information.
Marotta counter-sued in April 2012, claiming that Synthes violated antitrust statutes, used its legal might to limit competition and sent Emerge’s customers misleading letters to drive them back to Synthes.
Judge Ronald Buckwalter of the U.S. District Court for Eastern Pennsylvania found June 5 that Marotta violated his contract with Synthes, according to court documents.
"While still employed with Synthes, Marotta actively solicited existing and potential Synthes customers to ‘invest’ in Emerge, falsely charged Emerge-related expenses to Synthes, obtained and transferred confidential Synthes information to Emerge, and took Synthes product to assist in the development of competitive products. Marotta’ s own testimony, which often consists of an inability to recall or an uncertainty about the details of various events, simply cannot contradict the overwhelming evidence of record that Marotta went beyond mere preparation to compete and was actually competing with his employer," Buckwalter wrote.
In a 2nd ruling issued June 11, Buckwalter shot down the claims alleged in Marotta’s counter-suit, finding that he and Emerge failed to back up their trade libel, tortious interference and unfair competition claims against Synthes.
"With respect to its trade libel claim, Emerge has failed to create any issue of material fact as to whether the litigation letters or other statements were false or resulted in actionable damages. With respect to its tortious interference claim, Emerge has not put forth sufficient evidence upon which a reasonable fact finder could determine that all elements of that claim are satisfied. As to the unfair competition claim, Emerge has rested its allegations on the same conduct underlying the previous two claims, and because such conduct is not otherwise tortious or unlawful, it cannot support an allegation of unfair competition," the judge wrote. "Finally, having already considered the substantive merits of the subjects on which Emerge seeks a declaratory judgment, the court declines to exercise jurisdiction over the declaratory judgment claims."