Stryker (NYSE:SYK) this week argued that the lawsuit it leveled against Zimmer Biomet (NYSE:ZBH) this spring, accusing its orthopedics rival of poaching sales reps, doesn’t need to include the former reps.
Kalamazoo, Mich.-based Stryker sued Zimmer Biomet in March in the U.S. District Court for Southern Texas, alleging “concerted and deliberate unfair competition, improper use of Stryker’s confidential and trade secret information, and improper solicitations of Stryker’s customers and employees” in the Houston area.
Zimmer Biomet allegedly enticed a pair of Stryker reps, Andrew Ruggles and Carson Combs, to set up a rival foot & ankle business targeting Stryker customers in breach of their non-compete and non-solicitation agreements, according to the lawsuit. The ex-reps “are now moving the business of those Stryker customers to defendants and utilizing Stryker confidential and trade secret information,” Stryker alleged.
Ruggles quit Stryker in November 2016 and allegedly recruited Combs to follow suit just 4 days later, according to the suit, which asked Judge Gray Miller for a temporary restraining order and preliminary injunction barring Zimmer Biomet, Ruggles and Combs from further alleged violations, according to court documents.
Zimmer Biomet in May moved to dismiss the case, arguing that although Stryker’s claims are pegged to Ruggles and Combs, it inexplicably failed to name them as defendants.
“Stryker’s proposed relief is specifically aimed at restricting the employment activities of Ruggles and Combs. Given the gravity of this request, they must be permitted to defend their actions and protect their livelihoods,” Biomet argued, according to court documents. “As such, Stryker will be unable to obtain complete relief if Ruggles and Combs are not parties to this action. In cases such as this where complete relief cannot be accorded in the absence of a non-party, dismissal of the complaint is appropriate.”
In a June 7 response, Stryker maintained that no law requires them to name the duo, because it’s going after Zimmer Biomet and not them.
“The relief sought by Stryker’s complaint is solely directed toward defendants, not Ruggles or Combs. The fact that Ruggles’ and Combs’ agreements may need to be interpreted as part of this dispute does not make them necessary parties because Stryker’s claims are tort claims,” Stryker argued, according to the documents. “If Ruggles and Combs wish to participate in this matter because they believe it is necessary to protect their interests (even though the complaint does not seek monetary or injunctive relief from them), then Ruggles and Combs are free to seek leave to intervene. But there is simply no applicable case law holding that Stryker needs to name them as defendants in order for this case to proceed, and defendants’ motion to dismiss on those grounds should be denied.”
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