Lawyers in a lawsuit filed by Stryker Corp. (NYSE:SYK) accusing Zimmer Holdings Inc. (NYSE:ZMH) of building its spine business on the back of Stryker’s scuffled over the disclosure of documents in the case, with each side accusing the other of ignoring court-established deadlines.
The accusations flew fast and furious in a series of letters sent between August 1 and August 3, according to court documents, as each side labelled the other’s positions as variously "ludicrous," "frivolous," "premature," "just another attempt to waste this Court’s and Stryker’s time," "material misrepresentation of fact," "blatant gamesmanship" and once again "ludicrous."
It took Magistrate Judge Patty Shwartz of the U.S. District Court for New Jersey to break the impasse. Shwartz, denying Zimmer’s move to have her sanction Stryker and the latter’s bid to extend discovery deadlines, ordered both sides to cough up the documents and related privilege logs by August 11, according to court documents.
The case, filed in April, accuses Zimmer of unfair competition via the poaching of a bevy of upper-echelon Stryker execs, including a vice president with SYK subsidiary Howmedica Osteonics. Zimmer enacted a scheme to recruit the execs by "willfully and maliciously targeting and soliciting Stryker employees for employment at Zimmer," according to the lawsuit.
“Zimmer’s scheme is simple,” the complaint alleges. “Using the recommendations of former Stryker Spine sales leaders it previously recruited, Zimmer first identified high-potential Stryker employees … and induced them to breach [their] contractual obligations by asking them to gauge their coworkers’ initial level of interest in an ‘opportunity’ with Zimmer.
“Once these trusted ‘ringleaders’ planted the bait, Zimmer would make contact with the new Stryker recruits, offering significant salary increases and additional perks to capture the attention of employees who had no prior contact with or interest in working for Zimmer."
The "ringleaders" then allegedly sought to pressure the recruits "by urging them not to ‘disappoint the team’ or ‘throw a wrench’ in the team’s plans to go to Zimmer en masse," according to the suit.
"Finally, when these subtle pressure tactics failed, one employee faced threats and intimidation," the lawsuit alleges.
The scheme led to "Stryker’s loss of nearly two entire sales branches in the West Region – the Arizona and Las Vegas branches," leading the Kalamazoo, Mich.-based firm to anticipate losing millions of dollars in sales from Zimmer’s "brazen" conduct, according to the documents.