CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 1 of 31
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`
`
`
`
`IN THE UNITED STATES DISTRICT COURT FOR THE
`DISTRICT OF MINNESOTA
`
`
`ST. JUDE MEDICAL S.C., INC.,
`ABBOTT LABORATORIES INC., and
`ABBOTT LABORATORIES,
` Plaintiffs,
`v.
`
`
`BIOTRONIK, INC., and
`JOHN N. PHILLIPS,
`
`
`
`Case No. 21-cv-1340
`
`JURY TRIAL DEMANDED
`
`
`Defendants.
`
`COMPLAINT
`
`Plaintiffs St. Jude Medical S.C., Inc, (“St. Jude”), Abbott Laboratories Inc. (“ALI”),
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`and Abbott Laboratories (collectively with ALI, “Abbott”), by and through their
`
`undersigned counsel, bring
`
`this Complaint against Defendants Biotronik, Inc.
`
`(“Biotronik”) and John N. Phillips (“Phillips”) and allege as follows:
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`INTRODUCTION
`
`1.
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`Plaintiffs bring this action to put an end to Defendants’ illegal scheme to steal
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`Plaintiffs’ trade secrets and customers, hatched while Phillips was still a St. Jude employee.
`
`This is not the first time St. Jude has had to sue Biotronik over such allegations, see St.
`
`Jude Medical, Inc. et al. v. Biotronik SE & Co. KG, et al., Case No. 15-cv-3134 (D. Minn.),
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`and the same pattern is now repeating itself again.
`
`2.
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`St. Jude and its corporate affiliate, Abbott, are among the leaders in medical
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`devices related to cardiac rhythm management (“CRM”), such as pacemakers, that use
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`electrical pulses to treat improperly beating hearts and other cardiac conditions.
`
`
`
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT FOR THE
`DISTRICT OF MINNESOTA
`
`
`ST. JUDE MEDICAL S.C., INC.,
`ABBOTT LABORATORIES INC., and
`ABBOTT LABORATORIES,
` Plaintiffs,
`v.
`
`
`BIOTRONIK, INC., and
`JOHN N. PHILLIPS,
`
`
`
`Case No. 21-cv-1340
`
`JURY TRIAL DEMANDED
`
`
`Defendants.
`
`COMPLAINT
`
`Plaintiffs St. Jude Medical S.C., Inc, (“St. Jude”), Abbott Laboratories Inc. (“ALI”),
`
`and Abbott Laboratories (collectively with ALI, “Abbott”), by and through their
`
`undersigned counsel, bring
`
`this Complaint against Defendants Biotronik, Inc.
`
`(“Biotronik”) and John N. Phillips (“Phillips”) and allege as follows:
`
`INTRODUCTION
`
`1.
`
`Plaintiffs bring this action to put an end to Defendants’ illegal scheme to steal
`
`Plaintiffs’ trade secrets and customers, hatched while Phillips was still a St. Jude employee.
`
`This is not the first time St. Jude has had to sue Biotronik over such allegations, see St.
`
`Jude Medical, Inc. et al. v. Biotronik SE & Co. KG, et al., Case No. 15-cv-3134 (D. Minn.),
`
`and the same pattern is now repeating itself again.
`
`2.
`
`St. Jude and its corporate affiliate, Abbott, are among the leaders in medical
`
`devices related to cardiac rhythm management (“CRM”), such as pacemakers, that use
`
`electrical pulses to treat improperly beating hearts and other cardiac conditions.
`
`
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 2 of 31
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`3.
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`Biotronik competes with Plaintiffs in the extremely competitive United
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`States CRM market, but has had little success penetrating it. As a result, Biotronik has
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`once again resorted to unlawful competition to try to steal business from Plaintiffs.
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`4.
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`CRM devices are technologically complex, which requires CRM sales
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`professionals to be versed in both technical knowledge and clinical application of the
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`devices. Because of this necessary expertise, and the sensitive trade secrets and
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`confidential pricing information involved in the sale of these devices, both Plaintiffs and
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`Biotronik require sales representatives to sign employment agreements that include post-
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`employment confidentiality, non-competition, and non-solicitation obligations.
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`5.
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`Phillips was St. Jude’s Regional Sales Director of CRM in Eastern
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`Pennsylvania and Delaware for over six years. He promised Plaintiffs, in multiple
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`agreements, that he would protect their confidential information and would not solicit
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`employees to work for a competitor or perform certain work for a competitor himself while
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`employed by St. Jude, and for one year thereafter. Biotronik knew of these restrictive
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`covenants because Phillips provided Biotronik his St. Jude Employment Agreement during
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`the hiring process, because St. Jude’s restrictive covenants were the subject of the parties’
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`prior litigation, and because Biotronik employs similar restrictions (including when it hired
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`Phillips).
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`6.
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`Biotronik offered to hire Phillips by no later than January 28, 2021, and
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`Phillips accepted Biotronik’s offer by signing his employment agreement on February 5,
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`2021. However, Phillips did not immediately resign from St. Jude; instead he waited two
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`full weeks to inform Plaintiffs that he was leaving for Biotronik.
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`7.
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`As set out in further detail below, it is now clear that during that time—while
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`Phillips was still legally employed by St. Jude—Biotronik schemed with Phillips to
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`effectuate a common plot to (i) have Biotronik use Plaintiffs’ confidential contract, pricing,
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`and rebate information obtained from Phillips to displace Plaintiffs as the preferred CRM
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`vendor at Einstein Healthcare Network (“Einstein”) and (ii) solicit St. Jude’s CRM
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`representatives to join Biotronik to help take over Biotronik’s new Einstein account, in
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`violation of their own non-compete agreements with St. Jude and its affiliates.
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`8.
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`And Einstein is only the tip of the iceberg. Just days before tendering his
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`resignation, beginning on the evening of Saturday, February 13, 2021, Phillips marched
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`through Plaintiffs’ customer files for his region in alphabetical order, methodically
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`accessing electronic versions of contracts and pricing information for at least 14 accounts.
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`He then picked up again where he left off on Sunday, February 14, accessing sensitive
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`documents for more than a dozen additional accounts. Typically accessing a document no
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`more than a minute or two after he accessed the previous document, Phillips accessed at
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`least 50 sensitive documents related to at least 28 accounts over three weekend sessions.
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`During this time, he was printing material.
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`9. When Phillips was confident he had taken all he and Biotronik needed, he
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`resigned, notifying Plaintiffs on February 19, 2021, of his intention to leave.
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`10.
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`Plaintiffs bring this action for (a) breach of contract; (b) violation of the
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`Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 (the “DTSA”); (c) violation of the
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`Minnesota Uniform Trade Secrets Act, Minn. Stat. § 325 (“MUTSA”); (d) tortious
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`interference with business relations; (e) constructive trust and unjust enrichment; (f) breach
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 4 of 31
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`of fiduciary duty; (g) civil conspiracy, and (h) tortious interference with contract to stop
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`Defendants’ illegal actions and obtain redress for the harm they have caused Plaintiffs.
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`PARTIES
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`11.
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`St. Jude Medical S.C., Inc., is a Minnesota corporation with a place of
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`business at One St. Jude Medical Drive, St. Paul, MN.
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`12. Abbott Laboratories Inc. is a Delaware corporation with its principal place
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`of business in Abbott Park, Illinois.
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`13. Abbott Laboratories is organized under the laws of the State of Illinois and
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`has its principal place of business in Abbott Park, Illinois.
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`14. Abbott Laboratories is the ultimate parent of St. Jude Medical S.C., Inc., and
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`Abbott Laboratories Inc., and as such all three entities are affiliates of each other.
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`15. Biotronik, Inc., is a Delaware corporation with its principal place of business
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`in Lake Oswego, Oregon. According to the Office of the Minnesota Secretary of State,
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`Biotronik, Inc. is a foreign corporation registered to do business in Minnesota since May
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`27, 2015.
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`16.
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`John N. Phillips is a resident and citizen of Pennsylvania.
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`JURISDICTION AND VENUE
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`17.
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`This Court has subject matter jurisdiction over the claim asserting violation
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`of the DTSA under 28 U.S.C. § 1331. The Court has supplemental jurisdiction over the
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`remaining state law claims under 28 U.S.C. § 1367 because those claims are so closely
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`related to Plaintiffs’ federal claim for misappropriation of trade secrets under the DTSA
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`that they form part of the same case or controversy.
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 5 of 31
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`18.
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`This Court has personal jurisdiction over Phillips because he has consented
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`to this Court’s jurisdiction over him. Ex. 1 ¶ 10H.
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`19.
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`The forum selection clause in Phillips’s Employment Agreement may be
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`enforced against Biotronik because it engaged Phillips as its agent for purposes of carrying
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`out its illicit plot while Phillips was still employed by St. Jude, with full knowledge that
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`disputes arising out of and relating to Philips’s Employment Agreement with St. Jude
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`would be subject to the Employment Agreement’s forum-selection clause, and because
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`Biotronik’s conduct in engaging Phillips and otherwise ratifying and benefitting from his
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`conduct is closely related to Phillips’s contractual relationship with St. Jude giving rise to
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`this action.
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`20. Biotronik has admitted that this Court has personal jurisdiction over it. See
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`St. Jude Medical S.C., Inc., v. Christopher Delgado and Biotronik, Inc., No. 14-cv-04418
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`(D. Minn.).
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`21. Venue is proper in this Court because St. Jude and Phillips irrevocably agreed
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`that “[a]ll actions or proceedings relating to [Phillips] Agreement” with St. Jude “will be
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`tried and litigated only in the Minnesota State or Federal Courts located in Ramsey County,
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`Minnesota.” Ex. 1 ¶ 10H. Additionally, venue is proper under 28 U.S.C. § 1391 because
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`this Court has personal jurisdiction over Defendants.
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`FACTS
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`The Cardiac Rhythm Management Market
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`22.
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`Plaintiffs are among the leaders in the cardiac rhythm management space and
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`manufacture and sell CRM devices to physicians and hospitals. CRM products are a subset
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 6 of 31
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`of implantable medical devices specifically designed to address a variety of heart rhythm
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`problems including arrhythmia (irregular heartbeat), bradycardia (slow heart rate) and
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`tachycardia (fast heart rate). CRM products include implantable pacemakers, implantable
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`cardiac loop recorders, and implantable cardioverter defibrillators, among other devices.
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`23.
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`The principal customers of Plaintiffs’ CRM products are the physicians,
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`hospitals, clinics, and other healthcare professionals and institutions that are implanting
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`and utilizing the CRM devices to treat patients with heart rhythm disorders. Establishing
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`and maintaining customer relationships and goodwill is an extremely important part of the
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`job of each CRM sales representative. CRM sales representatives are highly trained
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`professionals with responsibilities that run far beyond sales. They work hand-in-hand with
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`implanting physicians and their staff to provide training and education on devices, and
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`these healthcare professionals rely on representatives’ technical expertise regarding the
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`products. CRM sales representatives also assist healthcare professionals during implant
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`procedures, support device programming to optimize clinical benefit, and follow-up with
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`patients after procedures to help monitor their devices and provide other device support.
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`Plaintiffs therefore devote substantial resources to ensure that CRM sales representatives
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`develop the skills necessary to excel at their jobs, which can take years.
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`Phillips’s Role at St. Jude and his Employment Agreement
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`24.
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`In January 2012, St. Jude hired Phillips as a Territory Manager for CRM
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`sales in Philadelphia. In that role, Phillips managed six direct reports. When he joined St.
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`Jude, Phillips signed an employment agreement wherein he agreed not to disclose the
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`confidential information of St. Jude or its affiliates, not to compete with St. Jude or its
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 7 of 31
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`affiliates for a limited period after his employment ended, and not to solicit the employees
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`of St. Jude or its affiliates for such limited period.
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`25.
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`In August 2014, St. Jude promoted Phillips to a Regional Sales Director of
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`the CRM business. In that role, Phillips managed 30 direct reports, and was responsible
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`for sales of CRM products in Eastern Pennsylvania and Delaware. In his role as a Regional
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`Sales Director for St. Jude, Phillips was responsible for CRM product sales to some of
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`Plaintiffs’ large customers, including Einstein.
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`26.
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`Phillips executed a new Employment Agreement with St. Jude effective
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`February 1, 2016, which is attached as Exhibit 1 (hereafter, the “Employment
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`Agreement”). Phillips was paid significant consideration by way of a guaranteed three-
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`year employment term (absent cause), nearly $200,000 in payments upon signing, and an
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`annual income guaranteed to exceed $400,000 for a portion of the Employment
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`Agreement’s term. The Employment Agreement used the term “SJMSC” to include St.
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`Jude and its affiliates.
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`27.
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`In his Employment Agreement, Phillips promised
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`to protect
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`the
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`confidentiality of St. Jude’s and its affiliates’ Confidential Information and not disclose it
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`to any third party or use it for his own benefit (the “Non-Disclosure Provision”):
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`Employee will not disclose to a third party or use for Employee’s personal
`benefit Confidential Information of SJMSC. “Confidential Information
`means any information used or useful in SJMSC’s business that is not
`generally known outside of SJMSC and that is proprietary to SJMSC relating
`to any aspect of SJMSC’s existing or reasonably foreseeable business which
`is disclosed to Employee or conceived, discovered or developed by
`Employee.
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 8 of 31
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`28.
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`Phillips also agreed that during his employment and for a year thereafter, he
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`would not work for a competitor of St. Jude or its affiliates in his St. Jude territory, nor
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`would he directly or indirectly promote or sell competing products to a St. Jude (or its
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`affiliates’) customer or attempt to influence St. Jude (or its affiliates’) customers to direct
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`their business to a competitor (the “Non-Compete Provision”):
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`During Employee’s employment and for a period of one (1) year after the
`date of termination of employment with SJMSC for any reason, Employee
`will not directly or indirectly engage as a consultant, . . . employee, or in any
`other capacity with any business which designs, manufacturers or sells
`products which compete with products, now or later during Employee’s
`employment, that are designed, manufactured or sold by SJMSC or any of its
`affiliates in the territory assigned to Employee during the last year of
`Employee’s employment.
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`Phillips further agreed that during his employment and for a year thereafter,
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`29.
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`he would not directly or indirectly solicit any employees of St. Jude or its affiliates to leave
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`and compete with St. Jude (the “Non-Solicitation Provision”):
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`During Employee’s employment and for a period of one (1) year after
`termination of Employee’s employment with SJMSC for any reason,
`Employee will not . . . solicit any of SJMSC’s or its affiliates’ employees or
`sales representatives to terminate their employment in order to compete with
`St. Jude Medical, Inc., SJMSC or any of their affiliates.
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`30.
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`In his Employment Agreement, Phillips acknowledged that damages are an
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`
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`insufficient remedy in the event of violations of the Non-Disclosure, Non-Compete, or
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`Non-Solicitation Provisions, and agreed that Plaintiffs would be entitled to injunctions to
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`enforce them.
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 9 of 31
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`St. Jude / Abbott’s Longstanding Relationship with Einstein
`was Extended to Late 2023 in December of 2020
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`31.
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`In his role as Regional Sales Director, Phillips oversaw all sales of Plaintiffs’
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`CRM products to Einstein, a large CRM customer in the Philadelphia area, generating
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`millions of dollars in CRM sales revenue for Plaintiffs annually.
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`32. On October 24, 2017, Einstein and St. Jude entered into a CRM Products
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`Purchase Agreement. The agreement was amended from time to time. On April 20, 2018,
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`the agreement was amended to assign the contract to Abbott Laboratories Inc. and change
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`the terms of the rebate. On December 14, 2020—three months before Phillips left St.
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`Jude—the agreement was amended to extend the term of the agreement to October 26,
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`2023 (the 2017 St. Jude–Einstein CRM Products Purchase Agreement, its amendments,
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`and its related rebate agreements are the “Abbott-Einstein Contract”).
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`33. Under the Abbott-Einstein Contract, Einstein purchased the vast majority of
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`its CRM products from St. Jude / Abbott. This agreement delineated Einstein’s price for
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`each CRM product and implemented a confidential and competitively valuable
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`pricing/rebate structure. For example, in general terms, the rebate specified that Einstein
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`could qualify for various credits if Einstein’s CRM purchasing practices met specified
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`requirements related to the number of Einstein’s CRM vendors. If Einstein qualified, the
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`amount of the credit was determined based on a metric related to quarterly purchases, and
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`the credit could be adjusted based on other criteria.
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`34. As the Regional Sales Director responsible for Einstein, Phillips supervised
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`Jeffrey Winiecki (“Winiecki”), Ryan O’Connell (“O’Connell”), and Michael Mita
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 10 of 31
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`(“Mita”), St. Jude sales representatives who worked directly with the Einstein physicians
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`who use CRM devices.
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`Defendants Use Plaintiffs’ Confidential/Trade Secret Pricing/Rebate
`Structure to Illegally Compete with Plaintiffs
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`35. On January 28, 2021—approximately one month after Einstein extended its
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`contract with Abbott into late 2023—Biotronik sent an offer letter to Phillips. Phillips
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`signed the letter, accepting employment as a Regional Sales Director at Biotronik on
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`February 5, 2021.
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`36.
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`Phillips did not, however, notify Plaintiffs that he signed a contract with
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`Biotronik. In fact, Phillips waited two weeks—until February 19, 2021—to inform
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`Plaintiffs that he intended to join Biotronik. During that time—from January 25, 2021
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`(when his Biotronik offer was imminent) through February 17, 2021 (just two days before
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`he resigned)—Phillips repeatedly accessed documents comprising and relating to the
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`Abbott-Einstein Contract, which included the confidential, trade-secret pricing and rebate
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`structure (the “Einstein Pricing Structure”). Access to the confidential Abbott-Einstein
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`Contract was limited and secured within Plaintiffs. Phillips had no legitimate business
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`reason to access the Abbott-Einstein Contract between late January and February 17, 2021.
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`Indeed, he knew he was leaving and was already secretly working for Biotronik.
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`37. When Phillips finally announced his resignation on February 19, 2021,
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`Plaintiffs cut off Phillips’s access to its systems and set his last day of work as February
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`26, 2021, to allow time for transition. At no point did Phillips tell Plaintiffs that he was
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`already secretly working for their competitor, and had been for weeks, and was using that
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`time to review Plaintiffs’ files, in an effort to learn as much competitive information as
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`possible.
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`38. On Monday, February 22, 2021—five days after Phillips last accessed the
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`Abbott-Einstein Contract, seventeen days after he signed an employment agreement with
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`Biotronik, and while Phillips legally remained a St. Jude employee—Einstein informed
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`Plaintiffs that Einstein wanted to review the “pricing” and “Rebate structure” offered under
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`the Abbott-Einstein Contract, even though it had just been renewed and extended two
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`months prior.
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`39.
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`Einstein’s Senior Contract Manager told Plaintiffs’ representatives that
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`Biotronik had offered Einstein a deal structured just like the Abbott-Einstein Contract, but
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`with lower pricing and higher rebates. The Senior Contract Manager also said that he had
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`recently come under physician pressure, for the first time, to make that change. The Senior
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`Contract Manager also inquired about which representatives would work with Einstein
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`going forward despite the fact that Winiecki, O’Connell, and Mita had consistently been
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`Plaintiffs’ representatives at Einstein for many years and had not told Plaintiffs that they
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`planned to leave Plaintiffs.
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`40. On information and belief, in furtherance of his plot with Biotronik, Phillips
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`disclosed the Einstein Pricing Structure to Biotronik and Biotronik used this information,
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`with knowledge that it was Plaintiffs’ trade secret, to submit a pricing proposal that
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`underbid Abbott on every CRM product. On information and belief, Phillips used his
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`relationships with Einstein physicians to pressure Einstein to abandon the Abbott-Einstein
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`Contract and adopt a new relationship with Biotronik.
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`41. On April 27, 2021, Einstein informed Plaintiffs that it had selected
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`Biotronik’s proposal and would primarily purchase its CRM products from Biotronik
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`instead of Abbott, beginning May 1, 2021.
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`42. A few days later, Biotronik’s Phillips celebrated by going golfing with two
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`Einstein customers responsible for that business, as well as Winiecki—one of the St. Jude
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`employees on the Einstein account that Phillips solicited to join Biotronik, all in violation
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`of his Employment Agreement.
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`The Secrecy of Plaintiffs’ CRM Pricing Information
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`43.
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`Plaintiffs’ Einstein Pricing Structure was secret and Biotronik would not
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`have received the information but for Phillips’s wrongful taking of the information.
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`44.
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`Plaintiffs have gone to great lengths to maintain the secrecy of the CRM
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`pricing information, including the Einstein Pricing Structure.
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`45.
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`In the hands of a competitor, this information would allow the competitor to
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`strategically underbid Plaintiffs and steal customers.
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`46.
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`Plaintiffs invest millions of dollars each year to protect their confidential and
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`trade secret information, such as the confidential CRM pricing information, including
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`implementing appropriate security systems for both their physical offices and electronic
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`databases, including restricted, password-protected databases. Plaintiffs employ robust
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`technology systems designed to protect the integrity of their data and monitors their
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`systems for signs of infection, intrusion, and dissemination.
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`47.
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`Plaintiffs have policies that require employees to take appropriate
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`precautions against allowing unauthorized access and prohibits sharing unauthorized
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`information with third parties.
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`48.
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`Plaintiffs protect the confidentiality of the CRM pricing strategies and
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`information by limiting access to a small number of individuals. For example, the Einstein
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`Pricing Structure was not stored in any shared or widely accessible location. Employees
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`lacked access to the information unless their job required access to it, such as members of
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`Abbott’s Strategic Pricing and Contract team. The information was stored in secure
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`locations not accessible to employees outside the specific teams that required access to the
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`information to do their jobs. Phillips only had access to the Einstein Pricing Structure
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`because of his role as the Regional Sales Director.
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`49.
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`For the employees that do have access, Plaintiffs require that employees sign
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`agreements acknowledging the existence and importance of Plaintiffs’ confidential
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`information, agreeing not to use or disclose such information except as required and
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`authorized within the scope of their employment, and stipulating that they will not work
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`for a competitor for a period of time in any role that might involve the use of such
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`information.
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`50.
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`Plaintiffs also insist that their customers protect the confidentiality of the
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`CRM pricing information. For example, Einstein was contractually bound not to disclose
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`Abbott’s Einstein Pricing Structure to any competitor of Plaintiffs.
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`Phillips’s and Biotronik’s Plan to Improperly Hire Plaintiffs’ Employees
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`51. Winiecki, O’Connell, and Mita are St. Jude CRM sales representatives who
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`all worked under Phillips.
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`52.
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`Prior to joining Biotronik, Phillips knew that he would be unable to transfer
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`certain Abbott CRM customers to Biotronik without securing Winiecki, O’Connell, and
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`Mita’s Biotronik employment.
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`53.
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`For example, Winiecki devoted substantial time to working with specific
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`doctors at Einstein, and through his years of St. Jude employment, developed substantial
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`goodwill with the Chairman of Cardiology and Director of Electrophysiology, and other
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`Einstein staff.
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`54.
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`Shortly before receiving his offer from Biotronik, Phillips reviewed
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`O’Connell’s and Mita’s St. Jude and Abbott employment agreements, and before ending
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`his employment with St. Jude, Phillips informed Winiecki, O’Connell, and Mita that he
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`intended to leave St. Jude and join Biotronik. On information and belief, he sought—and
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`secured—their agreement to leave St. Jude and join Biotronik on July 1, 2021, after their
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`fixed-term contracts expire and convert to at-will employment.
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`55.
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`The only inference that can be draw from this is that, in furtherance of his
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`agreements and acting in concert with Biotronik, Phillips secured Winiecki’s, O’Connell’s,
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`and Mita’s agreement to defect to Biotronik and assist Phillips and Biotronik in converting
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`Abbott CRM customers within their territory to Biotronik customers. In doing so prior to
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`his resignation from St. Jude, Phillips willfully ignored his fiduciary responsibility to
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`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 15 of 31
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`Plaintiffs to try to sign Winiecki, O’Connell, and Mita to renewed fixed-term contracts that
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`would extend well beyond 2021.
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`56.
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`Phillips’s active attempts to poach St. Jude personnel are not limited to
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`Winiecki, O’Connell, and Mita. For example, soon after Phillips resigned, Phillips told
`
`another St. Jude CRM sales representative that Phillips wanted to speak with him about
`
`joining Biotronik when his St. Jude employment transitions to an at-will arrangement.
`
`Well before Biotronik was awarded the new contract with Einstein, Einstein’s Chairman
`
`of Cardiology and Director of Electrophysiology told this same representative that
`
`Winiecki would be leaving for Biotronik, and he warned the representative not to take
`
`Winiecki’s old position because all the business would be transferred to Biotronik. Other
`
`customers also inquired as to whom their new CRM sales representatives would be long
`
`before Winiecki, O’Connell, and Mita notified Plaintiffs of their intent to resign.
`
`57.
`
`Phillips and Biotronik succeeded in securing Winiecki, O’Connell, and
`
`Mita’s departure from Plaintiffs. They were formally recruited after Phillips had joined
`
`Biotronik and after Phillips’ predecessor had left his position. In particular, they agreed to
`
`terms with Biotronik by approximately March 2021, but—like Phillips before them—
`
`failed to alert anyone at Plaintiffs that they were leaving to join a competitor. Instead, they
`
`waited until June 2, 2021, to announce within hours of one another that each was resigning
`
`as of June 30, 2021, the final day of their contractual employment term, and planned to
`
`join Biotronik. In view of the Phillips and Biotronik conduct outlined in this Complaint,
`
`Plaintiffs immediately secured their laptops, cutoff their access to Plaintiffs’ systems, and
`
`
`
`15
`
`
`
`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 16 of 31
`
`directed them not to interact with Plaintiffs’ customers for the duration of their St. Jude
`
`employment.
`
`Phillips’s Improper Competition and Defendants’ Further Misappropriation
`
`58.
`
`59.
`
`Phillips’s new Biotronik territory overlaps with his former St. Jude territory.
`
`Since his separation from St. Jude, Phillips violated his covenant not to
`
`compete with St. Jude and its affiliates by working for Biotronik and helping it sell CRM
`
`products by calling on customers in his former territory. For example, Einstein and Main
`
`Line Health’s Lankenau Medical Center were in Phillips’s territory while at St. Jude. Since
`
`joining Biotronik, Phillips has worked to sell Biotronik CRM products to at least those
`
`facilities.
`
`60. While Phillips and Biotronik were aware of Phillips’s contractual limits
`
`before he began his employment with Biotronik, they were on specific notice as of March
`
`5, 2021. Via letter, Plaintiffs reminded them of Phillips’s noncompete, including specific
`
`accounts he was prohibited from soliciting. Einstein and Lankenau Medical Center were
`
`identified in that letter. Neither Phillips nor Biotronik objected to Plaintiffs’ March 5,
`
`2021, letter in any way.
`
`61. Moreover, prior to resigning from St. Jude, Phillips took a substantial amount
`
`of confidential trade secret information—including CRM pricing information—related to
`
`accounts within his territory. On the evening of Saturday, February 13, 2021, Phillips
`
`methodically accessed electronic versions of contracts and pricing information for at least
`
`14 accounts. He resumed on Sunday, February 14, collecting sensitive documents for at
`
`least another 14 accounts. Typically accessing a document no more than a minute or two
`
`
`
`16
`
`
`
`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 17 of 31
`
`after he accessed the previous document, he accessed at least 50 sensitive documents
`
`related to at least 28 accounts over three weekend sessions. During this time, he was
`
`printing material.
`
`62.
`
`Thus, not only is Phillips competing with Plaintiffs in violation of his
`
`contractual obligations, he is doing so with misappropriated trade secrets. For example, on
`
`February 14, 2021, Phillips accessed at least four contract documents for Main Line Health,
`
`the owner of Lankenau Medical Center. As noted above, Phillips has pursued Lankenau
`
`Medical Center since joining Biotronik.
`
`Biotronik’s and Phillips’s Windfall
`
`63.
`
`Through their improper disclosure and use of Plaintiffs’ confidential, trade-
`
`secret information and their plans to improperly disrupt Plaintiffs’ relationships with their
`
`customers and employees, Biotronik and Phillips will receive a financial windfall at
`
`Plaintiffs’ expense.
`
`64. Biotronik’s displacement of Abbott as the primary CRM vendor at Einstein
`
`alone will result in approximately $3,300,000 per year of revenue gains to Biotronik and
`
`revenue loss to Abbott. At the time Defendants unlawfully displaced Abbott as Einstein’s
`
`primary CRM vendor, the value of the Abbott-Einstein Contract’s remaining term
`
`exceeded $8,000,000 in sales for Abbott.
`
`65.
`
`Phillips will personally profit from this arrangement because Phillips’s
`
`contract with Biotronik handsomely rewards him for increasing Biotronik’s market share
`
`in his sales region.
`
`
`
`17
`
`
`
`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 18 of 31
`
`66.
`
`The harm inflicted on Plaintiffs by Defendants extends beyond the
`
`immediate loss of income caused by Einstein and other CRM customers purchasing
`
`products from Biotronik instead of Plaintiffs. Plaintiffs’ unfair displacement will cause
`
`immeasurable, long-term injuries to Plaintiffs’ business through the loss of these customer
`
`accounts and relationships, loss of access to customers to maintain and build Plaintiffs’
`
`goodwill, loss of opportunities to recruit and retain talented employees, loss of future CRM
`
`business opportunities, loss of prospects to increase sales of non-CRM products, loss of
`
`market share, and other irreparable harms.
`
`COUNT I
`Breach of Contract
`(Phillips)
`
`67.
`
`Plaintiffs repeat and reallege Paragraphs 1 through 66 as though fully set
`
`forth herein.
`
`68.
`
`The Employment Agreement is a valid and enforceable contract between St.
`
`Jude and Phillips.
`
`69.
`
`70.
`
`St. Jude fully performed its obligations under the Agreement.
`
`Phillips breached the Non-Compete Provision by accepting employment
`
`with Biotronik, a business that “sells products which compete with products” that are sold
`
`by St. Jude and its affiliates in the same territory assigned to Phillips while at St. Jude.
`
`71.
`
`Phillips further breached the Non-Compete Provision by selling to Einstein
`
`Biotronik CRM products that compete with the Plaintiffs’ CRM products that Phillips sold
`
`to Einstein while employed by St. Jude.
`
`
`
`18
`
`
`
`CASE 0:21-cv-01340 Doc. 1 Filed 06/04/21 Page 19 of 31
`
`72.
`
`Phillips also breached the Non-Compete Provision by influencing Einstein
`
`to direct its CRM business from Abbott to Biotronik.
`
`73.
`
`Phillips’s further breached the Non-Compete Provision by calling on
`
`customers in his former St. Jude territory, including Main Line Health’s Lankenau Medical
`
`Center.
`
`74.
`
`Phillips breached
`
`the Non-Disclosure Provision because Phillips’s
`
`employment with Biotronik has resulted in his use and disclosure of Plaintiffs’ Confidential
`
`Information, including the Einstein Pricing Structure.
`
`75.
`
`Phillips breached the Non-Solicitation Provision by soliciting St. Jude
`
`employees Winiecki, O’Connell, Mita, and others to terminate their employment with St.
`
`Jude to work for Biotronik.
`
`76.
`
`St. Jude and Abbott have already been injured by Phillips’s breaches of the
`
`Employment Agreement and seek all monetary damages recoverable as a result of those
`
`breaches.
`
`77.
`
`Plaintiffs have already been irreparably harmed, and will continue to be
`
`irrepara
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