Policy, Payers

Optum sues to protect trade secrets from Amazon-Berkshire-J.P. Morgan venture

Optum said in the suit that due to the nature of his position, former executive David Smith was one of fewer than 50 people at the company with access to Optum’s consolidated set of profit and loss statements at a product-line level.

The Optum division of healthcare giant UnitedHealth Group has filed a lawsuit against former executive David Smith to prevent him from taking trade secrets to the Amazon-Berkshire-J.P. Morgan healthcare collaboration headed up by Atul Gawande.

Stat first reported on the suit – which was filed last week in Massachusetts District Court and seeks to stop Smith from relaying information he obtained at Optum before being hired by the Amazon-Berkshire-J.P. Morgan venture in December.

The suit claims that Smith, who served as vice president of corporate strategy and product during his tenure at Optum, was hired by the healthcare collaborative, referred to as “ABC” as its Director of Product Strategy and Research and planned to divulge trade secrets at the new company.

Optum said Smith moving to his new position at ABC is in violation of various restrictive covenants including nondisclosure, noncompete and non solicitation agreements.

Optum said in the suit that due to the nature of his position, Smith was one of fewer than 50 people at the company with access to Optum’s consolidated set of profit and loss statements at a product-line level.

Additionally, Optum claims that Smith printed “highly confidential information including an in-depth market analysis of the healthcare industry, and Optum’s potential opportunities in and solutions for the changing healthcare market” during his interview process with ABC and “approached several Optum employees seeking Optum’s confidential information that was unrelated to his own job duties at Optum.”

After receiving a written job offer from ABC, Optum claims Smith printed a document that contained ” highly confidential information concerning (Optum’s) product portfolio performance, new product development, and product job family and assessment plan.”

“UnitedHealth Group is a leader in healthcare because our people have spent decades developing custom products and services — intellectual property — that serve the needs of millions of individuals. While we won’t comment on any specific personnel matter, we are committed to protecting the hard work of our colleagues,” Optum spokesperson Matt Stearns told STAT.

A response to Optum’s claims filed by Smith’s lawyers said the company failed to prove that “Smith actually misappropriated, used, or disclosed any of
Optum’s trade secrets to damage Optum” and is only speculating that ABC will act as a “direct competitor” to Optum.

The response also provides more details about Smith’s hiring by ABC. The filing claims that Smith initially reached out to Gawande last summer before being later contacted by an ABC recruiter who set up an interview with ABC Chief Operating Officer Jack Stoddard.

After accepting the job offer and notifying superiors, Smith’s lawyers claim that he was placed on administrative leave and “left all Optum property behind.”

Smith lawyers further claim that after the threat of legal action by Optum, ABC sent a letter of response saying that Optum confused Amazon health initiatives with that of ABC and “ABC has no product or service that competes with Optum” and “ABC does not seek, want, nor permit any of its employees to use or disclose prior employers’ confidential information.”

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