Ascenda claims fired COO tried to swap IP for $39m
Molecular testing company Ascenda BioSciences is suing a former chief operations officer, claiming he attempted to “extort” the return of sensitive company information before taking up employment with a direct competitor.
Ascenda is seeking both injunctive relief and damages against defendant Perry Little, who worked at the DNA and diagnostics-based company from 2015 to October 2019.
The suit, filed at Delaware’s Court of Chancery earlier this week, claimed Little breached a non-competition agreement “by obtaining employment with a company that competes with Ascenda” and “misappropriated Ascenda’s trade secrets.”
Ascenda provides DNA and diagnostic services to healthcare providers, more specifically polymerase chain reaction-based (PCR) laboratory testing, used to amplify trace amounts of DNA and identify the source.
“The testing process is not generally known or readily ascertainable by others or to the public, which provides a competitive advantage over anyone else attempting to provide similar services,” claimed Ascendia in the filing.
Little, as the company’s former chief operating officer, had “direct access to all of Ascenda’s confidential and proprietary information about its business operations,” the company said.
The claim of extortion stems from Little’s departure from the company on October 4, 2019, when his contract was terminated, the company said.
Little declined a severance agreement (one month’s salary) but, according to Ascenda’s complaint, told his former employer that he was “receptive to continuing to negotiate an acceptable agreement, and that he had engaged an economic expert to value the worth of his agreeing to the terms in the severance agreement, later revealed to be between $7,632,375.00 and $39,745,700.00”.
Ascenda said it was “confounded by this off-the-wall valuation,” especially considering Ascenda had no obligation to offer any severance and the high point of Little’s annual salary was no more than $180,000.
Based on the counteroffer and the manner in which Little was using the severance agreement to “extort money,” Ascenda withdrew the severance offer, said the court documents, and advised Little that whether or not he signed the severance agreement, he was still obligated to the terms of the non-compete agreement, specifically to return all company property and information.
Soon after, the complaint said Little contacted Ascenda asking for a job referral for a position he had applied for with GeneID Lab, a molecular testing laboratory specialising in gene DNA sequencing, the “very area Little knew was a target of Ascenda.”
Ascenda now believes that Little has been hired by GeneID, thereby breaching the terms of the non-compete agreement, the company said.
Ascenda has requested (among other things) for a permanent injunctive relief barring Little from “working for, in any way, GeneID Lab, or any other entity operating a business that provides PCR testing in competition with Ascenda for a period of one year from the date of the order.”
Ascenda is also demanding the immediate return of all documents, data, correspondence or information in his possession.
The company is also seeking compensatory damages against Little, “in an amount to be determined at trial for violating the Delaware Uniform Trade Secrets Act.”
Both Ascenda and GeneID Lab have been contacted for comment.
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