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31 January 2023Big PharmaMuireann Bolger

Cigna pursues trade secrets in ‘non-competes’ dispute

Move comes as Federal Trade Commission proposes controversial ban on non-compete clauses | Former executive requested list of “top clients” on day of resignation.

Healthcare insurance company Cigna is suing a former high-ranking executive who joined CVS Health over the alleged violation of a non-compete agreement, and the alleged theft of trade secrets.

Amy Bricker was formerly the head of Express Scripts, a subsidiary of Cigna that dealt primarily with pharmacies.

Earlier this month, CVS Health revealed that Bricker would become its chief product officer, prompting Cigna to file a lawsuit arguing that it would “be immediately and irreparably harmed if Bricker is permitted to commence her new position with CVS”.

According to Cigna, out of the 70,000 people who work for the company, only 16 high-level staff were bound by a non-compete clause—including Bricker.

FTC proposed ban

The move comes as the use of non-competes is under increased scrutiny in the US.

On January 5, the Federal Trade Commission (FTC) unveiled a proposed rule that would ban employers from imposing a clause on workers that many say has deterred acts of theft.

A non-compete clause blocks employees from working for a competitor, or starting a rival business, typically within a certain geographic area and period of time after the worker’s employment ends.

According to the FTC, about one in five US workers—approximately 30 million people—are bound by a non-compete clause and are restricted from pursuing better employment opportunities.

Under the new rule, it would be illegal for an employer to enter into or attempt to enter into a non-compete clause with a worker.

In July 2021, President Biden issued his Executive Order on Promoting Competition in the American Economy in July 2021, which favoured a ban on non-compete clauses.

A direct violation

Cigna argued in its complaint that Bricker’s activities were a direct violation of her contractual non-competition restrictions, and that “she is doing so in a role that would inevitably require her to use and disclose Cigna’s confidential and trade secret business information for the benefit of her new employer”.

It went on to insist that in her role, Bricker was privy to the business’s most highly sensitive information relating to the supply chain, product development plans, strategic direction, enterprise-wide initiatives, sales strategy, and client and health plan relationships.

“If Bricker were to be permitted to accept her position with CVS, she would be responsible for developing products and services in direct competition with…the broader Cigna enterprise,” said the complaint.

Alleged theft

The filing also alleged that on the day she tendered notice of her resignation, Bricker requested a list of “top clients” along with their email addresses.

After that, Cigna cut off Bricker’s access to its network and data, and asked Bricker not to return to the office but to make herself available as needed for transition purposes.

On January 13, 2023, Cigna made arrangements with Bricker to collect her company-issued devices prior to her last day of employment.

Eleven days later, Cigna security personnel went to Bricker’s home to collect her company-issued iPhone. The complaint said that Bricker appeared surprised about having to turn in her phone and told the Cigna security officer that she needed to get some numbers off the phone before handing it in.

Upon receiving Bricker’s iPhone, Cigna’s information technology specialists reported that the phone had undergone a factory reset.

Cigna conducted an investigation, which included a third-party forensic analysis of the phone, which allegedly confirmed that the phone had been reset, effectively deleting all data on the phone.

The complaint insisted that: “Bricker intentionally and knowingly performed a factory reset on the phone prior to turning it in, in an effort to delete all data on the phone. Bricker’s destruction of this information and evidence was deliberate, willful, knowing, and performed without authorisation or permission from Cigna.”

Bricker, it added, was responsible for the deletion of Cigna’s confidential information, which was unauthorised and was conducted in secret.

Cigna is seeking a permanent injunction "to hold Bricker to her contractual obligations and to prevent CVS from misusing Cigna’s trade secrets and confidential information", and is also demanding damages.

Back in August 2022, AstraZeneca succeeded in temporarily stopping its former vice-president of investor relations, Chris Sheldon, from moving to GlaxoSmithKline by alleging the breach of a non-compete agreement that he had signed.

The agreement prevented Sheldon from going to a rival specialising in respiratory, oncology and COVID-19-related treatments for six months after leaving AstraZeneca.

Divided opinion

The potential ban on non-compete clauses has divided lawyers.

Finnegan partner Robert McCauley noted that many advocates for the proposal claim that it will do nothing to threaten trade secrets or to undermine the protections afforded trade secrets under existing misappropriation law.

“They state that employee mobility and robust competition are [the] bedrock [of] innovation, and that workers and society will greatly benefit from this,” he said.

But he added that, conversely, innovator companies that spend vast sums to research and develop their proprietary technology will feel vulnerable.

“Laws that prohibit non-compete clauses have allowed competitors to improperly acquire and exploit innovator R&D investments by hiring away employees who use and/or disclose proprietary information at their next job.”

This is commonplace, he explained, and often occurs without any bad faith by former employees, often because they do not appreciate that what they learned at their former employer is proprietary information.

“Unfortunately, the trade secrets laws do little or nothing to protect a former employer in this predicament. It is this and other predicaments that offer support for non-compete agreements, at least for employees with proprietary knowledge and/or who have reached particular levels of responsibility,” he said.

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More on this story

Americas
25 July 2023   Amid criticism against restrictive covenants such as non-competes, what can life sciences firms do to keep their trade secrets safe and defend against unfair competition, ask David Pardue, Patti Bartis, and Sarah Hutchins of Parker Poe.
article
3 May 2022   A scientist working in Switzerland has been convicted of conspiring with his sister and others to steal trade secrets from GlaxoSmithKline for the benefit of their respective biopharmaceutical ventures.
Americas
1 September 2022   Suit claims a contractor used AltaThera secrets to launch a rival heart arrhythmia drug | Chicago-based company wants the court to add its founder as co-inventor on patent.

More on this story

Americas
25 July 2023   Amid criticism against restrictive covenants such as non-competes, what can life sciences firms do to keep their trade secrets safe and defend against unfair competition, ask David Pardue, Patti Bartis, and Sarah Hutchins of Parker Poe.
article
3 May 2022   A scientist working in Switzerland has been convicted of conspiring with his sister and others to steal trade secrets from GlaxoSmithKline for the benefit of their respective biopharmaceutical ventures.
Americas
1 September 2022   Suit claims a contractor used AltaThera secrets to launch a rival heart arrhythmia drug | Chicago-based company wants the court to add its founder as co-inventor on patent.