Conditional settlement reached on suit between Stryker Corp. and Zimmer Biomet Holdings

By John Sammon | Dec 6, 2017

HOUSTON  – A settlement agreement on Nov. 28 was reached in a lawsuit between Howmedica Osteonics Corp., a subsidiary of Stryker Corp. and makers of orthopedic implant devices, and Zimmer Biomet Holdings Inc., in which Biomet was accused of engaging in unfair competition, improper use of trade secrets and improper solicitation of Stryker customers.

An order of dismissal of the suit by the Houston Division of the Southern District of Texas stipulated that the case is dismissed without prejudice. If the settlement agreement cannot be fully documented or worked out, the plaintiff’s claims could be reinstated.

Stryker Corp., based in Kalamazoo, Michigan, is according to the company a global leader in the development, manufacture and sale of orthopedic implants and related products and services. Zimmer Biomet is a Warsaw, Indiana-based manufacturer of medical devices distributed by Biomet South Texas.

According to the original March complaint, Biomet South Texas was accused of soliciting Stryker sales representatives operating in the Houston area, encouraging them to breach their employment non-compete agreements with Stryker and its affiliates, and to take up employment with Biomet. The alleged goal was to set up competing foot and ankle care business to have former Stryker employees take customers away from the company and to use Biomet products instead.

Stryker employees had signed an agreement pledging not to solicit former customers for a period of one year after leaving employment with Stryker and not to disclose the company’s confidential information.

According to the complaint, Stryker employees Andrew Ruggles and Carson Combs, who had worked together as foot and ankle sales representatives in the Houston area, left the company and began working for Biomet South Texas. Within a few weeks in December 2016, the pair were allegedly soliciting their former Stryker customers.

In one instance on Dec. 12, 2016, Ruggles allegedly met with a surgeon he had formerly serviced for Stryker and promoted the sale of competing Biomet products for several upcoming surgeries. Such improper solicitations of doctors continued into 2017, the complaint said.  

Stryker officials sent warning letters to the pair informing them they were in violation of their agreements with the firm to no avail, according to the complaint. As a result attorneys for Stryker contended the company lost tens of thousands of dollars in the last month of 2016 alone and stood to lose hundreds of thousands in 2017.

Howmedica Osteonics Corp. sued for injunctive relief and damages to be determined at trial, costs and expenses, including attorney fees.  

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