DEFENDANT FIGHTS BACK AGAINST MiMEDX "BLATANT INTIMIDATION" NON-COMPETE SUIT

Rhea-AI Summary

A former MiMedx Group, Inc. (NASDAQ: MDXG) employee, Caralyn Gargan, has filed counterclaims against the company, alleging 'predatory sales practices' and 'incentivized fraud, including Medicare fraud'. This action comes in response to MiMedx's lawsuit against Gargan and nine other former employees for allegedly breaching contractual obligations. Gargan's counterclaims describe MiMedx's suit as a 'blatant intimidation tactic'.

The filing references an FDA warning letter issued to MiMedx's CEO on December 20, 2023, regarding the AXIOFILL product. Gargan claims she left MiMedx after being pressured to sell AxioFill without FDA approval. This counterclaim follows a similar action by another former employee, Lora Whooley, filed earlier this month.

Positive

• None.

Negative

• MiMedx faces allegations of predatory sales practices and incentivized fraud, including Medicare fraud
• FDA issued a warning letter to MiMedx regarding its AXIOFILL product on December 20, 2023
• Former employees allege pressure to sell AxioFill without FDA approval
• Multiple former employees filing counterclaims against MiMedx
• Potential legal and regulatory risks for MiMedx due to alleged improper sales practices

News Market Reaction

-2.61%

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-2.61% News Effect

On the day this news was published, MDXG declined 2.61%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Ex-MiMedx Employee Caralyn Gargan Files Counterclaims for "Predatory Sales Practices" and "Incentivized Fraud" per Mintz Attorneys

MARIETTA, Ga., Aug. 26, 2024 /PRNewswire/ -- One of 10 defendants who were sued earlier this year by MiMedx Group, Inc. (NASDAQ: MDXG) today filed counterclaims against the placental biologics company.  Caralyn Gargan, a former MiMedx employee, filed the action against MiMedx for "predatory sales practices" and "incentivized fraud, including Medicare fraud." Gargan also formally presented her answers and defenses to MiMedx's lawsuit which claimed that the 10 former employees, who recently left the company, allegedly breached their contractual obligations to MiMedx. The filing describes the MiMedx suit as a "blatant intimidation tactic."

Specifically, the counterclaims by Gargan allege that MiMedx "engaged in and has directed members of its sales team including [the former employee] to engage in, predatory sales practices aimed at increasing its revenue by incentivizing fraud on the United States government, including Medicare fraud."

The claims reference a warning letter issued by the FDA to MiMedx's CEO, Joseph H. Capper, concerning its AXIOFILL product on December 20, 2023, and assert that the former employee and others "became increasingly uncomfortable about MiMedx senior leadership's direction to sell AxioFill, even though it had not been approved by (or even submitted to) the FDA for FDA Premarket Approval."

The claims filed by Gargan's attorneys at Mintz and Fellows Labriola allege that she left MiMedx after "MiMedx tried to compel its employees to continue selling a product that the U.S. Food and Drug Administration ('FDA') determined could not lawfully be marketed without prior FDA approval."

Today's counterclaims come on the heels of another filed earlier this month on behalf of another former MiMedx employee, Lora Whooley. To read the Gargan claim please click HERE. To read the Whooley claim, please click here HERE.

View original content:https://www.prnewswire.com/news-releases/defendant-fights-back-against-mimedx-blatant-intimidation-non-compete-suit-302230456.html

SOURCE Mintz

FAQ

What allegations has former MiMedx employee Caralyn Gargan made against the company (MDXG)?

Caralyn Gargan has filed counterclaims against MiMedx (MDXG), alleging 'predatory sales practices' and 'incentivized fraud, including Medicare fraud'. She also claims that MiMedx pressured employees to sell the AxioFill product without FDA approval.

When did the FDA issue a warning letter to MiMedx (MDXG) regarding its AXIOFILL product?

The FDA issued a warning letter to MiMedx's CEO concerning its AXIOFILL product on December 20, 2023.

How many former employees are involved in the lawsuit filed by MiMedx (MDXG)?

MiMedx (MDXG) filed a lawsuit against 10 former employees, alleging they breached their contractual obligations to the company.

What is the nature of MiMedx's (MDXG) original lawsuit against its former employees?

MiMedx (MDXG) filed a lawsuit against 10 former employees, claiming they breached their contractual obligations to the company. The counterclaims describe this lawsuit as a 'blatant intimidation tactic'.