U.S. FEDERAL JUDGE KEEPS SIGNIFY HEALTH EXECUTIVE SIDELINED AS CORPORATE ESPIONAGE CASE HEADS TO TRIAL

Rhea-AI Summary

The U.S. District Court for Delaware has granted a preliminary injunction preventing Marcus Lanznar, a former executive of CareCentrix, from working at Signify Health (SGFY) into 2022. The court found a strong likelihood that Lanznar violated his non-compete agreements with CareCentrix. This ruling allows CareCentrix to pursue its case against Signify, alleging corporate espionage and theft of trade secrets. The case centers on Lanznar's actions while still employed by CareCentrix, where he allegedly shared confidential information with Signify and drew salary from both companies.

Positive

• CareCentrix's legal victory enhances its position against corporate espionage, demonstrating the enforceability of non-compete clauses.

Negative

• The allegations against Signify raise concerns over potential reputational damage and legal costs associated with the ongoing litigation.
• The case may distract from Signify's operational focus and strategic initiatives.

HARTFORD, Conn., Dec. 20, 2021 /PRNewswire/ -- The U.S District Court for the District of Delaware has issued a preliminary injunction barring former CareCentrix executive Marcus Lanznar from working for his new employer into 2022, after finding that there was strong likelihood that Mr. Lanznar violated his employment and non-compete agreements with CareCentrix when he took up employment with competitor Signify Health (NYSE: SGFY).

Following the ruling, CareCentrix's corporate espionage and theft of trade secrets case against Signify will proceed to full discovery and trial.

Central to CareCentrix's case against Signify is Lanznar's direct violation of the employment covenants he signed when he joined CareCentrix more than 10 years ago: those covenants include legally binding pledges to preserve and protect proprietary company trade secrets and data, including by not competing with CareCentrix for one year after leaving CareCentrix's employment.

As alleged by CareCentrix in its suit against Signify, Signify was fully aware of the reasonable and appropriate limits Lanznar had agreed to, even as Signify hired Lanznar to build out post-acute care and transition-to-home capabilities to directly challenge CareCentrix. For example, Lanznar sent Signify's leadership written strategic analysis and secretly drew full-time paychecks from Signify, all while still employed by CareCentrix for several weeks at the end of 2020. 

CareCentrix took legal action earlier this year against Lanznar and Signify, a post-acute and home health market competitor, alleging that Signify acted improperly, in deliberate cooperation with Lanznar, to commit a campaign of corporate espionage against CareCentrix over an extended period of months in 2020.

"This order recognizes the value of covenants that protect a company's propriety and confidential information, by imposing fair limits on an employee's ability to compete with their current employer. Signify and Mr. Lanznar knew that Mr. Lanznar had agreed to these limitations, but they disregarded them, and they got caught. We welcome this decision. It's the right call," said John Driscoll, CareCentrix CEO. 

The case is:

U.S. District Court for the District of Delaware
Case Number: 20-cv-01765-LPS
(CareCentrix Inc. vs. Lanznar et al)

About CareCentrix
CareCentrix is the leader in health-at-home solutions and is committed to making the home the center of care. Managing care for 19 million members through a network of approximately 8,000 provider locations, CareCentrix focuses on bringing members home to bring costs down. By drawing on insights from proprietary analytics, and connecting end-to-end clinical, social and caregiver services, CareCentrix eliminates unnecessary hospital readmissions, closes gaps in care, and reduces fragmentation. And ultimately, to help more people live, heal, and age at home. CareCentrix has been named one of FORTUNE's Best Workplaces for Aging Services and has received the Cigna Well-Being Award for demonstrating a strong commitment to the health and well-being of its employees. The company has also earned numerous Top Workplaces distinctions from Top Workplaces USA, the Hartford Courant, and the Tampa Bay Times. For more information, please visit www.carecentrix.com.

 

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SOURCE CareCentrix

FAQ

What did the U.S. District Court rule regarding Marcus Lanznar and Signify Health (SGFY)?

The court issued a preliminary injunction preventing Marcus Lanznar from working at Signify Health into 2022 due to likely violations of his non-compete agreements with CareCentrix.

What are the implications of the lawsuit for Signify Health (SGFY)?

The lawsuit could lead to reputational damage and ongoing legal expenses for Signify Health, impacting its business operations and focus.

What is the main allegation in CareCentrix's lawsuit against Signify Health (SGFY)?

CareCentrix alleges that Signify engaged in corporate espionage by knowingly hiring Lanznar to share proprietary information.