Pat Miles’ arc of history of the last 20 years in spine is unrivaled. And he just added to the record as a Delaware judge ruled on June 7, 2019, that Miles did not violate his non-compete agreement with NuVasive, Inc., his former company.
Miles started out at Medtronic Sofamor Danek. Then, along with former NuVasive Chairman and CEO Alex Lukianov and former President Keith Valentine, took over sleepy NuVasive, Inc. in 1999 (two years after it was founded) and turned it into a $2.7 billion (market value) spine company. At the top of his game, he left to take over Alphatec Holdings, a struggling Southern California spinal implant company.
When Miles assumed the leadership of Alphatec in 2017, the new leadership team at NuVasive sued him in a court in a Delaware Chancery Court for violating his non-compete agreement and stealing employees to take with him to Alphatec. NuVasive also sued Alphatec.
NuVasive Accusations
NuVasive alleged that Miles, “schemed for over a year to secure a massive equity stake in a struggling competitor…and then steal NuVasive’s employees, distributors, customers, medical partners, product developments, and business strategies to revitalize Alphatec, causing the value of his equity stake to skyrocket.”
Judge: “Contrary to Public Policy Interest”
In his note of resignation from NuVasive, Miles allegedly wrote: “I do not believe the post-employment non-compete and no hire restrictions in my current contract are enforceable against me (as a California resident and employee).”
There was no argument that Miles signed a noncompete agreement with NuVasive, but the Delaware judge found that California law applied to Miles’ contract with NuVasive, and that the post-employment non-compete restrictions were contrary to “California’s strong public policy interest against noncompetes.”
He therefore granted Miles’ Motion for Partial Summary Judgment.
In an August 27, 2019 press release, Craig Hunsaker, Alphatec’s general counsel and Executive VP, said the ruling confirms that NuVasive’s non-compete agreement was “illegal from the start, Pat was free to resign and join [Alphatec] and he violated no law or enforceable contract in doing so. We believe NuVasive’s 2017 lawsuit and purposefully broad, public pronouncement of its specious claims against Pat were part of a calculated scheme aimed at punishing him for leaving NuVasive, tarnishing his reputation, dissuading others from leaving NuVasive and preemptively harming an emerging competitor, rather than at protecting any legitimate legal interest.”
Miles said the ruling echoes what he told NuVasive when he resigned, “in an attempt to dissuade prior leadership from engaging in wasteful litigation. Having said that, the success of this company will be neither defined nor derailed by lawsuits. Our sole focus is on making spine surgery better, to the benefit of patients in the operating room.”
The closure of this suit comes after Miles raised $57 million for Alphatec.
