The surgeon allegedly called and said, “Just remember Cara, snitches get stitches.”
Cara Casalenuovo was a Stryker Corp. sales rep in the company’s Las Vegas office on March 21, 2011, when she, Stryker branch manager Tom Fallon, and her fellow sales reps Brian Rowan, Alex Poulemanos and Ruben Burciaga all resigned to accepted sales positions with Zimmer Spine.
However, according to a lawsuit filed by Stryker against Zimmer and ten individuals on April 1 in New Jersey, the next day Casalenuovo contacted David Sponsel, Stryker’s Las Vegas Area Manager, about her resignation and changed her mind.
The above surgeon made the alleged comment to Casalenuovo on March 28 after she refused to join the mass move to Zimmer. Stryker alleges that the surgeon was calling “at the direction of, or in coordination with Burciaga and/or Fallon, on behalf of Zimmer.” The surgeon allegedly said that if she was telling Stryker anything disparaging about her former co-workers, he would never do business with Stryker again.
The same scene played out in Arizona on March 21, when Stryker Branch Manager Christopher Loughran and Sales Manager Ryan Lively submitted their resignations to join Zimmer along with their sales reps, Ryan Hermansky, Zach Hilton, Rob Borcherding and Chris Duffy.
Stryker Responds
Stryker didn’t wait long to act.
On April 1, Stryker sued Zimmer, Zimmer Spine’s new COO and former Stryker VP of Sales Paul Graveline and nine other former ex-Stryker employees. Stryker accuses the defendants of corporate raiding by, “willfully and maliciously targeting” Stryker employees as part of an alleged scheme to establish a spine-related products division “without expending any effort to built it.”
Zimmer’s scheme was simple, states the lawsuit.
“Using the recommendations of former Stryker Spine sales leaders it previously recruited, Zimmer first identified high-potential Stryker employees—who each had strict contractual obligations not to directly or indirectly solicit other Stryker employees to leave their employment—and induced them to breach these contractual obligations by asking them to gauge their coworkers’ initial level of interest in an ‘opportunity’ with Zimmer.
“Once these trusted ‘ringleaders’ planted the bait, Zimmer would make contact with the new Stryker recruits, offering significant salary increases and additional perks….
“Next, Zimmer would redeploy these ‘ringleaders’ into the groups of recruits, where they would exert subtle peer pressure by urging them not to ‘disappoint the team’ or ‘throw a wrench’ in the team’s plans to go to Zimmer en masse.
“Finally, when these subtle pressure tactics failed, one employee faced threats and intimidation.”
These actions, according to Stryker, escalated in March and resulted in Stryker’s loss of nearly two entire sales branches in the West Region.
Stryker says that the company has been notified by several surgeons that former Stryker sales reps have contacted them about shifting their allegiance over to Zimmer products. Stryker expects to lose millions of dollars in sales as a result of Zimmer’s alleged targeted recruitment of its employees.
Stryker also claims the en masse departure poses harm far beyond just significant monetary losses. “Stryker’s former Branch Managers and Sales Representatives will be able to exploit Stryker’s confidential and proprietary information to unfairly compete against Stryker on behalf of Zimmer, ” stated the Stryker lawsuit seeking an injunction to stop Zimmer and the defendants from pursuing business.
The lawsuit shines a light on the details of the competition for sales territory rarely seen by the public.
Stryker says the targeted Stryker employees were given instructions to state that they were first contacted by Zimmer managers, not the alleged Stryker ringleaders. Further, the ringleaders were instructed to falsely deny whether they knew if other Stryker employees had been made offers by Zimmer.
Las Vegas
Zimmer, according to the suit, first used Fallon, Stryker’s Las Vegas Branch Manager, along with Rowan and other sales reps within the branch to spark interest about leaving Stryker.
The effort began in late December 2010, when Fallon, Rowan and other sales reps allegedly began making off-handed comments about leaving to form a Stryker distributorship or to work for a competitor.
For example, at a dinner on December 23, 2010, Fallon and Casalenuovo were discussing the departure of another Stryker sales rep when Fallon allegedly asked Casalenuovo, “What if the rest of us left?”
On March 13, 2011, Rowan allegedly told Casalenuevo that Zimmer’ Kevin Brothen, a former Stryker employee, was going to contact her.
The next day Brothen sent Casalenuovo a text message asking her to meet with him. Brothen had allegedly flown to Las Vegas to meet with each of the sales reps. Stryker says Fallon and Rowan coordinated these meetings with Brothen, and that Zimmer was particularly interested in recruiting the entire Las Vegas group to come over to Zimmer as a team.
According to the suit, when Brothen and Casalenuovo met, “despite the fact that she never interviewed with Zimmer or submitted a resume, ” Brothen offered her a job on the spot. Brothen allegedly told Casalenuovo that Zimmer was pouring a substantial amount of money into its spine group. Brothen also told Casalenuevo that Zimmer would fully back her departure from a legal standpoint, if necessary.
“A New Stryker”
Rowan, allegedly told Casalenuovo that with Brothen, Fallon and Graveline in place at Zimmer, Zimmer would essentially be a “new Stryker.”
On March 23, when Fallon came into Stryker’s office to return his laptop, he saw that Casalenuovo was still there. The suit says that Casalenuovo, “Almost immediately” received multiple phone calls and text messages from Fallon and the other reps that resigned on March 21 to join Zimmer.
That same evening, fellow rep Poulemanos allegedly came to Casalenuovo’s house. He told her that if she told them [Stryker] anything, “it could ruin our lives.”
Casalenuovo, according to the suit, called a surgeon on March 27 who was a long-standing customer of Stryker and had worked extensively with Burciaga. She told him that Stryker hoped to continue its relationship with him. The surgeon allegedly replied by saying, “Don’t sell Ruben [Burciaga] out.” He told her that he would continue to use Stryker as “a second” but that “Ruben [Burciaga] is my guy, ” and that he planned on moving his business to Zimmer.
The following day, Casalenuovo received an unsolicited call from the same surgeon who then made the alleged comment about snitches getting stitches.”
Arizona
Stryker alleges that a similar scene played out in Arizona with Loughran and Lively paving the way for Brothen to recruit the branch’s sales reps. The result was a mass resignation on March 21 by managers Loughran and Lively and sales reps, Hermansky, Hilston, Borcherding and Duffy.
During a March 17 meeting between Brothen and Borcherding, Brothen allegedly told him that Zimmer would fully back their departure from Stryker, from a legal standpoint and “indemnify” them if necessary. In addition, Brothen also told Borcherding that Zimmer was pouring a substantial amount of money into its spine group, and that it was personal between him and Stryker. Brothen also told him that if anyone asked, Borcherding should say that Brothen was the first person to contact him about the opportunity to join Zimmer.
Between March 23 and March 25, 2011, after speaking with a handful of Stryker employees, Borcherding and Duffy decided that they were going to rescind their resignations and come back to Stryker.
On March 25, 2011, after Borcherding decided that he would not join Zimmer, Brothen allegedly requested that Borcherding “keep quiet” and not tell anyone the “specifics” of what had occurred, so as not to burn any bridges.
Chicago
Zimmer’s efforts were not limited to the Southwest.
According to the suit, at the behest of Zimmer, Christopher Giebelhaus, a Stryker sales rep at Stryker’s Chicago branch, met with fellow Stryker sales reps Brian Miller and Will Williams to discuss the possibility of the three of them joining Zimmer.
Williams then allegedly received a call from Dana Lyons, a Zimmer manager, in which Lyons referenced conversations with Giebelhaus and asked Miller and Williams to meet with him and Giebelhaus to discuss an opportunity with Zimmer.
Giebelhaus, according to the suit, then arranged for himself, Miller and Williams to meet with Lyons and Steve Leshey, the manager of the Zimmer St. Louis Distributor, Patriot Medical, on January 10, 2011. Both before and during this meeting, Stryker claims Giebelhaus acted as the ringleader.
Soon after that meeting, Giebelhaus and Williams travelled to Zimmer’s spine headquarters in Minnesota to meet with Zimmer personnel. A week later, Miller went to Minnesota where he was introduced to the company’s COO, Paul Graveline. Stryker claims, Graveline, despite his post-employment contractual obligations owed to Stryker, allegedly said to Miller that Zimmer would love to have him, and that Miller would be successful at Zimmer.
William and Miller eventually declined to join Zimmer.
The Accusations
Stryker accuses Zimmer and the defendants of: Breach of Contract and Fiduciary Duty, Misappropriation of Trade Secrets, Tortious Interference, Corporate Raiding and Unfair Competition. In addition Stryker seeks an injunction to prevent any Stryker business moving to Zimmer.
The court has not issued a ruling.
