CareCentrix files corporate espionage lawsuit against Signify Health
The post-acute care company CareCentrix filed a complaint in U.S. district court against Marcus Lanznar and Signify Health, accusing Lanznar of corporate espionage and theft of confidential information.
"CareCentrix entrusted Lanznar with its highest levels of confidential information, strategies, and trade secrets," read a redacted version of the complaint filed in a Delaware district court on Monday.
"As Signify prepared to go public, it combatted CareCentrix’s superiority by launching a scheme with Lanznar to use Lanznar as a spy within CareCentrix," the complaint alleged.
"As a matter of policy, we do not comment on pending lawsuits or legal proceedings," said a Signify representative in response to requests for comment. "However, we dispute the claims asserted by CareCentrix and intend to vigorously defend the lawsuit."
Lanznar did not respond to requests for comment.
WHY IT MATTERS
CareCentrix uses analytics to determine the appropriate site for post-acute care as well as providing support and coordination for patients and families throughout care transitions. Meanwhile, Signify's platform combines technology, analytics and networks to power and create value-based payment programs.
"CareCentrix and Signify both compete in the benefits management market, employing technology, analytics, business strategies, expertise and network presence to allow payers and providers to control costs," according to the complaint.
As outlined in the lawsuit, Lanznar worked for CareCentrix between March 2012 and November 2020. At the time of his resignation in November 2020, Lanznar served as CareCentrix's general manager, vice president of product – a position that, CareCentrix says, gave him access to proprietary and trade secret information.
"As the Product GM, Lanznar not only had knowledge of CareCentrix’s existing Products, but also its future plans to enhance those Products and the analytical data used to develop and measure those enhancements," the complaint alleges.
"Lanznar also helped CareCentrix determine what new Products that CareCentrix should bring to market. In this way, Lanznar’s work had a significant impact on CareCentrix’s operations on a national scale."
CareCentrix also claims that Lanznar signed a non-compete covenant agreeing not to work for any of its competitors for nine months after his termination of employment. It alleges that he knew Signify was a competitor.
CareCentrix alleges that when Lanznar gave his resignation notice in October 2020, he told CareCentrix he was not joining a competitor. However, he began working for Signify in November. The dates on Lanznar's LinkedIn page are consistent with this timeline.
But according to the complaint, Lanznar conducted interviews in July 2020 with most of Signify's top executives, and signed an offer letter with Signify on August 4.
"By mid-August 2020, while still employed at CareCentrix, Lanznar was participating in strategic planning calls with Signify executives and making plans to attend a 'major strategy session' at a Signify executive team offsite meeting," the court documents say. Throughout September, Lanznar and Signify Chief Product Officer Boumenot scheduled "biweekly" check-ins, according to CareCentrix.
Further, CareCentrix alleges that when it reviewed Lanznar's work emails, it found various instances of him forwarding proprietary CareCentrix information to his personal email before leaving the company.
"By October 2020, Lanznar’s spying was all-encompassing as he was indiscriminately passing information to Signify that he received from colleagues at CareCentrix," reads the lawsuit.
CareCentrix claims that Signify was aware of Lanznar's contractual obligations to CareCentrix and continued to retain Lanznar as an employee.
"During his surreptitious dual employment, Lanznar funneled confidential CareCentrix information and trade secrets to Signify (including information related to each of CareCentrix’s businesses, including Medicare and Medicaid)," the complaint alleges. Among other requests, CareCentrix is asking the court to issue an injunction preventing Lanznar and Signify from using its trade secrets and to award it damages and attorneys' fees.
A source close to the case told Healthcare IT News that it is important for courts to address these types of cases to ensure that employee mobility and business competition are practiced legally.
THE LARGER TREND
A number of high-profile lawsuits have been filed by major digital health companies over the past year.
In October, the telehealth company Teladoc filed suit against its competitor Amwell over alleged patent infringement.
That same month, the electronic health records company Allscripts filed a trademark suit against CarePortMD.
ON THE RECORD
"Signify’s and Lanznar’s scheme is precisely the type of conduct that the law and Lanznar’s multiple restrictive covenants were designed to prevent," reads the complaint. "Lanznar refuses to honor his legal and contractual obligations and Signify insists on continuing to employ Lanznar despite full knowledge of, and participation in, his wrongdoing."