Stryker Corp. sues orthopedics rival Biomet and a pair of ex-sales reps, accusing them of a scheme to poach Stryker sales teams and diverting customers. Stryker accused Biomet and a pair of former sales representatives of a scheme to poach reps and business from Stryker in Louisiana and New York.Christopher Ridgeway and Richard Steitzer allegedly conspired with Biomet in the scheme, according to a lawsuit filed Monday in the U.S. District Court for Western Michigan. Steitzer quit in June to work for Biomet; Stryker fired Ridgeway Sept. 10, according to the lawsuit, after discovering that he was allegedly running a pair of medical supply businesses on the side.
Over the past 2 weeks, Stryker uncovered an ill-conceived and long-planned scheme by Biomet, using Stryker representatives in both New York (Steitzer) and Louisiana (Ridgeway), to erode Stryker’s customer relationships and raid sales teams from Stryker’s Neuro Spine ENT business unit and craniomaxillofacial division. Complete with secret code words, Biomet’s scheme involved Ridgeway and Steitzer as proxies, while still Stryker employees [emphasis in original], to intentionally damage Stryker and sabotage its ability to compete in a highly competitive marketplace.
The lawsuit also accuses Ridgeway of failing to make enough hires to keep his territory competitive, alleging that he turned down 33 applicants for Stryker but hired some for his sideline businesses. Ridgeway made the southern Louisiana branch “so hostile that 4 employees have resigned in the past 20 months, resulting in an 80% turnover rate during that time period.
Biomet began courting Ridgeway
In June, Stryker accused, Biomet began courting Ridgeway, allegedly looking to bring his entire Stryker sales teams on board.
“In June 2013, Ridgeway informed his sales representatives that Biomet expressed interest in bringing the Stryker CMF and NSE sales teams to Biomet and that Biomet would ‘offer us a lot of money,’” according to the documents. “Over the course of the next few months, Ridgeway was in conversations with Biomet regarding moving Stryker business to Biomet. He was nervous about Stryker finding out his plans, and used the code word ‘pancake’ to discuss the business he planned to “‘flip”.
Ridgeway also allegedly induced a 3rd Stryker employee, Sheldon Green, to jump ship for Biomet and forwarded Stryker’ Louisiana customer list to Green, according to the complaint. Stryker also accused Steitzer of lying about his role at Biomet, saying he accepted severance payments pegged to his agreement not to work for a competing business at Biomet.
Upon review of plaintiffs’
Upon review of plaintiffs’ complaint and motion for temporary restraining order, the court finds that plaintiffs have shown a likelihood of success on the merits of their breach of contract claims. However, the court is not convinced that immediate and irreparable injury, loss, or damage will result to plaintiffs before defendants can be heard in opposition,” Bell wrote. “Defendants are now on notice of plaintiffs’ assertions regarding their alleged breaches of their confidentiality agreements and non-compete agreements, and any temporary restraining order would merely require defendants to abide by the terms of those same agreements.