Johnson & Johnson (NYSE:JNJ) unit DePuy Synthes last week sued Orthofix (NSDQ:OFIX) and a pair of former DePuy sales reps, alleging that its rival lured the reps and two other colleagues away so it could poach DePuy clients in Alabama and Texas.
According to the suit, filed in the U.S. District Court for Eastern Texas, DePuy hired Thomas Wells and Michael Sewell in 2012 as sales consultants for DePuy Synthes for the territory around Dothan, Ala. After the duo quit in March 2017 within hours of each other, the suit alleged, routine inventory checks at one of their clients revealed Orthofix devices and instruments that were sterilized and ready for surgery at on of their DePuy clients, Southeast Alabama Medical Center.
“In other words, Orthofix equipment had been brought in and was ready to be used in surgery,” according to the suit. And although DePuy products were slated to be used in multiple procedures that week, all but one of those cases were canceled.
“Despite its best efforts, DePuy Synthes has not done any further business at SEAMC,” according to the March 22 lawsuit. “Orthofix was able to convert an account worth millions of dollars practically overnight by using the investments DePuy Synthes made its customers relationships, goodwill, specialized training, and confidential information through Messrs. Wells and Sewell, inducing them to leverage these investments to Orthofix’s benefit.”