UnitedHealth Employee Cleared to Join Health Venture of Amazon, Berkshire, JPMorgan
February 22 2019 - 1:44PM
Dow Jones News
By Jon Kamp and Anna Wilde Mathews
A federal judge on Friday denied a UnitedHealth Group Inc.
attempt to block a former employee from joining the new health-care
venture launched by Amazon.com Inc., Berkshire Hathaway Inc. and
JPMorgan Chase & Co.
The judge's denial of a request for a temporary restraining
order could make it harder for UnitedHealth's Optum health services
to use the legal discovery process to learn more about the unnamed
start-up venture and what the employee at issue, David W. Smith,
will be doing there. The venture's chief operating officer has
testified that it is focused on the health-care needs of its three
founders' own employees and isn't an Optum competitor. Optum, in a
lawsuit filed in January, contends the venture is a potential
rival.
U.S. District Court Judge Mark Wolf also on Friday ordered that
the case move to arbitration, something the defense had been
seeking.
"The parties shall select an arbitrator promptly," the judge
said in a one-page order.
A spokesman for Optum said Friday, "We are committed to
protecting our confidential information and will aggressively do so
in arbitration." A spokeswoman for the new health venture declined
to comment.
Optum has been trying to stop Mr. Smith, who spent 2-and- 1/2
years working in Optum's corporate strategy and product units, from
joining the new venture or sharing trade secrets, alleging his job
change violated a noncompete agreement. Mr. Smith joined the
venture, known in court filings as ABC, last month after quitting
his job at Optum in December. Mr. Smith has said he didn't leave
Optum with any company files and doesn't want or have any use for
that information in his current job at ABC.
The new venture has sparked scrutiny in the health-care world
since its formation last year, in part because of its three
high-profile backers and the limited details about its scope and
plans that its leaders have offered. Its broad goals are to improve
health care and rein in costs for employees of the founding
companies, the founders have said.
"We're in fundamentally different parts of health care" compared
with Optum, Jack Stoddard, the venture's chief operating officer,
testified in late January. He also said the venture's efforts
include focusing on the complexity of health insurance and asking
if it can "reinvent what insurance looks like in terms of benefit
design."
Optum has argued that testimony from Mr. Stoddard and Mr. Smith
show the venture is a competitor.
"Smith has failed to offer any reason to believe he not will
share Optum's information with ABC," Optum said in a filing this
week, before the judge's ruling. "And ABC has offered no reason to
doubt that the real reason Smith was hired was his keen insights
into Optum's strategy."
Write to Jon Kamp at jon.kamp@wsj.com and Anna Wilde Mathews at
anna.mathews@wsj.com
(END) Dow Jones Newswires
February 22, 2019 13:29 ET (18:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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