Synthes, Inc. v. Marotta

281 F.R.D. 217, 2012 U.S. Dist. LEXIS 30137, 2012 WL 748758
District Court, E.D. Pennsylvania·Decided March 6, 2012·No. Civil Action No. 11-1566·Published·Cited by 50 cases

Opinion

[221] MEMORANDUM

BUCKWALTER, Senior District Judge.

Currently pending before the Court is the Motion of Plaintiffs Synthes, Inc., Synthes USA HQ, Inc., Synthes USA, LLC, Synthes USA Sales, LLC, and Synthes USA Products, LLC (collectively “Synthes” or “Plaintiffs”) for Leave to Amend the Complaint. For the following reasons, the Motion is granted.

I. FACTUAL BACKGROUND1

A. General Information About Synthes and Its Efforts to Protect Confidential Information

Plaintiff Synthes is a worldwide leader in the medical device industry, marketing and selling medical implant devices, including plates, screws, rods, biomaterials, instrumentation, and other devices for orthopedic surgery. (Compl. ¶ 15.) Its customers include hospitals, hospital employees and directors, and physicians together with their employees and staff nurses. (Id. ¶ 16.)

Synthes markets and sells its products through a sales force comprised of Regional Sales Consultants and Associate Sales Consultants. (Id. ¶ 18.) These individuals report to Regional Managers, are assigned to specific territories within regions, and are generally paid on a commission basis. (Id.) The Regional Managers are responsible for the maintenance and growth of sales in the territories within their regions, and are also responsible for hiring, training, and management of Sales Consultants. (Id. ¶ 19.) They are often compensated based on sales within their regions and may also receive base compensation in addition to commissions. (Id.)

Because Synthes invests millions of dollars annually to develop its technology, systems, products, and strategies, and to educate and train its employees, it requires all employees to sign an Employee Innovation and Non-Disclosure Agreement (“Non-Disclosure Agreement”). (Id. ¶20.) In addition, employees hired in sales, marketing, and product development capacities must sign a Confidentiality, Non-Solicitation, and Non-Competition Agreement (“Non-Competition Agreement”). (Id. ¶ 21.) These Agreements, in part, protect against the disclosure of confidential information, prohibit solicitation of Synthes’s employees and Synthes’s existing or prospective customers, and prohibit activities during and after employment with or on behalf of any individual or entity that competes or intends to compete with Synthes, subject to geographic and temporal limitations. (Id. ¶¶ 20, 21.) In exchange for the employees’ execution of these Agreements, Synthes provides its employees with proprietary information, customer relationships, and valuable training programs. (Id. ¶ 22.) Synthes takes other measures to protect these interests by requiring the return of various information upon the employees’ separation from Synthes’s employment. (Id. ¶¶ 23-24.)

B. Plaintiff John Marotta’s Employment With Synthes

Defendant, John P. Marotta, applied to Synthes on April 1, 2004, without any background in the orthopedic medical device industry. (Id. ¶ 26.) On June 21, 2004, he accepted a position as a Sales Consultant in Synthes’s Trauma division, working in the Desert Valley region. (Id. ¶ 27.) Prior to commencing work, Marotta signed both the Non-Competition Agreement and Non-Disclosure Agreement, each dated June 25, 2004. (Id. ¶¶ 28-29.) At the same time, Marotta was given Synthes’s Employee Policy Manual and, later, the amended Employee Policy Manual. (Id. ¶ 30.)

At the start of Marotta’s employment, Synthes provided him with training concerning the trauma industry, product segment, human anatomy, the treatment of traumatic fractures, and the application of trauma products in the surgical environment. (Id. ¶ 31.) As a Sales Consultant in Arizona, Marotta received access to extensive customer information as well as substantial Synthes confidential information. (Id. ¶ 32.) He was [222] highly successful and highly compensated and, as a result, Synthes offered him a promotion to Regional Manager in 2007. (Id. ¶¶ 33-34.) On February 1, 2008, Marotta began his tenure as a Regional Manager, prior to which time he reviewed and executed a second Non-Competition Agreement. (Id. ¶¶ 35-36.) Upon becoming a Regional Manager in Colorado, Marotta’s responsibilities substantially increased, and he was responsible for identifying, developing, and implementing strategic territory expansion opportunities; evaluating and developing Sales Consultants’ individual business plans; and leading sales strategies and activities for all of Synthes’s new product introductions. (Id. ¶ 37.) Due to his good service, Marotta’s compensation increased progressively. (Id. ¶ 38.) In addition, he was enrolled at an MBA program, at Synthes’s expense, subject to his agreement to repay Synthes for those tuition costs in the event he left the company. (Id. ¶ 39.) Throughout his employment, Synthes entrusted Marotta with its most valuable customer contacts, goodwill, and business information, and introduced Marotta to existing and prospective customers in his regions. (Id. ¶ 40.) Further, it entrusted Marotta with information concerning, among other things, Synthes’s marketing and sales strategies, product performance and development, expansion plans, pricing terms, contract information, and sales information. (Id. ¶41.) Finally, Synthes provided Marotta with specialized training on the technical aspects of Synthes’s products. (Id. ¶ 42.)

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Synthes, Inc. v. Marotta, 281 F.R.D. 217, 2012 U.S. Dist. LEXIS 30137, 2012 WL 748758 (E.D. Pa. 2012).

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