United HealthCare Services, Inc. v. Louro

CourtDistrict Court, D. Minnesota
DecidedFebruary 12, 2021
Docket0:20-cv-02696
StatusUnknown

This text of United HealthCare Services, Inc. v. Louro (United HealthCare Services, Inc. v. Louro) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United HealthCare Services, Inc. v. Louro, (mnd 2021).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

UNITED HEALTHCARE SERVICES, INC. Civil No. 20-2696 (JRT/ECW) and UNITEDHEALTH GROUP, INC.,

Plaintiff, MEMORANDUM OPINION AND ORDER DENYING PRELIMINARY v. INJUNCTION

CARLOS LOURO, Defendant.

Jenny Gassman-Pines and Anna Tobin, GREENE ESPEL PLLP, 222 South Ninth Street, Suite 2200, Minneapolis, MN 55402, for plaintiffs.

Joel P. Schroeder and Katherine S. Barrett Wiik, BEST & FLANAGAN LLP, 60 South Sixth Street, Suite 2700, Minneapolis, MN 55402, for defendant.

Plaintiffs, United HealthCare Services, Inc. and UnitedHealth Group, Inc. filed a Motion for Preliminary Injunction against former employee, Defendant Carlos Louro, seeking to enjoin Louro from (1) assuming his planned role at competitor Anthem, Inc. or any other role that breaches the restrictive covenants in his stock options and restricted stock unit agreements for a period of twelve months; and (2) using or disclosing Plaintiffs’ trade secrets or confidential information. Because the Court finds that Plaintiffs have not demonstrated a likelihood of success on the merits or irreparable harm and because the balance of harms favors Louro,

the Court will deny Plaintiffs’ motion.

BACKGROUND I. THE PARTIES Plaintiff UnitedHealth Group, Inc. (“UHG”) is a Delaware corporation with its principal place of business in Minnesota. (Compl. ¶ 6, Dec. 30, 2020, Docket No. 1.) UHG

is a diversified health care company that offers health care coverage as well as information and technology-enabled health services through its affiliated companies. (Id. ¶ 9.) Plaintiff United HealthCare Services, Inc. (“United”) is an affiliate and wholly owned subsidiary of UHG and a Minnesota corporation with its principal place of business in

Minnesota. (Id. ¶ 6.) United is UHG’s health care benefits business, offering a wide range of health care coverage for individuals, employers, and government-subsidized beneficiaries. (Id. ¶ 9.)

At United, responsibility for underwriting and pricing models is divided into different business segments, which include: National Accounts (accounts that primarily service 3,000 or more lives); Local Markets (public-sector and regional-based accounts); Key Accounts (less than 3,000 lives), and “other markets.”. (Id. ¶¶ 12–15.) Defendant Carlos Louro began working for United in December 2005 and for most of his tenure he managed underwriting in National Accounts. (Compl. ¶ 19.) Louro

worked from Connecticut but maintained close contact with members of his team and United’s actuarial team in Minnesota and regularly traveled to Minnesota to fulfill his job duties. (Compl. ¶¶ 20–21.) In February 2019, Louro was promoted to Vice President of Underwriting in the National Accounts segment, which gave him responsibility for

business pricing for United’s national accounts, overseeing the Aon/Hewitt Health Exchange, and specialty businesses. (Compl. ¶ 25.) Louro was also elected to United’s National Accounts Leadership Council, a high-level strategy group that addressed issues

across United’s national accounts systems. (Compl. ¶ 29.) II. THE AGREEMENTS

At multiple points in Louro’s employment at United, he was rewarded with UHG stock options and restricted stock units via documented contracts (“Option Awards” and “RSU Awards,” collectively the “Agreements”), which contained restrictive covenants for the benefit of UHG and United. (Compl. ¶¶ 30–33; Decl. of Albert A. Martino (“Martino

Decl.”) ¶ 29, Ex. A (“Option Award”) § 4, Dec. 30, 2020, Docket No. 7-1; Martino Decl. ¶ 29, Ex. B (“RSU Award”) § 8, Dec. 30, 2020, Docket No. 7-1.) A. Confidentiality Clauses The Agreements prohibit Louro from “disclos[ing] or us[ing] Confidential

Information, either during or after [Louro’s] employment with the Company, except as necessary to perform [Louro’s] duties or as the Company may consent in writing.” (Option Award § 4(a); RSU Award § 8(a).) Examples of confidential information include:

inventions; new product or marketing plans; business strategies and plans; merger and acquisition targets; financial and pricing information; computer programs, source codes, models and databases; analytical models; customer lists and information; and supplier and vendor lists and other information which is not generally available to the public.

(Option Award § 4(a); RSU Award § 8(a).) B. Non-Competition Clauses The Agreements also restrict Louro from “[e]ngag[ing] in or participat[ing] in any

activity that competes, directly or indirectly, with any Company activity, product, or service that [Louro] engaged in, participated in, or had Confidential Information about during [Louro’s] last 36 months of employment with the Company” or assist anyone in any of those activities for one year after Louro’s termination of employment. (Option

Award § 4(c); RSU Award § 8(c).) C. Scope The restrictive covenants “apply on a nationwide basis anywhere in the United States.” (Option Award § 4(d); RSU Award § 8(d).).

D. Choice of Law The most recent RSU Award and Option Award include a Delaware choice-of-law clause, (see, e.g., RSU Award § 11(h)); prior Agreements Louro executed contain

Minnesota choice-of-law clauses, (Compl. ¶ 37 n.1). E. Injunctive Relief The Agreements also state that: “[Louro] agrees that (a) legal remedies (money damages) for any breach of the Restrictive Covenants. . . will be inadequate, (b) the

Company will suffer immediate and irreparable harm from any such breach, and (c) the Company will be entitled to injunctive relief from a court in addition to any legal remedies the Company may seek in arbitration.” (Option Award § 12; see also RSU Award § 11(f).)

F. Forfeiture Both Agreements provide that Louro forfeits all or a portion of the restricted stock units or shares of common stock and may be required to repay United and UHG for the value realized if he violates the restrictive covenants in the Agreements. (Option Award

§ 3; RSU Award § 7.) The forfeiture clauses also allow the Company to pursue other legal or equitable remedies for violations of the Restrictive Covenants. (Option Award § 3; RSU Award § 7.)

III. LOURO’S EMPLOYMENT Louro has accepted a position at Anthem, a United competitor, as Vice President of Local Accounts Underwriting. (Decl. of Carlos Louro (“Louro Decl.”) ¶¶ 16, 18, 21, Jan.

21, 2021, Docket No. 25.) Prior to interviewing with Anthem, Louro affirmatively disclosed that he had a non-compete with United and provided Anthem a copy of the non-compete language on September 30, 2020. (Id. ¶ 19.) Anthem analyzed Louro’s non-

compete agreement to determine first if it could hire him and then if it could structure a position for Louro that would honor the non-compete and avoid overlap with the business segments Louro worked in at United, including National Accounts, the Aon/Hewitt Exchange, Specialty, and Public Sector. (Id. ¶ 20; Decl. of Andrea Schell (“Schell Decl.”)

¶¶ 6–7, Jan. 21, 2021, Docket No. 26.) Anthem structured a position for Louro in Anthem’s Local Accounts segment—which services accounts up to 3,000 lives and is a corollary to United’s Key Accounts segment—so that Louro would not provide any

services for or rely on any confidential information related to Anthem’s National Accounts (3,000+ lives). (Schell Decl. ¶ 7.) Louro resigned from United on December 3, 2020 and disclosed to his boss, Albert Martino, that he had accepted an underwriting role at Anthem in Local Accounts. (Louro

Decl. ¶ 22.) United’s in-house counsel, Nora Kaitfors, sent a letter to Louro on December 7, 2020 reminding him of the restrictive covenants and expressing concern that the new job placed him in a position to use United’s confidential information. (Decl. of Joel P. Schroeder (“Schroeder Decl.”) ¶ 6, Ex. 5 at 46–47, Jan. 21, 2021, Docket No.

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