The Wall Street Journal reports that UnitedHealth Group has gone to court to stop one of its former executives, David W. Smith, from going to work for the new health care venture being started up by Amazon, Berkshire Hathaway and JPMorgan Chase.
Here’s how the Journal frames the story:
“The scope of the still-unnamed venture remains hazy beyond stated goals to improve health care and rein in costs for employees. But filings related to the case and court testimony offer some fresh clues about the closely watched effort, including that it may build its own solutions if what it needs isn’t available elsewhere.
“In court, the new hire at issue said the venture is focused on serving the three founding companies and isn’t competing with UnitedHealth’s Optum health-services unit to sell services or products. Court filings indicate the venture is examining third-party vendors’ products and combining them in ways to boost value for the founding companies.”
The story goes on: “Optum alleged in its lawsuit that Mr. Smith, who spent 2½ years working in Optum’s corporate strategy and product units before resigning last month, violated a noncompete agreement by joining the new venture. Optum also accused Mr. Smith of improperly accessing confidential documents before departing for the new venture, which filings referred to as ABC.
“Mr. Smith denied the allegations in court filings and court testimony, saying 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. Mr. Smith has asked the court to order arbitration.”
Here’s how the Journal frames the story:
“The scope of the still-unnamed venture remains hazy beyond stated goals to improve health care and rein in costs for employees. But filings related to the case and court testimony offer some fresh clues about the closely watched effort, including that it may build its own solutions if what it needs isn’t available elsewhere.
“In court, the new hire at issue said the venture is focused on serving the three founding companies and isn’t competing with UnitedHealth’s Optum health-services unit to sell services or products. Court filings indicate the venture is examining third-party vendors’ products and combining them in ways to boost value for the founding companies.”
The story goes on: “Optum alleged in its lawsuit that Mr. Smith, who spent 2½ years working in Optum’s corporate strategy and product units before resigning last month, violated a noncompete agreement by joining the new venture. Optum also accused Mr. Smith of improperly accessing confidential documents before departing for the new venture, which filings referred to as ABC.
“Mr. Smith denied the allegations in court filings and court testimony, saying 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. Mr. Smith has asked the court to order arbitration.”
- KC's View:
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This is all very complicated stuff, and I suppose the eventual legal decision will hinge not just on the existence of a non-compete clause, but the degree to which the Amazon-Berkshire Hathaway-JPMorgan Chase entity will be directly competitive based on information it shouldn’t have.
If I understand anything about the new business, it is that the goal is to challenge long-held assumptions and delivery systems. I suppose this requires historical knowledge and context, but also the willingness to disrupt.
One thought … is it possible that the lawsuit exists mostly to smoke out details about the Amazon-Berkshire Hathaway-JPMorgan Chase venture that have not yet been made public? Just wondering. I’m getting cynical in my old age.
