Stryker Sues Biomet For Stealing Reps

Case 4:17-cv-00742 Document 1 Filed in TXSD on 03/08/17 Page 1 of 26
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS
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:
HOWMEDICA OSTEONICS CORP., a New :
Jersey Corporation and wholly owned subsidiary of :
STRYKER CORP., :
: COMPLAINT FOR INJUNCTIVE
Plaintiff, : RELIEF AND OTHER RELIEF
:
- against - :
:
BIOMET SOUTH TEXAS, INC., a Texas :
Corporation; ZIMMER U.S., INC. d/b/a ZIMMER :
BIOMET, a Delaware Corporation; and BIOMET :
ORTHOPEDICS, LLC, an Indiana Limited :
Liability Company, :
Defendants.
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Plaintiff HOWMEDICA OSTEONICS CORP., a wholly owned subsidiary of Stryker
Corporation (hereinafter Stryker), for its Complaint for Injunctive Relief and Other Relief
against Defendants BIOMET SOUTH TEXAS, INC. (Biomet South Texas); ZIMMER U.S.,
INC. d/b/a ZIMMER BIOMET (Zimmer Biomet); and BIOMET ORTHOPEDICS, LLC
(Biomet Orthopedics) (collectively, Defendants), states as follows:
NATURE OF THE ACTION
1. This action arises out of the concerted and deliberate unfair competition, improper
use of Strykers confidential and trade secret information, and improper solicitations of Strykers
customers and employees by Defendants in the Houston, Texas marketplace. Specifically,
Defendant Biomet South Texas, acting on behalf of Defendant Zimmer Biomet, solicited
multiple Stryker sales representatives operating in the Houston area to breach their employment
agreements with Stryker and its affiliates. Defendants solicited those employees in an effort to
set up a competing foot and ankle business targeting, amongst others, Houston-area podiatrists
and fellowship trained foot and ankle surgeons (collectively, the F&A Surgeons) who were
longstanding Stryker customers before Defendants improper acts. Toward that end, Defendants
specifically targeted several Stryker sales representatives in the Houston area and, in direct
contravention of Strykers employment agreements with those individuals, incentivized those
sales representatives to breach their non-compete and non-solicitation agreements with Stryker
by having them solicit the very same customers which they previously serviced as employees of
Stryker. The former Stryker employees whom Defendants solicited are now moving the business
of those Stryker customers to Defendants and utilizing Stryker confidential and trade secret
information.
2. Stryker brings this action to stop the unauthorized use of its confidential and
proprietary information, interference with its long-standing customer relationships, and the
systemic targeting and unlawful solicitation of Strykers workforce by Defendants.
3. Stryker is a global leader in the development, manufacture and sale of orthopaedic
implants, instruments, and other orthopaedic products and services, including its highly
successful Foot & Ankle business unit. Strykers sales representatives have access to and
knowledge of Strykers confidential and proprietary business informationincluding Strykers
information regarding its products, marketing, pricing, distribution and sales strategiesas well
as access to and knowledge of Strykers customer base.
4. Prior to performing their job responsibilities and duties for Stryker or any of its
affiliates, and as a condition of employment, Strykers sales representatives agree to certain
reasonable employment and post-employment obligations and restrictions. In particular,
Strykers sales representatives agree not to solicit Stryker customers which they service during
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their employment with Stryker for one year following the termination of their Stryker
employment, agree not to disclose Strykers or confidential information and trade secrets, and
agree that, during the course of their employment and for one year after the termination of their
employment with Stryker, they will not solicit Stryker employees to leave Strykers employ.
Defendants were well aware of these reasonable restrictions and post-employment obligations
yet chose to deliberately ignore them
5. Andrew Ruggles (Ruggles) and Carson Combs (Combs) worked closely
together as Stryker Foot & Ankle sales representatives in the Houston, Texas area. After their
separation from employment at Stryker, both Ruggles and Combs began working at Biomet
South Texas within a matter of weeks, selling competing foot and ankle products to their former
Stryker customers.
6. Upon information and belief, Defendants solicited Ruggles and Combs to breach
their Stryker agreements by working for Defendants selling competing foot and ankle products.
7. On several occasions beginning in December of 2016 and continuing through the
present, Ruggles and Combs met with and solicited the same F&A Surgeons whom they serviced
on behalf of Stryker, and attempted to convince those surgeons to purchase competing Zimmer
Biomet and/or Biomet Orthopedics foot and ankle products. Email communications with hospital
staff confirm Ruggles and Combs activities. All of Ruggles and Combs wrongful activity was
taken at the direction of Defendants. Additionally, Defendants attempted to cover up their
wrongful actions by assuring Stryker that it would have Ruggles and Combs abide by their
Stryker agreements while instructing them to do otherwise and, on at least one occasion,
instructed Ruggles to sign into outpatient surgical centers under the names of other Biomet South
Texas employees.
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8. When Stryker learned of the conduct of its former employees, it sent
correspondence to Ruggles and Combs reminding them of their contractual obligations. While
neither Ruggles nor Combs responded to Stryker, counsel for Defendants responded to Stryker
with assurances that Defendants would see to it that both Ruggles and Combs would abide by the
terms of their agreements with Stryker, and specifically the prohibition on soliciting their former
Stryker customers.
9. Defendants counsels assurances were a ruse. Defendants continued to instruct
and/or knowingly allowed Ruggles and Combs to breach their Stryker agreements and solicit the
F&A Surgeons whom they serviced on behalf of Stryker.
10. Defendants are conspiring with Ruggles and Combs to interfere with Strykers
customer relationships by setting up meetings with F&A Surgeons whom Ruggles and Combs
serviced on behalf of Stryker, and by directing Ruggles and Combs to solicit those F&A
Surgeons in order to move their business to Biomet.
11. Based on Defendants actions, Stryker has lost tens of thousands of dollars of
business in the last month of 2016 alone, and stands to lose hundreds of thousands of dollars of
business in 2017.
12. Stryker seeks damages arising out of (a) revenues lost to Defendants as a result of
Defendants wrongful conduct and (b) harm to Strykers goodwill and business reputation
through Defendants raiding of Strykers work force, Defendants unfair competition, and
Defendants interference with Strykers contracts and business relationships.
13. Defendants tortious conduct threatens Strykers long-standing customer
relationships and confidential information. An immediate and permanent injunction is required
to protect Strykers business, its customer relationships, its goodwill and its confidential and
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trade secret information, and to curtail the financial damage already caused by Defendants
actions.
PARTIES
14. Howmedica Osteonics Corp. is a wholly owned subsidiary of Stryker
Corporation, and is organized and existing under the laws of the State of New Jersey with its
principal place of business in Mahwah, New Jersey.
15. Biomet South Texas, Inc. is a corporation organized and existing under the laws
of the State of Texas, with its principal place of business in Houston, Texas.
16. Zimmer U.S., Inc. d/b/a Zimmer Biomet is a corporation organized and existing
under the laws of the State of Delaware, with its principal place of business in Warsaw, Indiana.
Zimmer Biomet is the manufacturer of medical devices distributed by Defendant Biomet South
Texas.
17. Biomet Orthopedics, LLC is a limited liability company organized and existing
under the laws of the State of Indiana, with its principal place of business in Warsaw, Indiana.
Biomet Orthopedics is the manufacturer of medical devices distributed by Defendant Biomet
South Texas.
JURISDICTION AND VENUE
18. This Court has original jurisdiction over this action under 28 U.S.C. 1332
because the parties are citizens of different states and the matter in controversy exceeds
$75,000.00 excluding interest and costs.
19. This Court has personal jurisdiction over the Defendants, and venue is proper in
this district under 28 U.S.C. 1391(b). Defendant Biomet South Texas resides is headquartered
and resides in this district, all Defendants committed tortious acts and conduct business within
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this district, and a substantial part of the events giving rise to Strykers claims occurred in this
district.
EVENTS GIVING RISE TO THIS ACTION
Strykers Business
20. Stryker invents, designs, manufactures and sells a full range of medical devices
and surgical products, including specifically foot and ankle surgical products. These products
make foot and ankle surgeries and recoveries simpler, faster and more effective. Strykers
portfolio of products, including, inter alia, plating systems, screw systems, implants,
intramedulary nails, external fixation products, and biologics, focuses on procedural and product
innovations.
21. The foot and ankle products industry is highly competitive. Strykers direct
competitors include Zimmer Biomet and Biomet Orthopedics. Defendant Biomet South Texas is
Defendants Zimmer Biomet and Biomet Orthopedics distributor covering the Houston, Texas
area. Defendant Biomet South Texas represents both Zimmer Biomet and Biomet Orthopedics.
Upon information and belief, Defendant Biomet South Texas requires its employees to sign
employment agreements which protect the confidential information and interests of Zimmer
Biomet and Biomet Orthopedics.
22. Although the foot and ankle implant industry is highly competitive, Stryker and
its products have broad appeal and acceptance in the marketplace and among the foot and ankle
podiatry and foot and ankle surgery communities. Stryker is dedicated to the continual
development of innovative technologies to help meet surgeons and patients needs.
23. To sell its products, Stryker relies heavily on its sales representatives and the
relationships they cultivate on Strykers behalf with the surgeons and hospitals in their respective
territories. Strykers sales representatives provide technical product information and
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specifications, coordinate training for surgeons utilizing its products, and are frequently present
during surgical procedures to provide technical assistance and knowledge to the surgeons and
medical staff. As a result, sales representatives become the face of Stryker to its customers.
24. Stryker dedicates a significant amount of time and resources cultivating its
customer relationships and creating goodwill amongst its customers by, among other things,
providing a high level of customer service and offering them continual training on Strykers state
of the art products.
25. Customers using Stryker products typically establish long-standing relationships
with Stryker based, in part, on the specific technical information and training required to utilize a
companys foot and ankle products and the familiarity that accompanies repeated use of specific
Stryker products.
26. For certain products and when contemplating a switch to a new product
manufacturerincluding external fixation products, used by many of Strykers foot and ankle
customersa surgeon must have training and a high level of comfort and familiarity with the
technical specifications and requirements of a new product. As a result, abrupt changes to
different manufacturers are uncommon after a relationship has been established.
Ruggles and Combs Employment with Stryker
27. Ruggles employment with Stryker began on or about March 1, 2011. At the time
of his hire, he was employed as an Extremity sales representative. On or about September 15,
2015, Ruggles was reassigned as a Specialist sales representative, and on or about January 1,
2016, Ruggles was reassigned as a Foot & Ankle Specialist sales representative for the South
Central Texas market, with an emphasis on the Houston, Texas area.
28. Combs employment with Stryker began on or about September 7, 2010. At the
time of his hire, he was employed as a Team Member in Strykers Warehouse/Loaners
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department. Combs was reassigned as a Specialist sales representative in 2013 and resigned from
Stryker on or about July 11, 2014. On or about July 18, 2016, Combs was rehired as a Foot &
Ankle sales representative for the South Central Texas market, with an emphasis on the Houston,
Texas area.
29. Stryker invested significant time and resources in training and developing
Ruggles and Combs as Foot & Ankle sales representatives. As a function of their positions,
Ruggles and Combs were given access to Strykers confidential and proprietary information,
including Strykers information regarding its products, marketing, pricing, distribution and sales
strategies. Stryker also entrusted Ruggles and Combs with Strykers highly valuable customer
relationships.
30. Throughout their employment with Stryker, Stryker entrusted Ruggles and Combs
with and provided them access to the F&A Surgeons performing foot and ankle procedures in
and around the Houston market.
31. Throughout their employment, Stryker introduced Ruggles and Combs to F&A
Surgeons and facilitated their ability to develop business relationships with such F&A Surgeons
on behalf of Stryker. Stryker likewise aided and assisted Ruggles and Combs exposure to and
development of, on Strykers behalf, further confidential information regarding these F&A
Surgeons.
32. At the time of their respective departures from Stryker, Ruggles and Combs were
responsible for maintaining Strykers relationship with a number of long-standing, well-
established and valuable customers. Strykers relationship with these customers generated
millions of dollars in annual gross revenue for Stryker.
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Ruggles Contractual Obligations Owed To Stryker
33. In consideration of his employment with Stryker, Ruggles executed both a
Confidentiality and Intellectual Property Agreement (the Ruggles Confidentiality Agreement)
and a Non-Competition and Non-Solicitation Agreement (the Ruggles Non-Competition
Agreement). A true and correct copy of the Ruggles Confidentiality Agreement, executed on
February 28, 2011, is attached to this Complaint as Exhibit A. Both the Ruggles Confidentiality
Agreement and Ruggles Non-Competition Agreement were between Stryker Corporation and
Ruggles, but included any subsidiary of Stryker Corporation, including Stryker, in the definition
of Employer. (Ruggles Confidentiality Agreement at 2.1; Ruggles Non-Competition
Agreement at 1.1).)
34. Based on the terms of the Ruggles Confidentiality Agreement and the Ruggles
Non-Competition Agreement, Ruggles received an offer of employment, continued employment,
access to and receipt of Strykers trade secrets and confidential information, and other
compensation and benefits, in exchange for his execution of those Agreements.
35. If Ruggles failed to execute either the Ruggles Confidentiality Agreement or the
Ruggles Non-Competition Agreement, his offer of employment would have been rescinded.
36. Ruggles agreed, both during the course of his employment with Stryker and
following termination of that employment, to maintain the confidentiality of Strykers
Confidential Information. (See Ruggles Confidentiality Agreement at p. 3, 5.1.)
37. Pursuant to the Ruggles Confidentiality Agreement, Confidential Information
includes:
[K]now-how, trade secrets, and technical, business and financial information and
any other non-public information in any way learned by [Ruggles] during [his]
employment with Stryker, including, but not limited to (a) prices, renewal dates
and other detailed terms of customer or supplier contracts and proposals; (b)
information concerning Strykers customers, clients, referral sources and vendors,
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and potential customers, clients, referral sources and vendors, including, but not
limited to, names of these entities or his employees or representatives,
preferences, needs or requirements, purchasing or sales histories, or other
customer or client-specific information; (c) supplier and distributor lists; (d)
pricing policies, methods of delivering services and products, and marketing and
sales plans or strategies; (e) products, product know-how, product technology
and product development strategies and plan; (f) employees, personnel or payroll
records or information; (g) forecasts, budgets and other non-public financial
information; (h) expansion plans, management policies and other business
strategies; (i) inventions, research, development, manufacturing, purchasing,
finance processes, technologies, machines, computer software, computer
hardware, automated systems, engineering, marketing, merchandising, and
selling.
(Ruggles Confidentiality Agreement at 2.2).
38. Ruggles further acknowledged that Strykers Confidential Information would be
supplied to him to assist him in his duties as a Stryker employee. (Id. at 1.2).
39. Ruggles agreed that, both during and after his employment with Stryker, he would
not disclose, use, disseminate, identify by topic or subject, lecture upon or publish [Strykers]
Confidential Information. (Id. at 5.1).
40. In addition, the Ruggles Confidentiality Agreement, which prohibits the
disclosure of Strykers confidential information, and the Ruggles Non-Competition Agreement
contain narrowly tailored post-employment restrictive covenants, which are designed to protect
Strykers goodwill, long-standing customer relationships and employee relationships, in addition
to its confidential information.
41. In the Ruggles Non-Competition Agreement, Ruggles agreed that:
During [his] employment with Stryker and for a period of twelve (12) months
after the termination of [his] employment with Stryker for any reason, [he would]
not work (as an employee, consultant, contractor, agent, or otherwise) for, or
render services directly or indirectly, any Conflicting Organization in which the
services [he] may provide could enhance the use or marketability of a Conflicting
Product or Service by application of Confidential Information which [he had]
access to during [his] employment.
(Ruggles Non-Competition Agreement at 4(a)).
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42. Under the terms of his Non-Competition Agreement, Ruggles restriction on
competition with Stryker was limited to the geographic area where he provided services on
behalf of Stryker in the twenty-four months prior to his termination. (Id. at 4(b)).
43. Ruggles further agreed that, during his employment and for a period of twelve
(12) months following the termination of his employment, he would not solicit, attempt to solicit,
induce or influence, or assist another to solicit, induce, or influence certain Stryker customers to
terminate their relationship with Stryker. (Id. at 3).
44. Ruggles also agreed that, during his employment and for a period of 12 months
thereafter, he would not solicit, induce or influence, or assist another to solicit, induce, or
influence any Stryker employee, agents, representatives, or independent contractors to alter or
terminate his, her, or its relationship with Stryker. (Id. at 5).
45. Moreover, Ruggles agreed that all of the obligations discussed above were
reasonable. (Ruggles Non-Competition Agreement at 12.2; Ruggles Confidentiality Agreement
at 6.5).
Combs Contractual Obligations Owed To Stryker
46. In consideration of his employment as a Stryker Foot & Ankle sales
representative, Combs executed a Confidentiality, Intellectual Property, Non-Competition and
Non-Solicitation Agreement (the Combs Agreement). A true and correct copy of the Combs
Agreement, executed on July 6, 2016, is attached to this Complaint as Exhibit C. As with
Ruggles Agreements, the Combs Agreement included any subsidiary of Stryker Corporation,
including Stryker, within the definition of Employer. (Combs Agreement at 2.1).
47. Based on the terms of the Combs Agreement, Combs received an offer of
employment as a Foot & Ankle sales representative, continued employment, access to and
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receipt of Strykers trade secrets and confidential information, and other compensation and
benefits, in exchange for his execution of the Combs Agreement.
48. Based on the terms of the Combs Agreement, Combs received continued
employment, access to and receipt of Strykers trade secrets and confidential information, and
access to Strykers customers, in exchange for his execution of the Combs Agreement.
49. If Combs had failed to execute the Combs Agreement he would not have been
hired as a Foot & Ankle sales representative.
50. The Combs Agreement defines such information that constitutes Confidential
Information as:
Know-how, trade secrets, and technical, business and financial information and
any other non-public information in any way learned by [Combs] during [his]
employment with Stryker, including, but not limited to (a) prices, renewal dates
and other detailed terms of customer or supplier contracts and proposals; (b)
information concerning Strykers customers, clients, referral sources and vendors,
and potential customers, clients, referral sources and vendors, including, but not
limited to, names of these entitles or their employees or representatives,
preferences, needs or requirements, purchasing or sales histories, or other
customer or client-specific information; (c) supplier and distributor lists; (d)
pricing policies, methods of delivering services and products, and marketing and
sales plans or strategies; (e) products, product know-how, product technology and
product development strategies and plans; (f) employees, personnel or payroll
records or information; (g) forecasts, budgets and other non-public financial
information; (h) expansion plans, management policies and other business
strategies; (i) inventions, research, development, manufacturing, purchasing,
finance processes, technologies, machines, computer software, computer
hardware, automated systems, engineering, marketing, merchandising, and
selling. Confidential Information shall not include information that is or becomes
part of the public domain, such that it is readily available to the public, through no
fault of [his].
(Combs Agreement at 2.2).
51. Combs Agreement states:
Confidential Information is of great value to Stryker, that Stryker has legitimate

business interests in protecting its Confidential Information, and that the
disclosure to anyone not authorized to receive such information, including any
entity that competes with Stryker, will cause immediate irreparable injury to
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Stryker. I understand and agree that my obligations not to disclose, use,

disseminate, identify by subject or topic, lecture upon or publish Confidential
Information shall continue after the termination of my employment for any
reason.
(Id. at 5.1).
52. In addition to prohibiting the disclosure of Strykers confidential information, the
Combs Agreement contains narrowly tailored post-employment restrictive covenants, which are
designed to protect Strykers goodwill, long-standing customer relationships and employee
relationships, in addition to its confidential information.
53. Specifically, Combs agreed that during the course of his employment with Stryker
and for one year after the termination of his employment for any reason, he would not:
[I]n any capacity, directly or indirectly, personally or through another person, (i)
solicit, contact or sell any Conflicting Product or Service to a Stryker Customer;
(ii) solicit, contact or sell any product or service to a Stryker Customer that
competes with or is similar to any Stryker product or service; (iii) divert, entice or
otherwise take away from Stryker the business or patronage of any Stryker
Customer; or (iv) solicit or induce any vendor, supplier or Stryker Customer to
terminate or reduce its relationship with Stryker.
(Id. at 6.2).
54. Conflicting Product or Service is defined within the Combs Agreement to
mean:
any product, process, technology, machine, invention or service of any person or

organization other than Stryker in existence or under development which
resembles, competes with or is intended to resemble or compete with a product,
process, technology, machine, invention or service upon which [Combs has]
worked or about which [he] was knowledgeable during the last twenty-four (24)
months of [his] employment with Stryker.
(Id. at 2.3).
55. Also contained within the Combs Agreement is a non-compete provision, which
states:
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During my employment with Stryker and for a period of twelve (12) months after
the termination of my employment with Stryker for any reason, I will not work
(as an employee, consultant, contractor, agent, or otherwise) for, or render
services directly or indirectly to, any Conflicting Organization in which the
services I may provide could enhance the use or marketability of a Conflicting
Product or Service by application of Confidential Information which I have had
access to during my employment.
(Id. at 6.3(a)).
56. The Combs Agreement defines a Conflicting Organization as any person or
organization which is engaged in or about to become engaged in research on, consulting
regarding, or development, production, marketing or selling of a Conflicting Product or Service
(as defined in Section 2.3 above). (Id. at 2.4).
57. Under the terms of the Combs Agreement, Combs restriction on competition
with Stryker was limited to the geographic area where he provided services on behalf of Stryker
in the twenty-four months prior to his termination. (Id. at 6.3 (c)).
58. By executing the Combs Agreement, Combs also agreed that it is
reasonable and necessary for the protection of the goodwill and continued
business of Stryker that [he] abide by the covenants and agreements contained in
th[e] Agreement during and following [his] employment with Stryker and that
Stryker will suffer irreparable injury, loss, harm and damage if [he] engage[s] in
conduct prohibited in [his] Agreement.
(Id. at 7.5).
Ruggles and Combs Employment at Stryker Terminates
59. On or about November 14, 2016, Ruggles employment with Stryker terminated.
60. Just four days after Ruggles Stryker employment terminated, on November 18,
2016, Combs notified Stryker that he was resigning, effective immediately.
61. Soon after the end of their respective employment at Stryker, Stryker received
information that Ruggles and Combs were working together for Defendant Biomet South Texas
together, using joint efforts to solicit their former Stryker customers in the Houston area.
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62. Defendant Biomet South Texas, at all times relevant to this matter, acted as the
authorized agent of both Defendant Zimmer Biomet and Defendant Biomet Orthopedics.
Defendant Biomet South Texas, on information and belief, employs other former Stryker sales
representatives, who are also participating in the tortious activities of Defendants.
63. Upon information and belief, Ruggles first became employed by Biomet South
Texas and then, acting on behalf of Defendants, solicited Combs to resign from Stryker and join
him at Biomet South Texas.
64. Pursuant to their Stryker Agreements, both Ruggles and Combs were obligated to
inform Stryker if they accepted employment at a competing business during the period of their
non-competition obligations. Neither Ruggles nor Combs ever provided Stryker with such
notice.
Defendants Interfere with and Solicit Strykers Customers
65. In early December 2016, Stryker discovered that Ruggles and Combs were
violating their Agreements with Stryker on behalf of Defendants by soliciting their former
Stryker customers to purchase competing Zimmer Biomet products.
66. Specifically, on or about December 12, 2016, Ruggles met with an F&A Surgeon
whom he formerly serviced for Stryker. During that meeting, Ruggles promoted the sale of
competing Zimmer Biomet products for several upcoming surgeries.
67. Also on December 12, 2016, Ruggles reached out to a purchasing coordinator at a
surgical center within his former Stryker sales territory. Ruggles attempted to set up an in-person
meeting to discuss setting up accounts to sell competing Zimmer Biomet products to F&A
surgeons operating at that facility.
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68. Ruggles copied Combs, at his new Biomet South Texas email address, on his
communications with the aforementioned purchasing coordinator.
69. On December 12, 2016, Ruggles reached out to a different F&A Surgeon whom
he formerly serviced on behalf of Stryker and attempted to solicit that F&A Surgeon to purchase
competing Zimmer Biomet products.
70. On December 29, 2016, Ruggles met with yet another F&A Surgeon whom he
formerly serviced on behalf of Stryker and attempted to solicit that F&A Surgeon to purchase
competing Zimmer Biomet products.
71. On January 4, 2017, Combs met with an F&A Surgeon whom he formerly
serviced on behalf of Stryker and attempted to solicit that F&A Surgeon to purchase competing
Zimmer Biomet products.
72. Throughout late December 2016 and January 2017, Stryker employees witnessed
Ruggles and Combs dropping off Zimmer Biomet products at surgical facilities within their
former Stryker sales territories. On at least one occasion, Ruggles signed into those surgical
centers under the name of another Biomet South Texas representative, in an effort to conceal his
actions from Stryker representatives.
73. In January of 2017, at least seven (7) different F&A Surgeons whom Ruggles and
Combs previously serviced on behalf of Stryker submitted purchase orders for competing
Zimmer Biomet products. During that same time frame, Stryker employees witnessed Ruggles
and Combs entering and leaving the surgical facilities where those F&A Surgeons perform
procedures.
74. After learning of their breaches of their Stryker contractual obligations, Stryker
sent correspondence to Ruggles and Combs demanding that they comply with the terms of their
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Stryker Agreements. Counsel for Defendants responded on January 20, 2017, stating that
Defendants intended to restrict Ruggles activities in the Houston area so that he would not be in
breach of his Stryker agreement.
75. Contrary to the representations in Defendants counsels letter, Defendants
continued to instruct Ruggles and Combs to violate their Stryker agreements.
76. On or about February 6, 2017, Stryker learned that one of Ruggles former
Stryker customers attempted to send him order forms for medical products purchased through
Cayenne Medical.
77. Cayenne Medical is a foot and ankle medical device manufacturer which was
recently acquired by Defendant Zimmer Biomet.
78. On February 15, 2017, Stryker sales representatives witnessed Combs entering
two separate Houston-area hospitals located in his former Stryker sales territory.
79. On February 15, 2017, Stryker discovered that several of the F&A Surgeons
serviced by Ruggles and Combs on behalf of Stryker submitted thousands of dollars worth of
purchase orders for competing Biomet products in a single day.
80. Upon information and belief, Ruggles and Combs are directing their former
Stryker customers to submit purchase orders through other sales representatives employed by
Defendants in an effort to conceal Defendants wrongful actions.
81. Stryker recently discovered that several other F&A Surgeons whom Ruggles and
Combs formerly serviced on behalf of Stryker are now purchasing and using competing Zimmer
Biomet products, purchased through Ruggles and Combs.
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82. On March 3, 2017, Stryker discovered that Ruggles, at Defendants direction, is
planning a joint open house with a Houston-area F&A Surgeon in an effort to divert yet more
of his former Stryker customers to Defendants.
The Effect of Defendants Conduct
83. With the departure of Ruggles and Combs and their knowledge of Strykers
confidential information as well as their improper solicitation and movement of Strykers
customers in the Houston market to Defendants, Stryker stands to lose several million dollars in
business and the loss of value of its goodwill, customer relationships, trade secrets and
confidential and proprietary information, which cannot be adequately addressed at law.
84. Defendants are tortiously interfering with Strykers contracts with its former
employees, raiding Strykers work force in the Houston area, unfairly competing against Stryker,
and interfering with its business relationships with both its longstanding and prospective
customers.
85. Defendants will have (and have gained) an unfair advantage in targeting Strykers
customers and developing marketing plans and strategies based on Strykers successes and
carefully cultivated, longstanding customer relationships.
86. Defendants activities have resulted in Stryker losing actual business exceeding
$75,000, and continuing to cost Stryker potentially millions of dollars.
87. All told, Defendants are causing, threatening, and/or will continue to cause or
threaten significant irreparable harm to Stryker, including the loss of value of confidential and/or
proprietary information, the loss of long-standing customer relationships, loss of goodwill, as
well as damage to Strykers reputation as an industry leader and its ability to successfully market
its goods and services. Money alone cannot make Stryker whole.
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COUNT I
TORTIOUS INTERFERENCE WITH CONTRACT
(All Defendants)
88. Stryker hereby repeats, realleges, and incorporates by reference the allegations
which are contained in Paragraphs 1 through 87.
89. At all relevant times, Ruggles and Combs were parties to Agreements with
Stryker which, inter alia, prohibited them from engaging or participating in any activity that is
directed to or designed to improperly solicit Strykers customers or employees.
90. At all relevant times, Ruggles and Combs were parties to Agreements with
Stryker which, inter alia, prohibited them from soliciting Strykers customers or prospective
customers and further prohibited them from using or disclosing Strykers confidential
information to third parties or on their own behalf.
91. At all relevant times, Defendants were aware, or should have been aware, of these
Agreements and Ruggles and Combs obligations thereunder.
92. Despite knowing about the Agreements, Defendants induced, instructed and/or
knowingly permitted Ruggles and Combs to solicit Strykers customers to stop doing business
with Stryker and begin doing business with Defendants.
93. Defendants were not justified in interfering with Ruggles or Combs Agreements
with Stryker.
94. As a direct and proximate cause of Defendants tortious interference with
Strykers contractual relationships with Ruggles and Combs, Stryker has been damaged in an
amount well in excess of $75,000.
95. Stryker has been irreparably injured and it continues to face irreparable injury.
Stryker is threatened with losing the value of its confidential and proprietary information and
19
certain customer relationships, along with income and goodwill, for which a remedy at law is
inadequate.
96. Accordingly, the Defendants must be enjoined and restrained by Order of this
Court.
97. In addition to a remedy at equity, Stryker seeks actual, incidental, compensatory,
punitive, exemplary and consequential damages.
COUNT II
TORTIOUS INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE:
STRYKERS CUSTOMERS
(All Defendants)
99. Until the events giving rise to this action, Stryker had reasonable prospective
economic advantages with its customers and/or prospective customers. Stryker reasonably
expected that these economic advantages would continue and would not be unjustifiably
disrupted.
100. Defendants were aware of these reasonable prospective economic advantages by
virtue of Ruggles and Combs employment with Stryker, as well as other former Stryker sales
representatives. Because Defendants are competitors of Stryker, they were and remain aware of
these reasonable prospective economic advantages.
101. Notwithstanding knowledge of the existence of these reasonable prospective
economic advantages, Defendants intentionally and unjustifiably interfered with Strykers
reasonable prospective economic advantages with its existing and/or prospective customers by
20
instructing, directing, and allowing Ruggles and Combs to violate their Stryker Agreements and
solicit those customers in order to move business to Defendants.
102. As a result of Defendants tortious interference with Strykers reasonable
prospective economic advantages with its customers and/or prospective customers, Stryker has
been damaged in an amount well in excess of $75,000.
certain reasonable prospective economic advantages, along with income and goodwill, for which
a remedy at law is inadequate.
Court. In addition to a remedy at equity, Stryker seeks actual, incidental, compensatory, punitive,
exemplary and consequential damages.
COUNT III
TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS: STRYKERS
CUSTOMERS
(All Defendants)
106. Until the events giving rise to this action, Stryker had longstanding business
relations with its customers, including the F&A Surgeons in the Houston area serviced by
Ruggles and Combs. Stryker reasonably expected that these business relations would continue
and would not be unjustifiably disrupted.
107. Defendants were aware of these longstanding business relations by virtue of
Ruggles and Combs employment at Stryker and their exposure to Strykers confidential
information regarding those business relations.
21
108. Defendants intentionally and unjustifiably interfered with Strykers business
relations with its customers by instructing, directing, and allowing Ruggles and Combs to violate
their Stryker Agreements and solicit Strykers longstanding customers in order to move their
business to Defendants.
109. As a result of Defendants tortious interference with Strykers business relations
with its customers and/or prospective customers, Stryker has been damaged in an amount well in
excess of $75,000.
certain business relations, along with income and goodwill, for which a remedy at law is
inadequate.
COUNT IV
UNFAIR COMPETITION
(All Defendants)
113. Defendants took the actions described above to gain an unfair competitive
advantage over Stryker.
114. Defendants willfully and maliciously took the actions described above and actions
to conceal their activities with full knowledge of and disregard for Strykers rights, and with the
intention of causing harm to Stryker for their own benefit.
22
115. As a result of Defendants actions, Defendants are unfairly competing in the foot
and ankle marketplace in Houston, Texas. Stryker has been damaged in an amount well in excess
of $75,000.
inadequate.
COUNT V
CORPORATE RAIDING
(All Defendants)
119. Defendants organized a scheme to raid Strykers employees as a means to
improperly and illegally acquire Strykers workforce, its customers and its goodwill, in order to
harm Stryker in the marketplace so that Defendants could unfairly compete against Stryker.
120. Defendants scheme, including solicitation of Strykers employees, was
undertaken with unlawful and improper purpose.
121. Defendants scheme, including solicitation of Strykers employees, occurred
through unlawful and improper means.
122. Until Defendants carried out their scheme, Stryker maintained valid relationships,
or the expectancy of relationships, with its customers and employees and maintained the
intellectual capital contained within its work force through training and experience. Stryker
23
reasonably expected that these relationships, its work force and its intellectual capital would
continue and would not be unjustifiably disrupted. Stryker has been damaged in an amount well
in excess of $75,000.
inadequate.
Court. In addition to a remedy at equity, Stryker seeks actual, incidental, compensatory,
punitive, exemplary and consequential damages.
PRAYER FOR RELIEF
WHEREFORE, Stryker seeks judgment in its favor and against Defendants that:
(a) Permanently enjoins Defendants and all parties in active concert or participation with
them, from using or disclosing any of Strykers confidential and/or proprietary information
utilized by or disclosed by Ruggles or Combs;
(b) Permanently enjoins Defendants from soliciting, incentivizing, or encouraging
Strykers former employees to participate in any employment activity which would breach
Strykers employment agreements with its former employees;
(c) Permanently enjoins Defendants and all parties in active concert or participation with
them, from contacting, soliciting, diverting, continuing to service any of Strykers customers
diverted from Stryker to Defendants and their affiliates directly or indirectly from the efforts of
Ruggles and Combs;
(d) Permanently enjoins Defendants from permitting or instructing Ruggles and Combs
and all parties in active concert or participation with them, from contacting, soliciting, diverting,
24
continuing to service any of Strykers customers with which Ruggles or Combs conducted
business or serviced on behalf of Stryker;
(e) Permanently enjoins Defendants from soliciting, inducing or influencing, or assisting
another to solicit, induce, or influence any Stryker employee, agents, representatives, or
independent contractors to alter or terminate his, her, or its relationship with Stryker;
(f) Awards Stryker actual, incidental, compensatory, exemplary, punitive and
consequential damages in an amount to be determined at trial;
(g) Awards Stryker its costs and expenses incurred herein, including reasonable
attorneys fees;
(h) Awards Stryker pre-judgment interest; and
(i) Awards Stryker any other legal or equitable relief just and appropriate under the
circumstances.
25
DATED: MARCH 8, 2017 Respectfully submitted,
HOWMEDICA OSTEONICS CORP.
By: /s/ Jesse M. Coleman_______

Jesse M. Coleman
Michael D. Wexler (to be admitted pro hac vice)

Kevin J. Mahoney (to be admitted pro hac vice)
SEYFARTH SHAW LLP
131 S. Dearborn Street, Suite 2400
Chicago, IL 60603
(312) 460-5000
mwexler@seyfarth.com
kmahoney@seyfarth.com
Jesse M. Coleman (S.D. Texas # 1101514) - Attorney in Charge

SEYFARTH SHAW LLP
700 Milam St., Ste. 1400
Houston, TX 77002
(713) 225-2300
jmcoleman@seyfarth.com
Attorneys for Howmedica Osteonics Corp.
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Case 4:17-cv-00742 Document 1 Filed in TXSD on 03/08/17 Page 1 of 26

UNITED STATES DISTRICT COURT

Plaintiff HOWMEDICA OSTEONICS CORP., a wholly owned subsidiary of Stryker

(Biomet Orthopedics) (collectively, Defendants), states as follows:

NATURE OF THE ACTION

customers and employees by Defendants in the Houston, Texas marketplace. Specifically,

contravention of Strykers employment agreements with those individuals, incentivized those

systemic targeting and unlawful solicitation of Strykers workforce by Defendants.

3. Stryker is a global leader in the development, manufacture and sale of orthopaedic

knowledge of Strykers confidential and proprietary business informationincluding Strykers

as access to and knowledge of Strykers customer base.

affiliates, and as a condition of employment, Strykers sales representatives agree to certain

reasonable employment and post-employment obligations and restrictions. In particular,

yet chose to deliberately ignore them

5. Andrew Ruggles (Ruggles) and Carson Combs (Combs) worked closely

7. On several occasions beginning in December of 2016 and continuing through the

taken at the direction of Defendants. Additionally, Defendants attempted to cover up their

8. When Stryker learned of the conduct of its former employees, it sent

9. Defendants counsels assurances were a ruse. Defendants continued to instruct

F&A Surgeons whom they serviced on behalf of Stryker.

Surgeons in order to move their business to Biomet.

Defendants interference with Strykers contracts and business relationships.

13. Defendants tortious conduct threatens Strykers long-standing customer

relationships and confidential information. An immediate and permanent injunction is required

14. Howmedica Osteonics Corp. is a wholly owned subsidiary of Stryker

principal place of business in Mahwah, New Jersey.

Biomet Orthopedics is the manufacturer of medical devices distributed by Defendant Biomet

JURISDICTION AND VENUE

$75,000.00 excluding interest and costs.

EVENTS GIVING RISE TO THIS ACTION

Biomet and Biomet Orthopedics.

development of innovative technologies to help meet surgeons and patients needs.

territories. Strykers sales representatives provide technical product information and

of the art products.

25. Customers using Stryker products typically establish long-standing relationships

technical specifications and requirements of a new product. As a result, abrupt changes to

different manufacturers are uncommon after a relationship has been established.

Ruggles and Combs Employment with Stryker

Central Texas market, with an emphasis on the Houston, Texas area.

time of his hire, he was employed as a Team Member in Strykers Warehouse/Loaners

and around the Houston market.

responsible for maintaining Strykers relationship with a number of long-standing, well-

millions of dollars in annual gross revenue for Stryker.

Ruggles Contractual Obligations Owed To Stryker

33. In consideration of his employment with Stryker, Ruggles executed both a

Confidentiality and Intellectual Property Agreement (the Ruggles Confidentiality Agreement)

and a Non-Competition and Non-Solicitation Agreement (the Ruggles Non-Competition

of Employer. (Ruggles Confidentiality Agreement at 2.1; Ruggles Non-Competition

Non-Competition Agreement, Ruggles received an offer of employment, continued employment,

compensation and benefits, in exchange for his execution of those Agreements.

following termination of that employment, to maintain the confidentiality of Strykers

Confidential Information. (See Ruggles Confidentiality Agreement at p. 3, 5.1.)

37. Pursuant to the Ruggles Confidentiality Agreement, Confidential Information

(Ruggles Confidentiality Agreement at 2.2).

38. Ruggles further acknowledged that Strykers Confidential Information would be

Confidential Information. (Id. at 5.1).

40. In addition, the Ruggles Confidentiality Agreement, which prohibits the

disclosure of Strykers confidential information, and the Ruggles Non-Competition Agreement

Strykers goodwill, long-standing customer relationships and employee relationships, in addition

to its confidential information.

41. In the Ruggles Non-Competition Agreement, Ruggles agreed that:

(Ruggles Non-Competition Agreement at 4(a)).

42. Under the terms of his Non-Competition Agreement, Ruggles restriction on