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Case 4:17-cv-00742

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS

-------------------------------------------------------------- x

 

:

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.

-------------------------------------------------------------- x

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 Stryker’s confidential and trade secret information, and improper solicitations of Stryker’s

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

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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 Stryker’s 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 Stryker’s 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. Stryker’s sales representatives have access to and

knowledge of Stryker’s confidential and proprietary business information—including Stryker’s

information regarding its products, marketing, pricing, distribution and sales strategies—as well

as access to and knowledge of Stryker’s customer base.

4. Prior to performing their job responsibilities and duties for Stryker or any of its

affiliates, and as a condition of employment, Stryker’s sales representatives agree to certain

reasonable

employment

and

post-employment

obligations

and

restrictions.

In

particular,

Stryker’s sales representatives agree not to solicit Stryker customers which they service during

2

their

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employment

with

Stryker

for

one

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year

following

the

termination

of

their

Stryker

employment, agree not to disclose Stryker’s 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 Stryker’s 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

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learned

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the

conduct

of

its

former

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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’ counsel’s 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 Stryker’s

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 Stryker’s goodwill and business reputation

through Defendants’ raiding of Stryker’s work force, Defendants’ unfair competition, and

Defendants’ interference with Stryker’s contracts and business relationships.

13. Defendants’

tortious

conduct

threatens

Stryker’s

long-standing

customer

relationships and confidential information.

An immediate and permanent injunction is required

to protect Stryker’s 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.

14. Howmedica

Osteonics

PARTIES

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 Stryker’s claims occurred in this

district.

EVENTS GIVING RISE TO THIS ACTION

Stryker’s 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.

Stryker’s

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. Stryker’s 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 Stryker’s behalf with the surgeons and hospitals in their respective

territories.

Stryker’s

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 Stryker’s 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

company’s 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

manufacturer—including external fixation products, used by many of Stryker’s foot and ankle

customers—a 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 Stryker’s 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 Stryker’s confidential and proprietary information,

including Stryker’s information regarding its products, marketing, pricing, distribution and sales

strategies. Stryker also entrusted Ruggles and Combs with Stryker’s 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 Stryker’s 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 Stryker’s relationship with a number of long-standing, well-

established and valuable customers. Stryker’s 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 §

Agreement at § 1.1).)

2.1; Ruggles Non-Competition

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 Stryker’s

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

Stryker’s

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 Stryker’s 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 Stryker’s 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 [Stryker’s]

Confidential Information.” (Id. at § 5.1).

40.

In

addition,

the

Ruggles

Confidentiality

Agreement,

which

prohibits

the

disclosure of Stryker’s confidential information, and the Ruggles Non-Competition Agreement

contain narrowly tailored post-employment restrictive covenants, which are designed to protect

Stryker’s 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 Stryker’s 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 Stryker’s trade secrets and confidential information, and

access to Stryker’s 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 Stryker’s 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 Stryker’s confidential information, the

Combs Agreement contains narrowly tailored post-employment restrictive covenants, which are

designed to protect Stryker’s 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 Stryker’s 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’ counsel’s

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 Stryker’s

confidential information as well as their improper solicitation and movement of Stryker’s

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 Stryker’s contracts with its former

employees, raiding Stryker’s 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 Stryker’s

customers and developing marketing plans and strategies based on Stryker’s 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 Stryker’s 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 Stryker’s customers or employees.

90. At all relevant times, Ruggles and Combs were parties to Agreements with

Stryker which, inter alia, prohibited them from soliciting Stryker’s customers or prospective

customers

and

further

prohibited

them

from

using

or

disclosing

information to third parties or on their own behalf.

Stryker’s

confidential

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 Stryker’s 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

Stryker’s 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

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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:

STRYKER’S CUSTOMERS (All Defendants)

98. Stryker hereby repeats, realleges, and incorporates by reference the allegations

which are contained in Paragraphs 1 through 87.

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 Stryker’s

reasonable prospective economic advantages with its existing and/or prospective customers by

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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

Stryker’s

reasonable

prospective economic advantages with its customers and/or prospective customers, Stryker has

been damaged in an amount well in excess of $75,000.

103. 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

certain reasonable prospective economic advantages, along with income and goodwill, for which

a remedy at law is inadequate.

104. Accordingly, the Defendants must be enjoined and restrained by Order of this

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: STRYKER’S CUSTOMERS (All Defendants)

105. Stryker hereby repeats, realleges, and incorporates by reference the allegations

which are contained in Paragraphs 1 through 87.

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 Stryker’s confidential

information regarding those business relations.

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108. Defendants intentionally and unjustifiably interfered with Stryker’s business

relations with its customers by instructing, directing, and allowing Ruggles and Combs to violate

their Stryker Agreements and solicit Stryker’s longstanding customers in order to move their

business to Defendants.

109. As a result of Defendants’ tortious interference with Stryker’s business relations

with its customers and/or prospective customers, Stryker has been damaged in an amount well in

excess of $75,000.

110. 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

certain business relations, along with income and goodwill, for which a remedy at law is

inadequate.

111. Accordingly, the Defendants must be enjoined and restrained by Order of this

Court. In addition to a remedy at equity, Stryker seeks actual, incidental, compensatory, punitive,

exemplary and consequential damages.

COUNT IV UNFAIR COMPETITION (All Defendants)

112. Stryker hereby repeats, realleges, and incorporates by reference the allegations

which are contained in Paragraphs 1 through 87.

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 Stryker’s rights, and with the

intention of causing harm to Stryker for their own benefit.

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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.

116. 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

certain customer relationships, along with income and goodwill, for which a remedy at law is

inadequate.

117. Accordingly, the Defendants must be enjoined and restrained by Order of this

Court. In addition to a remedy at equity, Stryker seeks actual, incidental, compensatory, punitive,

exemplary and consequential damages.

COUNT V CORPORATE RAIDING (All Defendants)

118. Stryker hereby repeats, realleges, and incorporates by reference the allegations

which are contained in Paragraphs 1 through 87.

119. Defendants organized a scheme to raid Stryker’s employees as a means to

improperly and illegally acquire Stryker’s 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

undertaken with unlawful and improper purpose.

solicitation

of

Stryker’s

employees,

was

121. Defendants’ scheme, including solicitation of Stryker’s 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

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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.

123. 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

certain customer relationships, along with income and goodwill, for which a remedy at law is

inadequate.

124. Accordingly, the Defendants must be enjoined and restrained by Order of this

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 Stryker’s confidential and/or proprietary information

utilized by or disclosed by Ruggles or Combs;

(b)

Permanently enjoins

Defendants

from

soliciting,

incentivizing,

or

encouraging

Stryker’s former employees to participate in any employment activity which would breach

Stryker’s 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 Stryker’s 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,

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continuing to service any of Stryker’s 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

attorneys’ fees;

Stryker

its

costs

and

expenses

incurred

herein,

(h) Awards Stryker pre-judgment interest; and

including

reasonable

(i) Awards Stryker any other legal or equitable relief just and appropriate under the

circumstances.

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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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