A federal court in New York has denied Medtronic a preliminary injunction in its non-compete-agreement lawsuit against former Medicrea CEO Joseph Walland.
Judge Edgardo Ramos of the U.S. District Court of Southern New York, in a Sept. 10 order, ruled that the agreement between Walland and Medtronic was covered by the law in California, where Walland has resided the majority of the time in recent years, and not New York.
Under California law, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void,” Ramos wrote.
“An injunction would impose a hardship on Walland because it would bar him from his current employment, and given Medicrea’s nationwide market, he would likely be barred from working anywhere else in the country that overlaps with his specialty,” Ramos said. “Further, if enjoined, Walland will be deprived of the benefits of California law — specifically, its prohibition on anti-competitive restraints. By contrast, absent an injunction, plaintiffs may lose some business and customers, but as noted, there has been no evidence yet of such a loss.”
Walland entered into an employment agreement when Medicrea promoted him to CEO in July 2018, according to Ramos’ recounting the facts of the case. Walland voluntarily left the spinal surgery tech company in December 2020, about a month after Medtronic (NYSE:MDT) completed its acquisition of Medicrea.
Within weeks of leaving Medicrea, Walland started a job as VP for sales at Alphatec Spine. While Alphatec was negotiating its acquisition of EOS imaging earlier this year, two emails related to the negotiation came into Walland’s old Medicrea account — and the emails included information that a Medicrea official deemed to be confidential Medicrea information, according to Ramos, who said the official did not elaborate about the information.
Within days, Medtronic sued Walland.