UnitedHealth trade secrets lawsuit against 2 former execs dismissed

A federal lawsuit from UnitedHealth Group was dismissed in May against two former executives, which alleged they stole and used confidential company information to create their own competing product for diabetes management.

"The Parties to the Arbitration and the Federal Lawsuit have settled all claims on mutually agreeable terms. Neither side acknowledges fault. The Parties have released their claims and agreed to go their separate ways," a UnitedHealth spokesperson told Becker's.

The lawsuit was filed Dec. 28 in a Minnesota federal court against Ken Ehlert, UnitedHealth’s former chief scientific officer, and Mark Pollmann, former chief technology officer at Optum Labs, who both departed the company in 2021. The suit claimed the two former employees took 500,000 emails and files on a UnitedHealth hard drive that held confidential information and trade secrets, including internal growth plans, board meeting minutes, contract negotiation details, financial statements and potential acquisition targets.

The defendants then allegedly created a group of corporate entities, including shell companies, using the confidential information. UnitedHealth claims the individuals violated the noncompete and confidentiality clauses of their employment contracts, including sharing, using and failing to return the company's confidential information. UnitedHealth also claimed the former employees purposefully "tried to cover their tracks" by erasing or altering incriminating information.

The relationship between the former executives and UnitedHealth dates to at least 2017, when they sold research and development company Savvysherpa to UnitedHealth for $46.8 million and became employees of the company. 

Mr. Ehlert and Mr. Pollmann sued UnitedHealth in 2022, alleging that when they were terminated, the company wanted them to sign separation agreements that would release them of their equity claims in Level2, a diabetes management platform they said was developed by Savvysherpa. The case closed in December 2022 and neither party disclosed the outcome of the case.

The December lawsuit detailed a tense relationship between UnitedHealth and the former executives, who while employed "acted with (a) reckless disregard for United's rights and the rights of others," according to the filing. The suit alleged Mr. Ehlert "created a 'culture of fear'" within his department and used demeaning language to describe senior leaders at UnitedHealth. In July 2021, Mr. Ehlert negotiated his exit from the company and asked for ownership of Level2, which UnitedHealth declined. 

"Thus, motivated by anger and a desire for revenge, Ehlert and Pollmann formed a plan to take United's confidential information and trade secrets and use them improperly for Lore Health's benefit," the lawsuit said.

Upon his departure from UnitedHealth in October 2021, Mr. Pollmann allegedly pressured a former subordinate to give him the hard drive containing confidential information, including "core information necessary to reboot Level2 as Lore Health outside of United." Confidential information was also allegedly shared with Scott Schneweis, former vice president of communications at Optum Labs, according to the suit. Mr. Ehlert and Mr. Pollmann then founded the corporate entities named in the lawsuit, including Health Stealth, Sequelae and Lore Health.

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