Amazon’s joint venture with Berkshire Hathaway and JPMorgan Chase is just getting started, but it’s already rattling health care giants.
Earlier this month, UnitedHealth Group filed a lawsuit against a former executive who left its Optum unit for the joint venture, nicknamed ABC.
The suit alleges that David Smith attended strategy meetings, asked colleagues about sensitive information unrelated to his role, and printed out confidential documents while he was interviewing for the new gig. The Massachusetts District Court lawsuit was first reported by Stat.
UnitedHealth is attempting to prevent Smith from working at ABC, which is headed by author and physician Atul Gawande, CNBC reported. Smith first contacted Gawande last summer, was approached by a recruiter in October and received an offer in December. Smith intended to finish out the year with Optum, but was escorted from the building two days after informing the company that he had accepted the offer.
Smith was VP of product at Optum and has taken on the role of director of product strategy and research at ABC, according to the lawsuit.
In a response to the suit, lawyers for Smith said that he hadn’t violated his non-compete because ABC doesn’t currently offer any services or seek a profit.
“The crux of a non-compete restriction is actual competition. Here, there is none,” they wrote. They also argued that UnitedHealth’s non-compete was “unenforceable” due to the breadth of its scope.
Non-compete agreements are contentious in the tech industry, with some arguing that it stifles the ability for workers to move freely to new jobs and others arguing that they protect key intellectual property.
In Washington state, Amazon sued a former executive who jumped to Bellevue-based Smartsheet last year. The matter was later settled.