A couple of weeks ago, I briefly mentioned how Dr. Franklin Cockerill, former chairman of the Mayo Clinic Department of Laboratory Medicine and Pathology (DLMP) and chief of Mayo Medical Laboratories (MML), started his new job as vice president and Chief Laboratory Officer of Quest Diagnostics on October 1, 2014. On October 14, 2014, the Mayo Clinic filed a civil lawsuit against Dr. Cockerill that alleges, among other things, misappropriation of trade secrets.
Facts/Allegations
The complaint provides a synopsis of Dr. Cockerill’s “critical” role as chairman of the DLMP, which is acknowledged as “one of the most important departments” at the Mayo Clinic, and as the head of MML. As a result, Dr. Cockerill gained:
…intimate first-hand knowledge of MML’s and DLMP’s most sensitive confidential information concerning short-term and long-term business, marketing, sales, pricing and data management strategies, as well as market assessments and analysis, competitive analysis, test development and launch plans, and related patent protection and litigation analysis.
Dr. Cockerill also:
…has detailed knowledge of tests that MML and DLMP have developed and abandoned and/or not developed, those that have good profit margins and those that don’t…
and
…confidential information about essentially every strategic decision that MML and DLMP has made for the past seven or more years and about every strategic decision facing MML and DLMP in the immediate future.
The complaint then goes on to highlight the Business Confidentiality Policy and Code of Conduct all Mayo Clinic employees are required to follow. These documents contain a definition of, and a mandate to protect, Mayo’s Confidential Business Information.
Dr. Franklin Cockerill (Mayo Medical Labs)
It also discusses the Intellectual Property Agreement Dr. Cockerill signed as well as the fact all Mayo employees who receive patent and litigation analyses are told that information is confidential and protected by attorney-client privilege.
Furthermore, Dr. Cockerill was required to disclose any conflicts of interest (potential and real), and, as a director and officer, be honest in all aspects of his work at Mayo.
The complaint then goes on to describe a meeting Dr. Cockerill called on July 17, 2014 where he “tearfully” informed members of the DLMP and MML that he was retiring from Mayo to help his 85-year-old mother with the family fertilizer business in Nebraska. Dr. Cockerill then sent a written announcement of his September 30, 2014 retirement to the DLMP and MML in which he again stated he would be working at his family business in Nebraska.
Mayo alleges, however, that Dr. Cockerill actually began pursuing the position of vice president and Chief Laboratory Officer at Quest, the job description for which Mayo claims is nearly identical to Dr. Cockerill’s position with MML, in February 2014.
On March 18th and 19th, Mayo claims Dr. Cockerill participated in phone interviews with Quest and by April, he was the top candidate for the position.
On May 7th, Dr. Cockerill told Mayo he needed to travel to New Jersey to help his mother with a business problem when in fact he was going to New Jersey for an in-person interview at Quest’s headquarters. Dr. Cockerill also returned to Quest’s New Jersey offices for additional interviews on June 16th and 17th, which caused him to miss an “important business meeting” in Rochester.
Mayo alleges the trips to New Jersey were paid for by Quest, and this was contrary to Dr. Cockerill’s fiduciary duties to Mayo.
Dr. Cockerill apparently accepted the Quest position at the end of June, but despite this fact, continued to participate in “highly confidential operations of Mayo and MML.”
The complaint then goes on to describe how Dr. Cockerill told the Mayo Personnel Committee in July that he was retiring to work at his family business and approved a Mayo press release in August that falsely stated he was retiring.
It was not until his last week at Mayo that Dr. Cockerill started to tell a couple of people here and there that his retirement announcement led to recruitment efforts from the “industry”, but he apparently refused to go into any detail.
Finally, on September 30th, Dr. Cockerill informed Mayo CEO Dr. John Noseworthy he was going to start working for Quest the following day. Dr. Noseworthy apparently asked how he (Cockerill) thought he could work for such a direct competitor of Mayo.
Mayo believes Dr. Cockerill took with him seven Mayo-owned USB memory drives, four of which contained information that was downloaded from Dr. Cockerill’s computer days before he left to work for Quest.
Mayo also has emails between Dr. Cockerill and Quest CEO Steve Rusckowski from August 2014 (when he was still employed by Mayo) in which he “advis[es] and direct[s]” Mr. Rusckowski “on a clandestine basis.”
The complaint states it will be “impossible” for Dr. Cockerill to perform his duties at Quest, which are essentially identical to what he was doing at MML, without “using or disclosing MML’s and Mayo’s confidential information and trade secrets” and that this would “irreparably harm” MML and Mayo, and would allow Quest to unfairly compete with Mayo and MML.
Counts
- Breach of fiduciary duty as director and officer
- Breach of duty of loyalty as employee
- Breach of contract
- Misappropriation of trade secrets
Relief Sought
- Damages and/or restitution
- Enjoin Dr. Cockerill from using and disclosing Mayo’s confidential information and trade secrets
- Compel Dr. Cockerill to return all of Mayo’s confidential, proprietary or trade secret information
- Enjoin Dr. Cockerill from competing by working for Quest, having any contact with anyone from Quest, or soliciting Mayo or MML employees to work for Quest
- Exemplary damages
- Disgorge payments Dr. Cockerill received while breaching his duty of loyalty to Mayo
- Court costs, disbursements and attorney fees
- Pre-judgment and post-judgement interest
Mayo asked for a temporary restraining order (TRO) to “protect its trade secrets and confidential information and to prevent further violations” and argued if the TRO is not granted, it will suffer irreparable harm.
The judge stated Mayo, based on the evidence presented to the court, would indeed suffer irreparable harm if the TRO were not granted, and in addition, is likely to succeed on the merits of its claims.
He then granted the TRO the day after the complaint was filed, and ordered Dr. Cockerill to:
- Preserve all documents and electronic information that pertain to the case
- Return to Mayo all confidential, proprietary and/or trade secret information in his possession, custody or control
- Restrain from using, disclosing, or transmitting any of Mayo’s confidential, proprietary or trade secret information
- Provide to Mayo all computers, mobile devices, smartphones, tablets and electronic storage media he has used since February 10, 2014, so that Mayo can perform forensic examinations
In addition, Dr. Cockerill is not allowed to work for Quest or have any contact with anyone from Quest until after a hearing is held.
Mayo speaks out
I reached out to the Media Relations Office at Mayo, and a representative was kind enough to provide me with the following comment about the suit:
Mayo Clinic has commenced legal action against Dr. Franklin Cockerill, who left his roles as president & CEO of Mayo Medical Laboratories for a leadership position with a direct competitor. Our leaders must maintain their fiduciary responsibility to our organization by protecting confidential information, trade secrets, and intellectual property. By failing to disclose his conflict-of-interest, Dr. Cockerill’s actions were in violation of Mayo Clinic conflict-of-interest/compliance policies that all staff members agree to on an annual basis, and have put at risk the business strategy of Mayo Medical Laboratories.
We do not take this action lightly. Dr. Cockerill was a valued Mayo Clinic clinician, leader and colleague. We will vigorously defend and protect our intellectual property to ensure we can continue to meet our charitable mission.
I contacted Quest Diagnostics for comment as well, but I never heard back. If I do, I will update the post.
Many thanks to the representative of the Media Relations Office at Mayo who also provided me with the complaint and TRO order.
