An interesting lawsuit has been filed in the United States District Court Eastern District of California.
The suit (ExamWorks v. Baldini et al), filed by ExamWorks, a prominent provider of California medical-legal physician evaluations, seeks damages and injunctive relief against several former Examworks employees in Northern California.
Those employees are alleged to have misappropriated trade secrets in violation of federal and state law, to have breached confidentiality under their employment agreements, and to have breached their fiduciary duties. Among other things, injunctive relief and compensatory and punitive damages are sought.
A pdf of the lawsuit can be found at the end of this post.
Although not named as defendants in the lawsuit, several prominent Northern California QMEs/QME groups copy service personnel are detailed in the body of the complaint as somehow involved in planning to set up a competitor service dubbed “Project Palo Alto”. Although not named as defendants, those mentioned in the body of the complaint include well-respected evaluator Dr. Steven Feinberg and IPM Group, a large group of treating physicians, some of whom do QME work.
Those physicians, many of whom I know and respect, may well have their own side of the story. In time we will understand more about how this saga developed.
Personnel departures and disputes over trade secrets often generate litigation. Silicon Valley is rife with these kinds of issues.
We have not seen much of this in the workers’ comp world, however.
The lawsuit comes at an inopportune time, as the DWC struggles to set forth a revised QME billing system, an issue which has vexed the QME world for some years.
In recent years there has been some interest by policymakers in taking a look at how QME aggregator groups (such as ExamWorks) affect QME costs, to better understand what role such groups play in the system, and whether they should be regulated.
So in a way, the ExamWorks lawsuit may end up further encouraging policymakers to take a detailed look at their operations.
The lawsuit also may raise some concerns about worker privacy, as the complaint details “an expansive database of information that contains not only the information related to doctor, finances, and pricing, but also detailed factual information on every case that ExamWorks has handled throughout the entire United States, including referral tracking and case status information”.
I expect that some applicant attorneys will want to get a much better understanding about that ExamWorks database and the privacy protections associated with it.
So this is a story which has implications beyond the intrigue of whether there were some faithless employees ready to rush into the arms of competitor groups.
Here is the complaint in ExamWorks v. Baldini:
ExamWorks v. Baldini, Girard et al. Complaint
Stay tuned.
Julius Young
510.835.8870