Mayo Clinic sues former exec for transferring trade secrets to Quest Diagnostics

Dr. Franklin Cockerill III

Minnesota's Mayo Clinic is suing one of its former top executives for misappropriation of trade secrets as part of a plan to work for competitor Quest Diagnostics ($DGX) following a false retirement.

In July, Dr. Franklin R. Cockerill III, tearfully informed colleagues that he was retiring from Mayo Clinic, where he was the CEO of Mayo Medical Laboratories. But the Oct. 14 lawsuit filed in Olmsted County District Court says that on Oct. 1, the day after his retirement, Cockerill instead traveled to New Jersey to work for Quest.

If true, the lawsuit could be damaging to the industry bigwig. According to the document, for months before his retirement, Cockerill provided clandestine advice to Quest officials, including CEO Steve Rusckowski. In addition to Cockerill, the suit was filed "against as yet unnamed joint tortfeasors and/or co-conspirators with Dr. Cockerill. To the extent it is determined that any such individual entities have breached their duties and or conspired, aided or abetted Dr. Cockerill, then they will be added as named defendants to be jointly and severally liable to plaintiffs," it says.

Quest did not respond to a request for comment by the time of publication.

The suit also says that Cockerill took at least 7 Mayo-owned USB drives and used four of them to download information from his computer prior to starting work at Quest. In addition, the suit claims that Cockerill accepted the position at Quest in June but did not inform Mayo Clinic, where he continued to work and attend company meetings.

"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," said Mayo Clinic in an emailed statement.

But Minneapolis attorney Nancy Brostrom Vollertsen of law firm Lindquist & Vennum said her client "is disappointed that the Mayo Clinic has made such allegations and publicized its unproven claims in the media."

"He opted for early retirement at the Mayo Clinic's invitation and is not subject to any non-compete or other agreement that would limit his activities after leaving Mayo," she said, according to local news outlet PostBulletin.com of Rochester, MN.

The situation continues to unfold. On Wednesday, the day after the lawsuit was filed, the district judge granted a temporary restraining order against Cockerill that prohibits him from working or having any contact with Quest, and orders him to return to all confidential information to the Mayo Clinic and Mayo Medical Laboratories.

"It appears that Dr. Cockerill engaged in deception in order to hide his relationship with Quest from Plaintiffs," the court decision states.

Mayo Medical Laboratories is a limited liability company. The global reference laboratory says it offers more than 3,000 tests and facilitates collaboration between healthcare institutions and Mayo Clinic physicians and laboratory professionals.

- read the PostBulletin.com coverage here and here

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