Alphatec Announces Favorable Judgment in NuVasive v. Miles Lawsuit
August 27 2019 - 9:00AM
Alphatec Holdings, Inc. (“ATEC” or “the Company”) (Nasdaq: ATEC), a
medical device company dedicated to revolutionizing the approach to
spine surgery, announced today that the Delaware Chancery Court
entered summary judgment in favor of its Chairman and Chief
Executive Officer, Pat Miles, terminating all non-competition and
employee non-solicitation claims brought against Miles and the
Company by competitor, NuVasive, Inc. (Nasdaq: NUVA).
Miles joined ATEC as its Executive Chairman on
October 2, 2017, and assumed the CEO role on March 8, 2018.
NuVasive sued Miles on October 10, 2017, simultaneously issuing a
global press release proclaiming that, by joining ATEC, Miles had
“violated his non-competition and non-solicitation obligations.”
NuVasive later added ATEC to the lawsuit, claiming that the Company
competed unfairly by allegedly allowing Miles to solicit NuVasive
employees and customers. Miles and ATEC denied any wrongdoing,
asserting that NuVasive’s post-employment restrictions with Miles
were void as a matter of law, and that he was free to move to ATEC
to lead the Company.
In a June 7, 2019 Opinion, the Delaware Court
agreed with Miles and ATEC, rejecting NuVasive’s non-competition
claims, finding that California law applied to Miles’ contract with
NuVasive, and that the post-employment non-compete restrictions
were contrary to “California’s strong public policy interest
against noncompetes.” Following additional briefing challenging the
legality of NuVasive’s employee non-solicitation restrictions, the
Delaware Court, in an Opinion dated August 26, 2019, again agreed
with Miles and ATEC and concluded that NuVasive’s “employee
non-solicitation covenants are a restraint of trade in violation of
California fundamental policy.” The Court then granted summary
judgment in Miles’ and ATEC’s favor, ending all of NuVasive’s
non-competition and non-solicitation claims.
“We are pleased with the Delaware Court’s
judgment and reasoning,” said Craig Hunsaker, ATEC’s Executive Vice
President and General Counsel. “It confirms what we’ve known and
said all along: NuVasive’s non-compete agreement was illegal from
the start, Pat was free to resign and join ATEC, and he violated no
law or enforceable contract in doing so. We believe NuVasive’s 2017
lawsuit and purposefully broad, public pronouncement of its
specious claims against Pat were part of a calculated scheme aimed
at punishing him for leaving NuVasive, tarnishing his reputation,
dissuading others from leaving NuVasive and preemptively harming an
emerging competitor, rather than at protecting any legitimate legal
interest. This judgment represents a significant step toward
setting the record straight and eliminates the vast majority of
NuVasive’s case. We look forward to addressing the few remaining
claims, and are eXtremely confident that in the end, Pat and ATEC
will prevail in full.”
As a result of the judgment, and the termination
of all causes of action related to the non-compete and
non-solicitation provisions, NuVasive’s basis for recovering
compensation paid to Miles under his NuVasive employment agreement
also is eliminated, as is any claim for damages NuVasive alleges to
have suffered due to Miles’ and ATEC’s lawful competitive
activities. There is also no longer any legal basis for NuVasive to
seek to prevent Miles’ employment by ATEC.
“I appreciate the Court’s validation of my right
to leave NuVasive to lead the New ATEC,” said Miles. “It echoes
what I told NuVasive when I resigned, in an attempt to dissuade
prior leadership from engaging in wasteful litigation. Having said
that, the success of this Company will be neither defined nor
derailed by lawsuits. Our sole focus is on making spine surgery
better, to the benefit of patients in the operating room. I
couldn’t be more confident in the team we have assembled. We are in
the midst of twelve new product releases in 2019, including the
highly anticipated launch of our revolutionary Alpha Informatix
platform. ATEC is positioned to be the standard bearer in spine; we
remain single-mindedly committed to that vision. We will not be
distracted by legal antics as we continue to unleash this Organic
Innovation Machine™.”
Miles and ATEC are represented by the San Diego
and New York offices of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., and in Delaware by Potter Anderson & Corroon
LLP.
About Alphatec Holdings,
Inc.
Alphatec Holdings, Inc., through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company that designs, develops
and markets Spine Approach Technologies for the treatment of spinal
disorders associated with disease and degeneration, congenital
deformities and trauma. The Company markets its products in the
U.S. via independent sales agents and a direct sales force.
Additional information can be found at
www.atecspine.com.
Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainty. Such
statements are based on management's current expectations and are
subject to a number of risks and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. The Company cautions investors that
there can be no assurance that actual results or business
conditions will not differ materially from those projected or
suggested in such forward-looking statements as a result of various
factors. A list and description of such risks and uncertainties can
be found in the Company's most recent annual report, and any
subsequent quarterly and current reports, filed with
the Securities and Exchange Commission. ATEC disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise, unless required by law.
Investor/Media Contact:
Tina JacobsenInvestor Relations(760)
494-6790ir@atecspine.com
Company Contact:
Jeff BlackExecutive Vice President and
CFOAlphatec Holdings, Inc.ir@atecspine.com
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