Guidant sues St. Jude Medical; says it lured workers with $50K bounties

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A Guidant Corp. lawsuit claims that heart device competitor St. Jude Medical Inc. offered $50,000 “bounties” to lure Guidant workers at a time when that company was struggling with high-profile recalls.The intent was to “inflict harm” on Guidant’s sales force and damage customer relationships in the Maryland area, where several of the departing employees were based, according to the lawsuit in Ramsey County, Minn.St. Jude Medical, based in a suburb of St. Paul, said small signing bonuses are customary and denied paying outlandish “bounties” to its workers to get them to recruit from Guidant.Guidant, which is now part of Boston Scientific Corp., sued after Christopher Delgado, of Ellicott City, Md., left his job as a regional sales manager for Guidant in July for a new position with St. Jude Medical. Guidant also claims employees who did jump to St. Jude were paid “extremely large” financial bonuses and other compensation for doing so.The lawsuit claims Delgado violated an employment agreement that prevented him from hiring former colleagues for a year after his departure, saying that after the former Maryland regional sales manager left, at least six people he supervised followed him to St. Jude.Job securityDelgado denies that, saying in court documents that resignations by his former Guidant colleagues were prompted by numerous recalls of Guidant heart defibrillators and pacemakers in the past 17 months, along with probes by Congress and the Food and Drug Administration, hundreds of product liability lawsuits and intense media coverage.Delgado’s lawyers say those are the same reasons he left.“He believed he would have more long-term job security by working with St. Jude because Guidant … is in such disarray, with no reasonable likelihood of being fixed in the near future,” the lawyers said in a legal brief.Similar reservations were expressed in court documents by other Maryland-area salesworkers who quit Guidant shortly after Delgado left. They feared layoffs, salary cuts and a generally bleak future with the company, said attorney James Gale, who represents Delgado and co-defendant St. Jude, at a hearing last month.As the recalls slowed sales of heart defibrillators in the past year, both St. Jude and Medtronic Inc. announced plans to hire more people to sell and support their devices in the field — 500 more at St. Jude, and 200 at Medtronic.Both companies, and Guidant’s heart rhythm unit, are based in the Twin Cities.Representatives selling defibrillators and pacemakers typically have significant technical and clinical knowledge, and are often are present in the operating room to test a device before and after doctors implant it. The job depends deeply on their relationship with doctors.Employees deny recruitmentIn affidavits, the employees denied that Delgado recruited them. Kevin Knox, a Guidant sales rep from Queen Anne, Md., said he left after refusing an instruction to put several defibrillators with depleted batteries back into a hospital’s inventory.“I was very troubled by the number of defective products, as well as the way in which Guidant handled these problematic circumstances,” he said, explaining his job switch.Donna Meilman of Baltimore, who left Guidant for St. Jude, said in an affidavit that she was “troubled” by a recall in June and by comments made then by Boston Scientific Chief Executive Jim Tobin that more advisories may be coming.Guidant claimed, though, that when a St. Jude manager tried to recruit Chris Richardson, director of Guidant’s Southeast sales force, Richardson was promised a series of “finder’s fees” if he lured others to St. Jude.