Howard's Medical settles with ATP, NSM

YAKIMA, Wash. - Howard's Medical has settled its lawsuit against Daryl Bullard, a former employee, and National Seating & Mobility, his new employer, out of court for more than $40,000, says CEO Erik Mickelson.

The lawsuit alleged that Bullard violated a non-compete agreement and transferred confidential company information, and that NSM took no action to stop him.

“We have now defended two non-competes in the last seven years,” Mickelson said. “I am a strong proponent of local businesses and, in this current business environment, we need to stand up for ourselves. It's not a lot of money, but it's symbolic.”

Howard's Medical sought a permanent injunction enjoining the defendants from soliciting plaintiff's clients from plaintiff's customer and referral list, and from utilizing plaintiff's property for their own benefits and to further defendant's business; an award of plaintiff's reasonable attorney fees and costs; and other relief as the court deems just and equitable.

The non-compete agreement imposed certain limitations on Bullard at the time of his termination of employment, including a limitation on his ability to compete with plaintiff, to work for another medical supply company that may compete with plaintiff, and to solicit clients of the plaintiff. Additionally, Bullard had an obligation to return all confidential information and refrain from using such information for either himself or any other party's benefit, according to the lawsuit.

“In June of 2018, NSM was notified that Bullard, while in defendant NSM's employ, was utilizing confidential information of plaintiff to solicit customers of plaintiff for the benefit of NSM,” reads the lawsuit, filled June 28 in the Superior Court of the state of Washington for Yakima County. “NSM has taken no action to limit Bullard's use of plaintiff's information and continues to derive benefit from the information removed from plaintiff by Bullard. Bullard has continued to identify himself as an employee of plaintiff to plaintiff's customers for the purpose of gaining business for the benefit of NSM and Bullard.”

NSM said it was unable to comment on specific litigation, but said, in general, “Our company's policy is to respect all legitimate contractual relationships, and we are consistent in adhering to this policy. As a company, (we) represent all employees.”

While violations of non-competes aren't uncommon, they don't generally result in lawsuits, a healthcare attorney said.

“What usually happens is, an attorney sends a demand letter and, after a while, everyone will play nice,” the attorney said.

But in a complex rehab market where national providers like NSM dominate and where ATPs are required to do business with Medicare, there was likely too much at stake for Howard's Medical not to sue, the attorney said.

“This was a real hit for them,” the attorney said.