Stryker Corporation et al v. Ridgeway et al

Filing 623

OPINION; signed by Judge Robert Holmes Bell ; this document appears in the following associated cases: 1:13-cv-01066-RHB, 1:14-cv-00889-RHB (Judge Robert Holmes Bell, sdb)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

STRYKER CORPORATION, et al.,
Plaintiffs,
Case No. 1:13-CV-1066
v.
HON. ROBERT HOLMES BELL
CHRISTOPHER RIDGEWAY, et al.,
Defendants.
and
STONE SURGICAL, LLC,
Plaintiff,
v.
Case No. 1:14-CV-889
STRYKER CORPORATION, et al.,
Defendants.
/
OPINION
Plaintiffs Stryker Corporation and Howmedica Osteonics Corporation (collectively,
“Stryker”) bring this action against Defendants Christopher Ridgeway, Richard Steitzer and
Biomet Microfixation, LLC (“Biomet”). In the amended complaint, Stryker asserts several
claims, including: breach of contract against Defendant Richard Steitzer (Count II);
misappropriation of trade secrets in violation of the Michigan Uniform Trade Secrets Act
(MUTSA), Mich. Comp. Laws § 445.1901, against all Defendants (Count IV); and tortious

interference with contracts against Biomet (Count V). Before the Court is Steitzer and
Biomet’s motion for summary judgment on the foregoing claims. (ECF No. 364.)1 The
motion will be granted in part and denied in part.
I.
Stryker manufactures and sells medical devices. Until June 2013, Steitzer was
employed by Stryker as a sales representative in the Neuro Spine ENT business unit and
Craniomaxillofacial (“CMF”) division of Stryker, with responsibilities in the Albany, New
York region. (Am. Compl. ¶¶ 2, 4.) In connection with his employment, Steitzer signed
agreements not to compete with Stryker and not to disclose Stryker’s confidential
information. After he left Stryker, he was hired by Senops, LLC (“Senops”), a distributor for
Biomet. Like Stryker, Biomet sells CMF devices. Stryker claims that Biomet and the owner
of Senops, Christopher Beck, devised a plan to take Stryker’s business in Albany by hiring
Steitzer. Stryker further claims that Steitzer accepted Senops’ offer sometime prior to his
resignation from Stryker, then disclosed Stryker’s confidential information to Senops and
started working on behalf of Senops and Biomet, in violation of MUTSA and his
employment agreements.

1

The ECF numbers in this Opinion refer to the docket in Case No. 1:13-CV-1066, except as
otherwise indicated. The motion before the Court is also found at ECF No. 319 in consolidated Case
No. 1:14-CV-889.
2

Ridgeway was also employed by Stryker as a sales representative in the CMF division,
with responsibilities in Louisiana. Stryker terminated him in September 2013 after it learned
that he was working for Biomet. Stryker claims that, like Steitzer, he breached the noncompete restrictions and confidentiality obligations in his employment agreements.
II.
Rule 56 of the Federal Rules of Civil Procedure requires the Court to grant summary
judgment “if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In evaluating
a motion for summary judgment the Court must look beyond the pleadings and assess the
proof to determine whether there is a genuine need for trial. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). “[T]he district court must construe the
evidence and draw all reasonable inferences in favor of the nonmoving party.” Martin v.
Cincinnati Gas & Elec. Co., 561 F.3d 439, 443 (6th Cir. 2009) (citing Jones v. Potter, 488
F.3d 397, 403 (6th Cir. 2007)). When such a motion is filed by the defendant, the “plaintiff
must do more than rely merely on the allegations of her pleadings or identify a ‘metaphysical
doubt’ or hypothetical ‘plausibility’ based on a lack of evidence; [a plaintiff] is obliged to
come forward with ‘specific facts,’ based on ‘discovery and disclosure materials on file, and
any affidavits[.]’” Chappell v. City of Cleveland, 585 F.3d 901, 912 (6th Cir. 2009) (quoting
Fed. R. Civ. P. 56(c); Matushita, 475 U.S. at 586-87). The proper inquiry is whether the
evidence is such that a reasonable jury could return a verdict for the non-moving party.

3

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); see generally Street v. J.C.
Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir. 1989).
III.
A. Breach of Contract (Count II)
In his non-compete agreement with Stryker, Steitzer agreed not to “[e]ngage or
participate in any . . . activity competitive with [Stryker],” including “activity that is directed
to or designed to solicit or divert any of [Stryker]’s customers . . . for [Steitzer’s] or any . . .
competitor’s benefit.” (Non-Compete Agreement, ECF No. 23-3, PageID.447.) He also
agreed not to “solicit, attempt to solicit, assist another to solicit [Stryker’s] Customers, or in
any other way, attempt to influence [Stryker’s] Customers to alter or terminate their business
relationship with [Stryker].” (Id.) These restrictions applied during the term of his
employment and for up to one year thereafter. The stated purpose of the agreement was to
ensure that Steitzer would not “unfairly compete” using “confidential information relating
to [Stryker’s] customers, their purchasing patterns, discount codes, pricing formulae and
other proprietary information” obtained by Steitzer by virtue of his employment. (Id.)
Steitzer also signed a confidentiality agreement in which he agreed not to disclose
Stryker’s confidential and proprietary information, which includes all information that he
received through his employment, but excludes information “which at the time of disclosure
is in the public domain.” (Employee Confidentiality & Intellectual Property Agreement, ECF
No. 23-5, PageID.461-62.) Stryker claims that Steitzer breached both of these agreements.

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1. Damages & Causation
Steitzer contends that Stryker cannot succeed on its breach-of-contract claims because
it cannot prove that any alleged breaches of the non-compete and confidentiality agreements
caused any damages. Proof of damages is an essential element of a claim for breach of
contract. See Aidamark, Inc. v. Roll Forming Corp., 580 F. App’x 408, 414 (6th Cir. 2014).
According to Stryker, “[n]ot a single doctor or hospital employee has testified or will testify
either that Steitzer violated his Non-Compete Agreement or that anything Steitzer did or said
during 2013 through June 2014 caused them to stop buying Stryker products. Instead,
Stryker’s damages allegations are based entirely upon inadmissible hearsay and speculation.”
(Defs.’ Mem. in Supp. of Mot. for Summ. J. 13, ECF No. 365.)
The Court disagrees. As discussed below, Stryker has presented evidence by which
a reasonable jury could find that Steitzer breached his agreements, thereby causing Stryker
to lose market share to Biomet.
(a) Biomet and Senops recruit Steitzer.
In 2012, Senops did not have any sales in Albany. (Beck Dep. 53-54, ECF No. 410-6.)
In March of that year, Beck proposed to Guy Cassone, Biomet’s regional manager, that they
should recruit Steitzer in order to take Stryker’s business in the region. (Beck Dep. 131-33;
Emails, ECF No. 410-8.) Cassone responded that he would like to “reach out” to Steitzer, and
that Steitzer should see Biomet’s “commitment” to Senops. (Id.) On April 9, 2012, Beck sent
Cassone a document detailing Senops’ expected sales and proposing commissions rates if

5

Senops hired Steitzer. (Email, ECF No. 410-9.) Beck indicated that Steitzer could bring over
$1 million in business in the first year, but that Senops would require a “supplement” from
Biomet in order to provide Steitzer with sufficient compensation. (Id.) Cassone forwarded
the proposal to Mark Michaelson, Biomet’s Director of Sales. (Id.) On April 18, Beck offered
Steitzer a guaranteed salary of $175,000, noting that the guarantee “doesn’t work” unless
Steitzer/Senops could “bring over at least $500k in business . . . in the first year.” (Email,
ECF No. 410-10.) Beck was aware of Steitzer’s non-compete agreement, but Steitzer’s salary
guarantee was not contingent on whether Stryker held him to it. (See id.) Steitzer claims that
he rejected Beck’s offer. (Steitzer Dep. 27, ECF No. 407-1.) However, Beck sent information
about Biomet’s CMF products to Steitzer’s wife’s email address over the next several
months. (Emails, ECF Nos. 410-14, 410-15.)
(b) Beck and Biomet set aside product sets for Albany.
In January 2013, as discussions with Steitzer were ongoing, Beck and Cassone set
aside product sets for the Albany market. (Beck Dep. 87-90.) Beck later described the sets
as being necessary for a “quick conversion” in Albany. (Email, ECF No. 410-19.)
(c) Steitzer agrees to work for Senops.
In February 2013, Beck sent Steitzer another proposal with a salary guarantee of
$175,000. (Email, ECF No. 410-21.) Steitzer ostensibly agreed to this proposal, because it
is the last formal proposal that Senops communicated to him before he officially joined

6

Senops. (Beck Dep. 73.) Beck subsequently sent him more information about Biomet’s CMF
products. (Emails, ECF Nos. 410-24, 410-26.)
On May 10, Beck wrote Cassone to inform him that Senops would be hiring
“someone” to sell sternal products (i.e., not CMF products) in Albany. (Email, ECF No. 41027.) Cassone asked for more information, and Beck clarified that he was referring to Steitzer.
(Email, ECF No. 410-28.)
(d) Steitzer speaks to his customers about Biomet.
Sometime prior to his departure from Stryker, Steitzer made it known to the doctors
he was working with at Albany Medical Hospital and St. Peters Hospital that he would be
leaving Stryker to work for Biomet, and that if Stryker did not enforce its non-compete
agreement, he would be seeing them regularly on behalf of Biomet. (Steitzer Dep. 43-46.)
If Stryker did enforce its non-compete, Steitzer told them, then they would be seeing a new
sales representative for Stryker and would likely see a new one for Biomet. (Id.) Although
there is no indication that Steitzer expressly encouraged Stryker’s customers to switch over
to Biomet, a jury could reasonably determine that his comments were intended to have that
effect. There was no need for Steitzer to mention his plan to continue seeing his customers
on behalf of Biomet, or even to mention Biomet at all, unless he intended for them to switch
over.
Moreover, the evidence suggests that these comments, as well as Steitzer’s other
actions described below, were effective. At the time, all of the doctors at St. Peters used

7

Stryker CMF products exclusively. (Id. at 53.) After Steitzer left Stryker, none of them did
so. (Campana Dep. 15, ECF No. 407-5.) In the fall of 2013, doctors at St. Peters told
Stryker’s new sales representative for Albany, Zach Ten Eyck, that they had switched over
to Biomet because Steitzer had moved to Biomet. (Ten Eyck Dep. 19-20, ECF No. 410-54.)
(e) Steitzer assists Senops’ new sales representative.
Evidence suggests that Steitzer assisted Senops with recruiting a sales representative
who would sell Biomet’s CMF products to Stryker’s customers, and later assisted that
representative in his work. In April 2013, Steitzer told an acquaintance, Michael Elsworth,
about an opportunity to work for Senops as a sales representative, and then they met together
to discuss the opportunity. (Elsworth Dep. 14-17, ECF No. 407-36.) Elsworth had just
graduated from college four months’ prior to that time. (Id. at 10.) Elsworth had no prior
experience selling medical devices, and no relationships with doctors or hospitals in Albany.
(Beck Dep. 92.) On April 28, Senops hired Elsworth to be its sales representative in Albany
for CMF products. On May 8, only two weeks after Elsworth began working for Senops,
Biomet landed its “first case” at St. Peters, scheduled to take place on May 13. (Email, ECF
No. 410-34.) According to Stryker’s sales staff, it would have been nearly impossible for
someone in Elsworth’s shoes to have achieved this feat alone, without assistance from
someone who had relationships with the hospital administrative staff, and who knew the parts
required for a particular procedure, as well as the specific needs of particular surgeons.
(Campana Dep. 69.) Steitzer admits that he gave Elsworth a list of doctors that he worked

8

with in Albany. (Steitzer Dep. 69.) Later that year, he sent Elsworth detailed notes about the
doctors and staff that he worked with at Albany Medical and St. Peters, including
information about their personal preferences and the parts that they used in their procedures.
(See Doctor Notes, ECF Nos. 410-67, 410-68.) Stryker claims that this information is a
confidential trade secret.
Steitzer was also seen with Elsworth at the hospitals in Albany in the fall of 2013,
ostensibly to assist Elsworth with the sale of Biomet’s CMF products. Ten Eyck saw Steitzer
at St. Peters and Albany Medical on a number of occasions. (Ten Eyck Dep. 75-77.) On one
occasion, he saw both Steitzer and Elsworth together in the operating room with Dr. Buccino,
one of Steitzer’s customers from his time at Stryker, during a CMF procedure. (Id. at 78-80.)
(f) Steitzer assists Senops with ordering product sets and setting prices
for Biomet products.
Evidence also indicates that Steitzer helped Beck identify the specific needs of
Stryker’s customers in Albany, and set prices for Biomet’s CMF products, using Stryker
information. On or about April 23, Beck asked Biomet to provide a price list for St. Peters.
(Beck-Bresland Emails, ECF No. 410-31.) Beck indicated that he would “play with the
pricing” and send it back for approval. (Id.) On May 2, Steitzer accessed and emailed himself
documents identifying Stryker’s then-stocked consignment items at St. Peters. (Email, ECF
No. 410-32.) Stryker contends, and Defendants do not deny, that Steitzer also possessed
purchase orders for St. Peters which identified Stryker’s pricing for St. Peters. Stryker’s

9

pricing agreement with St. Peters was not publicly available. (Baird Decl., ECF No. 410-41.)
Stryker claims that both its par levels and its pricing are trade secrets.
A few days later, Beck prepared a document identifying Biomet’s “set” needs for St.
Peters and Albany Medical, and sent it to Biomet. (Email, ECF No. 410-33.) On May 13,
Beck emailed Cassone, telling him, “I am in desperate need of some trauma one sets, neuro
sets, and IQs for Albany terr. We are running up there and need to be prepared for an
increased (sic) in caseload ASAP.” (Email, ECF No. 410-35.) The next day, Beck sent
Biomet a modified price list for St. Peters for Biomet’s approval. Added to the price list was
a column containing part numbers for Stryker products that corresponded to Biomet’s
products. (St. Peters Pricing, ECF No. 410-38.) The list also identified the “most commonly
used” Stryker plate at St. Peters. (Id.) Almost all of the Stryker items referenced in the list
are contained in the consignment documents accessed by Steitzer on May 2. Moreover, some
of the prices in the list were modified by Beck. In every instance in which there is a
corresponding Stryker part, Beck proposed a price lower than Stryker’s, but higher than the
price in Biomet’s initial proposal.
On May 15, Beck sent another email to Biomet, requesting specific product sets for
Drs. Busino and Kleinaman at St. Peters (Email, ECF No. 410-19; Beck Dep. 91), who
worked exclusively with Steitzer during his time at Stryker (Steitzer Dep. 39-40). On or
about May 22, Beck asked Biomet for consignment sets for St. Peters. In many instances, the
number of Biomet parts requested by Beck is the same as, or similar to, the number of

10

corresponding Stryker parts identified in the consignment documents accessed by Steitzer
on May 2.
In July 2013, Elsworth sent Steitzer a price list for St. Peters so that Steitzer could
cross-reference Biomet product numbers with Stryker product numbers and suggest pricing
for Biomet products at Albany Medical. (Elsworth Dep. 57-58, 60; Steitzer Dep. 74-76.) At
the time, Steitzer possessed Stryker pricing proposals for St. Peters and Albany Medical from
June 2013 which were identified as “confidential.” (Elsworth Dep. 58, 69; Stryker Proposals,
ECF Nos. 410-2, 410-3.) He sent the Albany Medical proposal to Elsworth, telling him that
it could be used for pricing. On August 6, Steitzer sent Elsworth a modified Biomet pricing
proposal for use at Albany Medical. (Email & Attachment, ECF No. 410-69.) Elsworth then
sent it to Biomet for approval. (Elsworth Dep. 71-72.) The pricing in this proposal was
subsequently incorporated into an agreement between Biomet and Albany Medical dated
August 20, 2013. (See Inventory Stocking/Consignment Agreement, ECF No. 410-72.)
The price administrator at Albany Medical, Anne Didio, later told Ten Eyck that
Steitzer was the one who gave her the part numbers and pricing for Biomet products. (Ten
Eyck Dep. 101-05.) On one occasion, Stryker received an email from Didio that was sent to
Steitzer’s old email address, in which she requested price information for a Biomet part.
(g) Stryker’s sales decline and Senops’ sales increase.
The reduction of Stryker’s sales in Albany after Steitzer’s departure, and the increase
in sales by Senops, also suggest that Steitzer was responsible for moving business from

11

Stryker to Biomet. From May 2012 to May 2013, before Steitzer left Stryker, Senops’ yearly
sales at Albany Medical and St. Peters were approximately $191,000 and $10,400,
respectively. (Beck Dep. 97-98.) These were for sternal products, which Stryker does not
sell. (Id. at 100.) From June 2013 to June 2014, Senops’ sales at these two hospitals grew to
approximately $620,000 and $374,000, respectively. (Id. at 101-02.) During the same time
period, Stryker’s sales to these hospitals declined from over $100,000 per month to less than
$15,000. (Cameron Dep. 69, ECF No. 410-1.)
Steitzer contends that other factors are attributable to Stryker’s decline in sales,
including the fact that: (1) after he left the company, Stryker did not have a CMF sales
representative in Albany for four months; (2) Beck and Elsworth were actively working in
Albany for several months prior to Steitzer’s departure; and (3) two other device
manufacturers were competing for Stryker’s business in Albany. At best, however, this
evidence merely suggests that there could be other reasons for some or all of Stryker’s loss
of business. It does not demonstrate that Steitzer is entitled to summary judgment, because
it does not rule out the possibility that his actions are responsible for those losses. Indeed,
even though Stryker did not have a designated sales representative in Albany for several
months, it sent other representatives to fill in for Steitzer. (See Tierney Dep. 42-45, ECF No.
407-6; Campana Dep. 21; Albano Dep. 50-51, ECF No. 407-87.) Moreover, as to Beck and
Elsworth, the evidence suggests that Steitzer assisted them in this work. As to other device

12

manufacturers, Steitzer offers no evidence of comparable gains by other competitors to
account for the substantial losses experienced by Stryker.
In short, Stryker has presented sufficient evidence on which a reasonable jury could
find that Steitzer breached his non-compete and confidentiality agreements, and that these
breaches contributed to Stryker’s loss of business. Thus, the Court rejects his argument that
he is entitled to summary judgment with respect to causation and damages.
2. Confidentiality Agreement
Steitzer also contends that Stryker cannot succeed on any claim with respect to the
confidentiality agreement because the information in the documents that Steitzer gave to
Elsworth, i.e. Stryker’s pricing proposal for Albany Medical and Steitzer’s notes about doctor
preferences, was not confidential. (See Confidentiality Agreement, ECF No. 23-5,
PageID.461 (excluding information “which at the time of disclosure is in the public domain”
or which “after disclosure, becomes part of the public domain by publication or otherwise
through no act on Employee’s part”).)
(a) Albany Medical pricing proposal
As to the information in the pricing proposal, Stryker’s Director of National Accounts
and Strategic Pricing testified that a sales representative can “provide [a pricing proposal]
to anybody.” (Baird Dep. 15, ECF No. 365-24.) In addition, Stryker has a general idea of the
pricing of its competitors. (See id. at 18. (“We have an idea where everybody normally is. . . .
I mean, generally speaking, we know where pricing exists in the craniomaxillofacial

13

space.”).) Other Stryker employees testified similarly. (See Campana Dep. 152, ECF No.
368-4 (“You have an understanding where our competitors are trying to price out compared
to where we are.”).) Furthermore, on occasion, hospitals will disclose the prices that a
competitor is charging (Cruikshank Dep. 133-34, ECF No. 365-27), or a sales rep will
sometimes come across the information at the hospital if it is “left out.” (Tierney Dep. 130,
ECF No. 365-3.)
On the other hand, Stryker notes that the proposal disclosed by Steitzer was
specifically designated as “confidential,” with a notice that the recipient “will not disclose
to any third party the terms of this proposal or any other information, including any pricing
or discounts, offered to be provided by Stryker . . . in connection with this proposal . . . .”
(Albany Medical proposal, ECF No. 410-69.) Other individuals testified that hospitals
generally do not disclose the prices they are paying for their products because “they are pretty
strict about confidentiality.” (Tierney Dep. 130, ECF No. 407-6.) It would be “highly
unusual” for them to disclose such information. (Baird Dep. 35, ECF No. 407-4.)
In light of this conflicting evidence, a factual dispute remains as to whether the
product pricing in Stryker’s pricing proposals was confidential. Some evidence indicates that
there is a general awareness of pricing in the industry, and that specific information can be
obtained from some hospitals in some circumstances. But that evidence does not establish
that specific prices are generally known, let alone that the prices Stryker offered to Albany
Medical in June 2013 were in the public domain. Neither party claims that Albany Medical

14

made this information publicly available, and there is no evidence that the hospital would
have disclosed it if asked. Consequently, Steitzer is not entitled to summary judgment on this
issue.
(b) Doctor Notes
Steitzer also claims that his notes about his customers’ product preferences were not
confidential. He cites evidence from Stryker’s current/former employees that such
information is “readily available to anybody that wants to know.” (Mayfield Dep. 243, ECF
No. 365-31.) It can be found by looking at a doctor’s case cart, on “something that anybody
can walk by and pick up.” (Green Dep. 20, ECF No. 365-26.) Nurses would also provide that
information. (Lewis Dep. 31-32, ECF No. 365-32.)
In response, Stryker offers testimony from one of its employees that “customer
preferences take years to understand, and this information is certainly not openly available.”
(Cameron Dep. 126.) On further questioning, this employee conceded that “a rep could find
out this information, it would just take time.” (Id. at 130.)
Based on the foregoing, the Court finds that there is a dispute of fact as to whether
doctor preferences were confidential. Consequently, Steitzer is not entitled to summary
judgment as to the disclosure of his notes.
B. Count IV: Misappropriation of Trade Secrets
Defendants seek summary judgment on Stryker’s claims against Steitzer and Biomet
regarding the misappropriation of trade secrets.

15

1. Actual Misappropriation (Biomet & Steitzer)
Defendants contend that Stryker has identified only two trade secrets as the subject
of its claim: the doctor preferences in the Doctor Notes and the pricing information in the
Albany Medical proposals.2 Defendants contend that this information is not confidential and
that Stryker did not use reasonable efforts to maintain its secrecy.
(a) Secrecy
Defendants claim that doctor preferences and pricing are not trade secrets because
they are not confidential. As discussed in the Court’s December 14, 2015 Opinion, however,
Stryker has offered evidence that its pricing and information about doctor preferences are not
readily available to new entrants to the market. (12/14/2015 Op. 14, ECF No. 439.)
Consequently, this is a question of fact for trial. (Id.)
(b) Reasonable Efforts
Defendants further contend that Stryker did not take reasonable efforts to maintain the
secrecy of their information. However, the Albany Medical proposal contained a
confidentiality notice and there is at least a question of fact as to whether the doctor
preferences and pricing were covered by Steitzer’s confidentiality agreement. See Section
III.A.2(a). Defendants concede that the use of non-disclosure agreements can constitute a
2

In response, Stryker identifies its pricing, customer preferences, and “par levels” (i.e., the
number of plates and screws that a hospital stocks) as trade secrets. (Pls.’ Resp. in Opp’n to Mot. for
Summ. J. 3, ECF No. 407; see also Pls.’ Answers to Interrog., ECF No. 365-67, PageID.8583
(identifying the trade secrets as “Stryker pricing information, specific physician needs, preferences
and idiosyncrasies, and specific set needs and part needs at Stryker’s former customers in the Albany
region.”).)
16

reasonable measure, and this Court has also recognized that the use of employee
confidentiality agreements and confidentiality notices constitute reasonable efforts to
maintain the secrecy of a trade secret. See, e.g., Veteran Med. Prods., Inc. v. Bionix Dev.
Corp., No. 1:05-cv-655, 2008 WL 696546, at *8 (W.D. Mich. Mar. 13, 2006) (collecting
cases). Thus, Defendants are not entitled to summary judgment on this basis.
2. Threatened Misappropriation (Steitzer)
Defendants contend that there is no evidence that Steitzer threatened to misappropriate
any trade secrets, because Stryker has not provided evidence of the requisite “duplicity” to
support its claim. Under MUTSA, “[a]ctual or threatened misappropriation [of trade secrets]
may be enjoined.” Mich. Comp. Laws § 445.1903(1). Misappropriation involves the use,
disclosure or acquisition of a trade secret. Mich. Comp. Laws § 445.1902. “To establish
threatened misappropriation, a party must specifically identify the trade secret likely to be
misappropriated and must convince the court of the former employee’s ‘duplicity’ by
proffering evidence indicating a significant lack of candor or willingness to misuse trade
secrets.” Gene Codes Corp. v. Thomson, No. 09-14687, 2011 WL 611957, at *5 (E.D. Mich.
Feb. 11, 2011).
As to Steitzer, Stryker has offered evidence that Steitzer actually misappropriated
Stryker’s trade secrets. He used the information in the Albany Medical pricing proposal to
set prices for Senops. Also, he sent a pricing proposal to Elsworth despite the fact that it
contained a confidentiality notice. Furthermore, when doing so, he communicated with

17

Elsworth using his wife’s email account, ostensibly in order to hide his actions. These facts
are more than adequate to support a “willingness” to misappropriate.
3. Threatened Misappropriation (Biomet)
Biomet contends that there is no evidence that it threatened to misappropriate trade
secrets, or that it encouraged, solicited, or condoned Steitzer’s alleged misappropriation of
Stryker’s trade secrets. Stryker responds that liability for Steitzer’s conduct is imputed to
Biomet because it “knew of Steitzer’s bad acts, participated in those bad acts, and did
nothing to prevent [them].” (Pls.’ Resp. in Opp’n to Mot. for Summ. J. 26, ECF No. 407.)
But Stryker offers no evidence to support these assertions. Instead, its evidence indicates that
Steitzer provided information to Beck and Elsworth, and that Beck and Elsworth used that
information when ordering products from, and submitting price proposals to, Biomet. There
is no evidence that Biomet, or any of its employees, knew or should have known that the
orders or proposed prices received from Beck and Elsworth were based on Stryker’s alleged
trade secrets.
Stryker asserts that Biomet is vicariously liable for the conduct of Steitzer because
Steitzer (or Senops) was an employee or agent of Biomet. But Stryker’s assertion of vicarious
liability for actual misappropriation does not address the issue raised by Biomet, which is
whether Stryker can obtain injunctive relief against Biomet for threatened misappropriation.3
3

To the extent Biomet seeks summary judgment as to actual misappropriation, the Court finds
that Stryker has offered sufficient evidence to raise a question of fact as to whether Steitzer or
Senops acted as agents of Biomet. Stryker notes that Biomet’s Vice President of Sales that he
considered Steitzer to be an “indirect employee.” (Lewis Dep. 242-43, ECF No. 407-43.) In addition,
18

Stryker points out that Cassone worked with Beck to solicit Steitzer and move
Stryker’s business to Biomet; however, Stryker does not explain how this conduct is relevant
to its claim. Soliciting the employee of a competitor is not the equivalent of soliciting
confidential information and trade secrets from that employee. Moreover, Michigan has not
adopted the “inevitable disclosure” doctrine; thus, the employment of a person with
knowledge of “generalized” trade secrets (i.e. pricing, customers, margin, etc.) does not, in
itself, suffice to establish a claim for threatened misappropriation. See Degussa Admixtures,
Inc. v. Burnett, 277 F. App’x 530, 535 (6th Cir. 2008).
Stryker notes that Biomet continues to use the pricing proposed by Steitzer in
Biomet’s price agreement with Albany Medical. But Biomet’s price agreement is not a
Stryker trade secret, and its continued use does not threaten to misappropriate any Stryker
trade secrets. Consequently, the Court will grant summary judgment in favor of Biomet to
the extent that Stryker asserts a claim for threatened misappropriation of Stryker’s trade
secrets in Count IV.

the agreement between Biomet and Senops requires Senops and its employees to “devote their full
business time, attention and best efforts to promoting, marketing and selling” Biomet products
(Letter Agreement, ECF No. 410-7); it also requires Senops not to disclose confidential information
about Biomet’s products and to take formal training from Biomet (id.). Biomet notes that the
agreement disclaims an agency relationship, but the manner in which the parties designate their
relationship is not controlling. Byzewski v. Aerotek, Inc., No. 242676, 2004 WL 95198, at *4 (Mich.
Ct. App. Jan. 20, 2004).
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C. Count V: Tortious Interference with Contracts
Biomet seeks summary judgment on Stryker’s claims that Biomet tortiously interfered
with the non-compete and confidentiality agreements of Stryker’s former employees, Steitzer
and Ridgeway.
1. Ridgeway’s Non-Compete
Biomet contends that Stryker has not provided evidence of Biomet’s tortious
interference with Ridgeway’s non-compete agreement, because Ridgeway repeatedly told
Biomet that he did not have a non-compete agreement with Stryker. (Ridgeway Dep. 344-45,
ECF No. 365-13; Lewis Decl. ¶ 5, ECF No. 365-8.) Consequently, Biomet did not believe
that he had one. (Lewis Dep. 20-21, ECF No. 365-12; Lewis Decl. ¶ 6.) When it learned
about the non-compete in Stryker’s complaint in this action, it terminated its relationship with
Ridgeway. (Lewis Decl. ¶ 8.)
“Tortious interference with contract exists when a third party to a contract, knowing
of the contract, intentionally and wrongfully induces a breach of the contract which results
in damage to a non-breaching party.” APCO Oil Co., Inc. v. Knight Enters., Inc., No. 262536,
2005 WL 2679776, at *2 (Mich. Ct. App. Oct. 20, 2005). “[I]t is an essential element of a
claim of tortious interference with a contract that the defendant ‘unjustifiably instigated or
induced’ the party to breach its contract.” Knight Enters. v. RPF Oil Co., 829 N.W.2d 345,
348 (Mich. Ct. App. 2013) (quoting Derosia v. Austin, 321 N.W.2d 760, 762 (Mich. Ct. App.
1982)). Thus, the defendant must be aware of the contract and purposefully instigate or

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induce a breach. See id. In this case, however, the undisputed evidence shows that Biomet
believed that Ridgeway did not have such an agreement.
Stryker contends that Lewis would have known of such an agreement because he was
a sales manager with responsibility over Ridgeway when Ridgeway was hired as a sales
representative. (Lewis Dep. 17, ECF No. 407-43.) He was also aware that, “[i]n general,”
Stryker required its sales representatives to sign non-compete agreements. (Id. at 68.) In
addition, he acknowledged that non-compete agreements for sales representatives are
standard in the industry. (Id. at 27-28.) But Lewis’ awareness of industry standards and
Stryker’s “general” practices does not establish that he was aware of Ridgeway’s agreement
with Stryker, let alone that Biomet purposefully induced him to breach it. Lewis repeatedly
asked Ridgeway about a non-compete agreement, and Ridgeway repeatedly denied that he
was subject to one. Even if Ridgeway’s statements were false, Biomet could not have
intentionally and purposefully interfered with a contract that it believed did not exist. See
Knight Enters., 829 N.W.2d at 349 (finding no claim of tortious interference with a contract,
in part, because the party to the agreement unequivocally, but mistakenly, represented that
it was not in effect). Consequently, Biomet is entitled to summary judgment with respect to
tortious interference with Ridgeway’s non-compete agreement.
2. Ridgeway’s Confidentiality Agreement
Biomet contends that there is no evidence that it interfered with Ridgeway’s
confidentiality agreement. According to Biomet, it never requested confidential information

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from Ridgeway, and Ridgeway never provided it. (Lewis Aff, ECF No. 365-13.) However,
Stryker has offered evidence that during a meeting between Lewis, Ridgeway, and Lauren
Border, Lewis asked them, “[A]re there any products that your surgeons would need that
[Biomet] would not have?” (Border Dep. 9, ECF No. 346-20.) Border responded that “we
ha[ve] a physician that liked our . . . locking technology.” (Id.) Ridgeway subsequently
offered to supply a sample locking plate for Biomet to copy, told Biomet that its tray did not
hold enough implants, and told Biomet what sets and par levels he would need for the
hospitals in his territory. (See 12/14/2015 Op 30, ECF No. 439.) Stryker claims that its
customer preferences and par levels are confidential. The foregoing evidence is sufficient to
create an issue of fact for trial regarding Biomet’s alleged interference with Ridgeway’s
confidentiality agreement.
3. Steitzer’s Non-Compete
Biomet acknowledges that it was aware of Steitzer’s non-compete agreement, but it
claims that Lewis and Beck agreed that Steitzer would be “sternal only” (i.e., not involved
in selling CMF products) so as to avoid the terms of his non-compete. (Lewis Dep. 244, ECF
No. 365-32.) But Stryker’s evidence indicates that Beck worked with Cassone to recruit
Steitzer for the very purpose of taking Stryker’s business. Cassone also approved a proposed
compensation plan for Senops and Steitzer based on the assumption that Steitzer would bring
over significant business from Stryker. Cassone then made it possible to convert Steitzer’s

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customers by setting aside product sets for Albany. The foregoing evidence is sufficient to
create a factual dispute regarding Stryker’s claim that Biomet intentionally induced Steitzer
to violate his non-compete agreement.
4. Steitzer’s Confidentiality Agreement
Biomet argues that there is no evidence that it induced or encouraged Steitzer to share
any of Stryker’s confidential information. Stryker responds that Biomet knew or should have
known that Steitzer gave confidential information to Beck, yet it did nothing to prevent it.
For instance, in May 2013, shortly after Beck announced that he would be hiring Steitzer,
Biomet received a pricing proposal containing Stryker part numbers. Also, in August 2013,
Biomet received another proposal from Beck that had adjusted Biomet’s pricing. However,
knowledge of a breach and a failure to correct it are not sufficient in themselves to
demonstrate intentional and purposeful interference. As the Michigan Court of Appeals has
explained:
“‘[O]ne who alleges tortious interference with a contractual or business
relationship must allege the intentional doing of a per se wrongful act or the
doing of a lawful act with malice and unjustified in law for the purpose of
invading the contractual rights or business relationship of another.’” CMI
Int’l., Inc. v. Intermet Int’l. Corp., 251 Mich. App. 125, 131, 649 N.W.2d 808
(2002), quoting Feldman v. Green, 138 Mich. App. 360, 378, 360 N.W.2d 881
(1984). “A wrongful act per se is an act that is inherently wrongful or an act
that can never be justified under any circumstances.” Prysak v. R L Polk Co.,
193 Mich. App. 1, 12–13, 483 N.W.2d 629 (1992). “If the defendant’s conduct
was not wrongful per se, the plaintiff must demonstrate specific, affirmative
acts that corroborate the unlawful purpose of the interference.” CMI Int’l.,
supra at 131, 649 N.W.2d 808.

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Badiee v. Brighton Area Sch., 695 N.W.2d 521, 539 (Mich. Ct. App. 2005) (emphasis
added). Stryker has not provided evidence that Biomet committed a “per se wrongful act” for
the purpose of interfering with Steitzer’s confidentiality agreement. See id. Nor has it offered
evidence of “specific, affirmative acts” by Biomet that would corroborate an intent to
interfere with Steitzer’s confidentiality agreement. See id.
Stryker claims that evidence of Biomet’s knowledge and passivity provide a sufficient
basis to infer purpose and motive, citing MSC.Software Corp. v. Altair Eng’g, Inc., No.
2:07–cv–12807, 2014 WL 4740917 (E.D. Mich. Sept. 23, 2014). MSC.Software does not
stand for that proposition, however. In that case, the defendant was actively involved in
interfering with the contracts at issue. The defendant“approved” and “encouraged”
employees at the plaintiff’s company to improperly solicit other employees. Id. at *5. Stryker
has not offered evidence that Biomet solicited, approved or encouraged Steitzer’s alleged
violations of his confidentiality agreement. Thus, Stryker’s argument is without merit.
Based on the foregoing, the Court will grant Defendants’ motion for summary
judgment as to Stryker’s claim that Biomet intentionally interfered with Ridgeway’s noncompete agreement and Steitzer’s confidentiality agreement. The motion is not granted as
to Stryker’s claims in Count V regarding interference with Ridgeway’s confidentiality
agreement and Steitzer’s non-compete agreement.

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IV.
For the reasons stated herein, Steitzer and Biomet’s motion for summary judgment
will be granted solely as to Stryker’s claims that (1) Biomet threatened to misappropriate a
trade secret (part of Count IV); and (2) Biomet tortiously interfered with Steitzer’s
confidentiality agreement and with Ridgeway’s agreement not to compete (part of Count V).
In all other respects, the motion will be denied.
An order consistent with this opinion will be entered.

Dated: January 29, 2016

/s/ Robert Holmes Bell
ROBERT HOLMES BELL
UNITED STATES DISTRICT JUDGE

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