UnitedHealth Alleges Trade Secret Theft by Former Employees

UnitedHealth Group is suing two of its former executives, alleging that they are using confidential information stolen from UnitedHealth to sell a competing product for diabetes management, according to a story in the Minneapolis StarTribune.

The suit in a Minnesota federal court claims that Ken Ehlert, former chief scientific officer and CEO of UnitedHealth Group R&D, and Mark Pollman, former chief technology officer of R&D, pilfered the company’s confidential information and trade secrets shortly after they left in 2021.

The suit details how the alleged theft occurred. A few months after leaving the company, Pollman had lunch with a former subordinate at the company. “Pollman walked away from the lunch with a hard drive containing nearly 500,000 files from United, including highly sensitive business documents,” according to the complaint.

Among the documents were internal growth plans, board meeting minutes, contract negotiation details, financial statements and potential acquisition targets. 

The defendants then allegedly created a company called Lore Health and several shell companies for the purpose of using the confidential information.

According to the plaintiff, the former officers thus violated non-compete and confidentiality clauses in their employment contracts, and tried to hide their wrongdoing by erasing or altering incriminating information.

Ehlert and Pollman have a different version of events. They were hired by UnitedHealth when it acquired their healthcare company and a product under development, Level2, a diabetes management program that helps people control type 2 diabetes, and lowers health care costs.

They sold the company to UnitedHealth in 2017, for $46.8 million. The price was subject to upward revision based on the value of Level2 once it was commercialized.

In a suit they filed for breach-of-contract in 2022, Ehlert and Pollman claimed United refused to negotiate additional compensation and “began a campaign to appropriate the Level2 business entirely for its sole benefit.”

That litigation was terminated in December 2022 after court mandated arbitration. The terms of the settlement are confidential.