Case details
Sales manager claimed he was fired for making complaints
SUMMARY
$25142120
Amount
Verdict-Plaintiff
Result type
Not present
Ruling
KEYWORDS
FACTS
In October 2012, plaintiff Steven Babyak, 56, a regional sales manager for Cardiovascular Systems Inc., a Minnesota-based manufacturer of products to treat peripheral and coronary vascular disease, complained to upper management that his supervisor was implementing an illegal marketing program called the “Triangle Offense,” which operated to give doctors kickbacks for using CSI’s products. If the physician refused to use CSI’s products, the sales representatives would allegedly funnel patient referrals to other doctors who would use the product. Babyak also told management about an alleged off-label promotion of a company product and retaliation by his supervisor against him and the female members of his team. Babyak claimed that, after his complaints, his sales quota was substantially raised, his most valuable sales territories were taken away, and he was ultimately terminated on June 1, 2015. Babyak sued Cardiovascular Systems and his supervisor, Todd Goldberg. Babyak alleged that the defendants’ actions constituted whistleblower retaliation in violation of California Labor Code § 1102.5, wrongful termination, and retaliation after reporting mistreatment of women on his team. Goldberg was ultimately dismissed from the case. Babyak claimed he repeatedly expressed concerns to CSI upper management, human resources, and corporate legal counsel about a variety of issues, including patient safety, and violations of numerous state and federal laws, such as the Anti-Kickback Act, the Sunshine Act and that Sarbanes Oxley-Act. He claimed that as a result, he was retaliated against and terminated for those disclosures. Defense counsel noted that CSI is a growing manufacturer of medical devices that treat peripheral arterial disease and coronary artery disease and that during the time of the subject events, the company was growing rapidly and the sales force was substantially expanding. Counsel contended that this resulted in changes to sales territories and quotas throughout the country, which upset a number of salespeople, including Babyak, admittedly because it might adversely affect their compensation. Defense counsel argued that as the changes were taking place, Babyak began complaining about a variety of alleged improper activities at the company and that each of Babyak’s complaints was taken seriously, investigated, and addressed by the company with the inclusion of input from outside legal counsel. However, counsel argued that Babyak was unwilling to accept the results of those investigations and return to work, and that the situation came to a head in a meeting at headquarters, where Babyak yelled and cursed at his supervisor, while pounding the table in front of officers of the company. Defense counsel contended that rather than terminate Babyak immediately for his behavior, as many companies would have done, the company reassigned Babyak to report directly to the senior vice president of sales on an interim basis to see if the situation could be salvaged. Defense counsel argued that after two months, the reporting relationship proved unworkable and the company could identify no other way to effectively manage Babyak within its sales structure, so it reluctantly made the decision to terminate him., After his termination, Babyak got a job with another company, but was paid less. Thus, he sought recovery of $2,742,120 in past and future lost earnings, which was testified to by the plaintiff’s economics expert. Babyak also sought recovery of punitive damages. Defense counsel contended that Babyak quickly landed on his feet at another job within six weeks of his termination and then, just six months later, voluntarily took a $50,000 pay cut to go work for another company, where he saw a better opportunity.
COURT
Superior Court of Los Angeles County, Los Angeles, CA
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