Optum Vs Smith Jan 30 Hearing

1
* S E A L E D * Attorneys' Eyes Only *
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
)
OPTUM, INC. and )
OPTUM SERVICES, INC., )
)
Plaintiffs, )
) Civil Action
v. ) No. 19-10101-MLW
)
DAVID WILLIAM SMITH, )
)
Defendant. )
)
BEFORE THE HONORABLE MARK L. WOLF

UNITED STATES DISTRICT JUDGE
MOTION HEARING
January 30, 2019
John J. Moakley United States Courthouse

Courtroom No. 10
One Courthouse Way
Boston, Massachusetts 02210
Kelly Mortellite, RMR, CRR

Official Court Reporter
One Courthouse Way, Room 5200
Boston, Massachusetts 02210
mortellite@gmail.com
2
1 APPEARANCES:
2 Counsel on behalf of Plaintiffs:

Russell Beck
3 Stephen D. Riden
Hannah Tso Joseph
4 Lauren Schaefer
Beck Reed Riden LLP
5 155 Federal Street, Suite 1302
Boston, MA 02110
6 617-500-8670
rbeck@beckreed.com
7 sriden@beckreed.com
8 Counsel on behalf of Defendant:

Brian A. Mead
9 Michael T. Sheehan
McDermott Will & Emery LLP
10 444 West Lake Street
Suite 4000
11 Chicago, IL 60606
bmead@mwe.com
12 msheehan@mwe.com
13 John F. Welsh, III

Bello Welsh LLP
14 125 Summer Street
Suite 1200
15 Boston, MA 02110
617-247-4100
16 jwelsh@bellowelsh.com
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18
19
20
21
22
23
24
25
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2 INDEX
4 WITNESS PAGE
5
DAVID SMITH
6
Direct Examination By Mr. Beck 104
7 Cross-Examination By Mr. Sheehan 155
Redirect Examination By Mr. Beck 188
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10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
4
1 P R O C E E D I N G S
2 (Case called to order.)
3 THE COURT: Good morning. Would counsel please
4 identify themselves for the court and for the record.
5 MR. RIDEN: Good morning, Your Honor. For the
6 plaintiffs, Optum, Inc. and Optum Services, Inc., hereinafter
7 Optum, my name is Steve Riden from Beck Reed Riden.
8 MR. BECK: Good morning, Your Honor. Russell Beck
9 from Beck Reed Riden.
10 MS. JOSEPH: Good morning, Your Honor. Hannah Joseph
11 from Beck Reed Riden.
12 MS. SCHAEFER: Good morning, Your Honor. Lauren
13 Schaefer from Beck Reed Riden.
14 MR. SHEEHAN: Good morning, Your Honor. Michael
15 Sheehan on behalf of the defendant David Smith.
16 MR. WELSH: John Welsh on behalf of defendant Smith.
17 MR. MEAD: And Brian Mead on behalf of defendant Smith
18 as well.
19 THE COURT: Are Mr. Smith, Ms. Fleming, Mr. Wolin and
20 Mr. Andrews present to testify if necessary as I ordered
21 yesterday?
22 MR. RIDEN: I can speak for our side. Yes, Mr. Wolin
23 is here, as is Mr. Andrews, in addition to other witnesses as
24 needed.
25 MR. SHEEHAN: Mr. Smith and Ms. Fleming are here also,
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1 Your Honor.
2 THE COURT: Because I issued that order on short
3 notice, I offered an opportunity for potential witnesses to
4 request being excused for today. And I did excuse
5 Mr. Stoddard, because I was told he doesn't live in Boston, on
6 the condition that he make arrangements to be here by 9:00 a.m.
7 tomorrow if his testimony is necessary. Where does he live?
8 MR. SHEEHAN: He lives in Philadelphia, and he's made
9 those arrangements, so he will be here if necessary for
10 tomorrow morning.
11 THE COURT: Okay. And who is the representative of
12 the plaintiff for purposes of my sequestration order?
13 MR. RIDEN: So I'll give you a list of everybody who
14 is here for the plaintiff, if you don't mind, Your Honor. We
15 can go through who should be sequestered.
16 THE COURT: Okay.
17 MR. RIDEN: In attendance in the courtroom right now
18 are Marianne Short, chief legal officer of Optum; Mike Weissel,
19 who is the vice president of product and strategy for Optum;
20 and also Matthew Shores, who is the chief litigation counsel
21 for Optum. And also in the wings we have, for Optum we have
22 Nick Seddon. He is somebody that can speak to the facts of
23 this case. Steve Wolin, who is a potential witness identified
24 by yourself, Your Honor, and Christopher Andrews, who is also a
25 potential witness you had identified.

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1 THE COURT: Well, I think my intention was that
2 anybody who is a potential witness be sequestered, except you
3 have the right to designate a representative of Optum to be in
4 the courtroom at all times. Do you know who you would like to
5 be the Optum -- and I wouldn't -- I assume that the two lawyers
6 you just mentioned are not potential witnesses; is that right?
7 MR. RIDEN: That's correct, Your Honor. And both
8 potential lawyers, if they could stay in the room, that would
9 be great. I'd also like to identify Matthew Starts [phon], who
10 is from Optum as well and not a witness.
11 THE COURT: All right.
12 MR. RIDEN: Mr. Weissel would like to testify, if
13 possible. He is sitting in the courtroom.
14 THE COURT: All right. Well, all of the potential
15 witnesses, so that's Wolin, Andrews and who are the other --
16 MR. RIDEN: Mr. Weissel.
17 THE COURT: Wasn't there another one?
18 MR. RIDEN: Yes, sir. That would be Nick Seddon.
19 THE COURT: They should go out of the courtroom. Did
20 you give them the order I issued yesterday, telling them --
21 although I didn't name them -- that they shouldn't be talking
22 to each other about this case?
23 MR. RIDEN: Short answer is yes, Your Honor.
24 THE COURT: Thank you.
25 MR. RIDEN: I'm asking Mr. Weissel to leave the

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1 courtroom.
2 MR. SHEEHAN: Your Honor, Mr. Smith is going to be the
3 representative for himself and we ask that he be kept in the
4 courtroom.
5 THE COURT: Yes.
6 MR. SHEEHAN: With regard to the long list of names of
7 potential witnesses, I know that we would object to the
8 presentation of testimony by any witness other than those
9 specifically who presented affidavits.
10 THE COURT: We'll cross that bridge when we get to it.
11 But that's -- so there's Mr. Smith and Mr. Stoddard. Mr.
12 Stoddard is not here. Did you give Mr. Smith and Mr. Stoddard
13 the order I issued yesterday about prohibiting potential
14 witnesses from discussing the case?
15 MR. SHEEHAN: They've been so admonished.
16 THE COURT: And I didn't put Mr. Welsh on the
17 potential witness list because, although he provided an
18 affidavit, the Supreme Judicial Court Rule 3.07 says a lawyer
19 can't be an advocate at a trial if he's likely to be a
20 necessary witness, and Mr. Welsh signed the pleading.
21 So do you anticipate that you want to -- you may want
22 to call Mr. Welsh as a witness? Because if he is, he shouldn't
23 be a lawyer arguing this matter in front of me, I think, but
24 I'll hear you on that.
25 MR. SHEEHAN: No, your Honor. I don't anticipate

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1 Mr. Welsh will be a witness. I do anticipate -- I don't know
2 what to anticipate about today. But in this matter, I do
3 anticipate that it's very possible that Ms. Short would be a
4 witness.
5 THE COURT: All right. Well, the plaintiff has a
6 right to designate even a potential witness to represent the
7 company for the purposes of the sequestration order.
8 MR. SHEEHAN: Is that who they have identified?
9 THE COURT: Why don't we clarify that. Would you like
10 her to be the representative?
11 MR. RIDEN: Yes, Your Honor. We'd like to have her
12 here in the courtroom.
13 THE COURT: She's the representative for the purposes
14 of the sequestration order although I didn't, I think, in the
15 order cite the rule permissible under the rule relating to the
16 sequestration order.
17 Okay. But if she is a potential witness -- we'll talk
18 about how to deal with that if necessary later. So on January
19 22, 2019, I ordered that a representative of the plaintiff with
20 full settlement authority be here. Who is that?
21 MR. RIDEN: For our side, Your Honor, it's
22 Mr. Weissel.
23 THE COURT: Okay.
24 MR. RIDEN: I do want to point out, Your Honor, that
25 to the extent that the defendant wants to designate our chief

9
1 legal officer as a witness, that would also mean that their
2 general counsel for ABC would also be designated as a witness
3 as well because that's where the communications were taking
4 place pre-litigation, Your Honor.
5 THE COURT: Okay. Well, I don't think that's a matter
6 of immediate importance, but you can remind me of it if and
7 when we get to that point.
8 MR. RIDEN: And she is here, Your Honor. And there is
9 one other witness I believe on your list. That is Caitlin
10 Fleming. I don't know if she is here or not.
11 MR. SHEEHAN: She is here, Your Honor.
12 THE COURT: All right. I thought I'd ask. And are
13 those witnesses outside the courtroom now, the potential
14 witnesses? If they're not outside the courtroom they should
15 leave.
16 MR. RIDEN: Our folks are outside, yes, Your Honor.
17 MR. SHEEHAN: Yes, they are, Your Honor.
18 THE COURT: Thank you. All right. I believe the
19 pending motions are the plaintiffs' motion for temporary
20 restraining order, the plaintiffs' motion for limited
21 discovery, the defendant's motion to compel arbitration, and as
22 part of that, to allow the arbitrator to decide whether a
23 temporary restraining order should issue.
24 Are there any other pending motions that I should plan
25 to address?
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1 MR. RIDEN: No, Your Honor.
2 MR. SHEEHAN: None.
3 THE COURT: Well, I think the threshold question is
4 whether the court has the authority to issue a temporary
5 restraining before compelling arbitration. I think the parties
6 are in agreement that this dispute has to go to arbitration
7 pursuant to the agreement, Mr. Smith's agreement with Optum.
8 The question is whether the court has the authority to
9 issue a temporary restraining order to in effect preserve the
10 status quo -- well, not preserve the status quo but preserve
11 potential efficacy of the arbitration should the arbitrator,
12 for example, decide that Mr. Smith is prohibited from working
13 with ABC Corporation.
14 My tentative view is that I do have that authority;
15 the recent Schein decision doesn't alter the legal landscape
16 which in the First Circuit is characterized in the Teradyne
17 decision.
18 As I understand it, the employment agreement in this
19 case provides that it's to be interpreted under Delaware law
20 and -- but from what I've found, Delaware law is the same, and,
21 as I said, it's my tentative view that Schein doesn't change
22 the legal landscape. Among other things, it says that
23 contracts are to be interpreted as written. But I'm interested
24 in hearing your argument. Since it's the defendant's assertion
25 that the authority doesn't exist to issue the TRO in this

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1 court, I'd like to hear from you first.
2 MR. SHEEHAN: Yes, Your Honor. Thank you.
3 We would agree that Schein does not overrule the
4 Teradyne principle that courts have the authority to decide or,
5 you know, whether or not preliminary injunctive or temporary
6 relief is permissible or should be granted when that authority
7 has not been delegated under the arbitration contract to
8 arbitration.
9 And that's where this case is not controlled by
10 Teradyne. Rather this case is controlled by the most recent
11 Supreme Court case of Schein. We have to start with the policy
12 language itself. And the policy language itself expressly
13 delegates issues of arbitrability to the arbitrator in the
14 first instance. So whereas in Teradyne that language was not
15 present in the policy, it was certainly appropriate and
16 permissible, and the court held that the court had authority to
17 determine that issue of arbitrability.
18 Here, the contract drafted by the plaintiffs clearly
19 states that claims covered by the policy are these claims, and
20 refer to competition and violations of trade secrets. It
21 further states, and I'll quote, "All disputes covered by the
22 policy shall be decided by an arbitrator through arbitration
23 and not by way of a court or a jury." That's an express
24 delegation of issues of arbitrability to the arbitrator.
25 THE COURT: So you're reading the UnitedHealth Group

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1 Arbitration Policy. It's docket number 25-1 in this case. Was
2 that what you're referring to?
3 MR. SHEEHAN: Yes, Your Honor. And what Schein
4 teaches us is that when that language is in the contract, the
5 parties are free to draft the contract however they see fit.
6 Here, they drafted it this way. The issue of arbitrability is
7 in the first instance for the arbitrator. So what that means
8 here --
9 THE COURT: Don't I have to read the whole contract?
10 What's the import of the language that says, "In addition, this
11 policy does not preclude either an employee or UnitedHealth
12 Group from seeking emergency or temporary injunctive relief in
13 a court of law in accordance with applicable law; however,
14 after the court has issued a ruling concerning the emergency or
15 temporary injunctive relief, the employee and UnitedHealth
16 Group are required to submit the dispute to arbitration
17 pursuant to this policy."
18 MR. SHEEHAN: And it is the question when Your Honor
19 asks, but it is the question for the arbitrator because the
20 policy also states, and I quote, "Covered claims include any
21 disputes regarding the policy or any portion of the policy or
22 its interpretation" --
23 THE COURT: But how --
24 MR. SHEEHAN: -- "enforceability." And it goes on to
25 say, "And however groundless one party or the other party's

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1 argument may be as to the interpretation of that policy." The
2 answer to Your Honor's question is only for the arbitrator in
3 the first instance.
4 THE COURT: That's however groundless. That was the
5 issue in Schein. And the issue there was, was the dispute
6 arbitrable, and even if there was a groundless claim that it
7 was arbitrable, the arbitrator had to decide it. That was
8 Schein. But here, in my current conception, this policy is not
9 ambiguous. The sentences I just read reference applicable law,
10 Delaware law is the same as Massachusetts law, same as the law
11 throughout most of the country, that to preserve the potential
12 for the arbitrator to provide relief, a court can provide a
13 temporary injunctive relief until the arbitration gets going.
14 MR. SHEEHAN: And we don't argue that, Your Honor, and
15 that is Teradyne.
16 THE COURT: I'm talking about Schein. I'm sorry. Go
17 ahead.
18 MR. SHEEHAN: Here, unlike in Schein -- here, unlike
19 in Teradyne, and I think squarely as in Schein, what we have is
20 a policy that says any question as to the interpretation of the
21 policy. And the question here is when they drafted the policy
22 and permitted for temporary injunctive relief, what did that
23 mean? That's the question.
24 THE COURT: Well, it means something.
25 MR. SHEEHAN: It means something.

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1 THE COURT: Okay. And what could be more
2 quintessential temporary injunctive relief than a request for a
3 temporary restraining order?
4 MR. SHEEHAN: A motion to the court to compel
5 arbitration, certainly. That would be the immediate --
6 THE COURT: That's not temporary. That's not
7 temporary. It's permanent. When I order arbitration in this
8 case, and I don't think there's any dispute that I should, and
9 therefore I think it's predictable that I will, that's
10 permanent. That's not to go arbitrate for a week or two.
11 That's, this case is referred to arbitration. Either I will
12 dismiss it or I will stay it to see if there's an appeal from
13 the arbitrator's decision.
14 MR. SHEEHAN: And I think the more routine is the
15 stay, so there still is a matter in court. I think what we
16 have here is the question that Your Honor poses and the
17 question that plaintiffs' policy delegates squarely to the
18 arbitrator would be put to the arbitrator in the first
19 instance. And there are mechanisms under AAA to have that
20 heard quickly.
21 In fact, had they abided by their agreement to go to
22 arbitration, they could have -- we could have convened an
23 arbitrator to address that question and answer that question
24 weeks before this hearing. And there's no question that that
25 relief is available, and the answer could have been put to the
15
1 arbitrator, and the arbitrator could have answered the question
2 several ways. One being, you can go to court and seek that.
3 That's my interpretation. But that's what Schein says. Schein
4 says, even if this argument is something that the court doesn't
5 agree with, it's not for the court to decide.
6 THE COURT: Well, the question in Schein was whether a
7 particular dispute was arbitrable; is that correct?
8 MR. SHEEHAN: As here, yes, that's correct.
9 THE COURT: Not at the moment my view "as here."
10 Because at the moment it doesn't to appear to me that the
11 contract is ambiguous.
12 So I want to give you a chance to address this. I
13 don't know how long you'll be before me, but I try to be
14 transparent because I want to hear what you have to say. So
15 Schein says, in part, "We have held that parties may agree to
16 have an arbitrator decide not only the merits of a particular
17 dispute but also the gateway questions of arbitrability such as
18 whether the parties agree to arbitrate or whether their
19 agreement covers a particular controversy."
20 In this case the parties -- in the present case,
21 Optum, the parties agree that the contract requires
22 arbitration. The Supreme Court also said, "We must interpret
23 the act as written, and the act in turn requires that we
24 interpret the contract as written." And Schein didn't address
25 language similar to the two sentences I just read you

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1 concerning the authority of either side to seek temporary
2 injunctive relief, emergency injunctive relief, before the
3 matter is ordered to arbitration.
4 So at the moment that doesn't appear to me to be
5 ambiguous. I have to interpret the contract as it's written,
6 and I have to decide whether Optum is entitled to a temporary
7 restraining order.
8 MR. SHEEHAN: Your Honor, if I may, first of all, the
9 contract was written by the plaintiffs, so if I'm able to
10 persuade the court that there's any ambiguity, of course it
11 should be construed against --
12 THE COURT: Well, ambiguity under Delaware and
13 Massachusetts law is defined as, "Under Delaware law, clear and
14 unambiguous language in a contract should be given its ordinary
15 and usual meaning. Mere disagreement between the parties as to
16 a contract's meaning does not render a contract ambiguous."
17 That's a case CIF Licensing, LLC. "Under Delaware law, the
18 ambiguous term is defined as a term susceptible to two
19 reasonable alternative interpretations." And at the moment I
20 don't see how the contract could be any more clear that the
21 parties were preserving the sort of Teradyne principle.
22 MR. SHEEHAN: That's where I think, Your Honor, it
23 could have been more clear. Here is what could have been
24 drafted. And the contract itself is evidence that this is how
25 it could have been drafted and plaintiff knew it.

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1 There's an express carveout in the arbitration policy
2 for class action waivers. They knew how to carve out from the
3 broad delegation in the arbitration policy what they wanted to
4 have a court decide. And here, if what they -- if what
5 plaintiff meant and what they wanted to do was preserve the
6 right to come into court and have the court in the first
7 instance grant temporary restraining order relief and address
8 issues of the interpretation of what powers, if any, does the
9 court retain when there's a delegation clause, it could have
10 done so. It could have drafted -- and when a party, either
11 party seeks temporary injunctive relief in that instance, the
12 court retains the authority to interpret its powers and what
13 relief would be appropriate in court. It didn't do that.
14 And that's why Schein controls here. Schein, the
15 contract interpretation cases, whether Delaware or
16 Massachusetts that are aligned, have to be read in the context
17 of the FAA. And they have to be read in the context of the
18 controlling federal authority under the FAA and most recently
19 the Schein case. And Schein mandates that when the parties
20 contract to delegation to an arbitrator of everything including
21 issues of interpretation of arbitrability, and we've raised
22 that issue, then that issue must go to the arbitrator.
23 THE COURT: Okay. Thank you. What is Optum's
24 response?
25 MR. BECK: Your Honor, for the reasons you identified,

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1 we agree. Schein does not control. This is a narrow issue,
2 and we're on the issue of the threshold question of the Court's
3 power, and it's specifically permitted in the contract. Either
4 way you get there. So we agree with Your Honor.
5 THE COURT: All right. Well, this argument -- I've
6 thought about this issue a good deal. As you know, I raised it
7 when I received the motion to compel arbitration, and the
8 argument has tested but not changed my tentative thinking.
9 I find that I do have the authority to issue a
10 temporary restraining order if it's justified. In Schein,
11 decided by the Supreme Court earlier this month, the Supreme
12 Court held that when the issue was whether the dispute was
13 subject to being arbitrated, an arbitrator had to decide that
14 issue, at least, first even if the judge thought that the
15 argument that the dispute was arbitrable was groundless, but
16 that's not the issue in this case. The parties agree that this
17 is a dispute subject to arbitration.
18 The Supreme Court wrote in Schein, "We must interpret
19 the [Federal Arbitration] Act as written, and the Act requires
20 that we interpret the contract as written." The contract in
21 this case is the Employment Arbitration Policy the defendant
22 signed. It's docket number 25-1. It provides that claims for
23 unfair competition and violations of trade secrets must be
24 arbitrated. This case involves such claims.
25 The contract also expressly states, "This Policy does

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1 not preclude either an employee or the company from seeking
2 emergency or temporary injunctive relief in a court of law in
3 accordance with applicable law. However, after the court has
4 issued a ruling concerning the emergency or temporary
5 injunctive relief, the employee and the company are required to
6 submit the dispute to arbitration pursuant to the Policy."
7 The defendant claims this provision does not give this
8 court the authority to issue a temporary restraining order
9 before ordering arbitration. Plaintiff disagrees. The
10 defendant argues that the contract gives the arbitrator the
11 authority to interpret the contract, and therefore the issue of
12 whether the court can issue a TRO should be referred to the
13 as-yet unidentified arbitrator. This contention is not
14 correct.
15 The contract provides that it is governed by Delaware
16 law. That's paragraph 15 of docket 1-1. Under Delaware law,
17 clear and unambiguous language in a contract should be given
18 its ordinary and usual meaning. Mere disagreements between the
19 parties as to a contract's meaning does not render a contract
20 ambiguous, the District Court in Delaware wrote in CIF
21 Licensing, LLC, 2012 Westlaw 6085368, quoting and citing a
22 Delaware state case.
23 Under Delaware law, an ambiguous term is defined as a
24 term susceptible to two reasonable alternative interpretations,
25 as the District Court in Delaware said in Falkenberg,

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1 923 F. Supp. 231 at 236. In this case, the pertinent provision
2 of the contract is not ambiguous. It clearly provides that a
3 court may issue temporary injunctive relief and the dispute
4 must be submitted to arbitration after the court decides
5 whether to do so in accordance with applicable law.
6 The contract is not ambiguous. It does not require
7 interpretation. Rather -- there's no legitimate dispute
8 created by an ambiguity that should go to the arbitrator.
9 Rather, this court, like the Supreme Court, must interpret the
10 contract as written.
11 Relying on the First Circuit decision interpreting
12 Massachusetts law in Teradyne, 797 F. 2d 43 at 51, the Third
13 Circuit has held that under Delaware law, the Federal
14 Arbitration Act authorizes courts to issue temporary injunctive
15 relief because the Congressional desire to enforce arbitration
16 agreements would frequently be frustrated if courts were
17 precluded from issuing preliminary injunctive relief to
18 preserve the status quo pending arbitration and ipso facto the
19 meaningfulness of the arbitration process. That's the Third
20 Circuit in Ortho Pharmaceutical, 882 F. 2d 806 at 812, quoting
21 Teradyne at page 51.
22 The First Circuit case Next Step, 619 F. 3d 67 at 70, is
23 also instructive. I believe, although I haven't looked for a
24 case, that the Third Circuit would agree with Next Step as it
25 agreed with Teradyne.

21
1 In Next Step, the First Circuit wrote that under American
2 Arbitration Association, AAA, rules, arbitrators can provide
3 temporary injunctive relief. However, even where preliminary
4 relief is for the arbitrator, the District Court retains the
5 power to grant an interim preliminary injunction for the
6 interval needed to resort to the arbitration -- that is for the
7 period between the time that the District Court orders
8 arbitration and the time the arbitrator is set up and able to
9 offer interim relief itself. And the First Circuit cites
10 Teradyne for that conclusion.
11 So in view of the foregoing, I find that this court has
12 the authority to issue a temporary restraining order, if
13 justified.
14 So next I'd like to try to assure that we have a clear and
15 common sense of the grounds on which the temporary restraining
16 order is being sought.
17 MR. SHEEHAN: Your Honor, if we are -- if the court is
18 inclined to proceed now to the motion for temporary restraining
19 order --
20 THE COURT: I am proceeding to that.
21 MR. SHEEHAN: Then I would first like to make a
22 motion.
23 THE COURT: What's that?
24 MR. SHEEHAN: In light of the court's ruling -- and
25 first, there were different levels of relief that plaintiff was

22
1 seeking. And I take from the court's comments that it agrees
2 that issues of discovery or anything beyond temporary
3 restraining order --
4 THE COURT: No. I'm going to go over all of this with
5 you. What's the motion?
6 MR. SHEEHAN: The motion is to stay these proceedings
7 so we can make our interlocutory appeal of the court's denial
8 of our --
9 THE COURT: I don't believe that's an appealable
10 order. A temporary restraining order is not an appealable
11 order.
12 MR. SHEEHAN: The denial of our motion to compel
13 arbitration under Schein is immediately appealable under the
14 Federal Arbitration Act, and it's immediately appealable under
15 9 U.S.C. 16.
16 THE COURT: Can you print that out?
17 MR. SHEEHAN: 9 U.S.C. 16, Your Honor, federal
18 appellate --
19 THE COURT: Do you have an appeal prepared? Are you
20 prepared to file one right now?
21 MR. SHEEHAN: We have 30 days to file notice of
22 appeal, but we would do so promptly, and we would follow
23 whatever direction the court gave to meet whatever timeline
24 would be necessary to file that appeal. We will do it
25 forthwith, but we weren't prepared to do it before the court

23
1 ruled.
2 MR. BECK: This is obviously a surprise. However, you
3 haven't denied their motion to compel arbitration. This case
4 is going to arbitration. The only thing you're deciding is
5 whether you have the power to grant a temporary restraining
6 order at this point. There's nothing being denied with regard
7 to arbitrability.
8 THE COURT: I haven't looked into that question. It
9 wasn't raised or foreshadowed. The argument here is that the
10 plaintiff is being irreparably harmed by a violation of
11 contract and statutes. So if you file a motion with a
12 memorandum as required by Local Rule 7.1, seeking a stay of
13 these proceedings, and then the defendant and the plaintiff
14 responds, I'll stay the proceeding. But the way to make a
15 motion -- are you admitted pro hac vice in this case?
16 MR. SHEEHAN: Yes, I am, Your Honor.
17 THE COURT: And you've represented that you're
18 familiar with the local rules of the District of Massachusetts?
19 MR. SHEEHAN: Yes, I am.
20 THE COURT: So Local Rule 7.1 requires that a motion
21 be filed, that it be supported by a memorandum of law and an
22 affidavit. You foresaw this, because you popped right up, and
23 made your oral motion. If Mr. Welsh or one of your colleagues
24 wants to go and work on it, he can. But if you file a motion
25 in the manner required by the local rule, I'll consider it.

24
1 MR. SHEEHAN: Well, we'd ask if we could take a short
2 recess and we'll do that, Your Honor.
3 THE COURT: No. You could have come in with it.
4 MR. SHEEHAN: Well, that would have been premature,
5 Your Honor. We didn't know how the court was going to rule,
6 what the court was going to rule. And what counsel has said
7 about Your Honor's ruling, I disagree with.
8 If we filed the motion to compel all of the issues
9 before the court, including the issue of whether or not the
10 court can make a determination on a temporary restraining
11 order, with all due respect, if the court proceeds, we will be
12 harmed.
13 Mr. Smith is a party to a contract that states as a
14 material term confidentiality. He's already been harmed. He's
15 already been harmed by their filing, by their ignoring the
16 arbitration policy, filing a public complaint and then feeding
17 that complaint to the press, setting forth allegations which
18 truly are groundless, which truly are groundless as their
19 papers show, and to continue --
20 THE COURT: Well --
21 MR. SHEEHAN: -- what is really a fishing expedition
22 by Optum --
23 THE COURT: Here. Let me ask you this. Because I'm
24 trying to get -- the next thing I was going to do is try to
25 make sure we had a clear and common sense of the question of

25
1 the temporary restraining order. What is your law firm?
2 What's the name of your law firm?
3 MR. SHEEHAN: McDermott, Will & Emery.
4 THE COURT: How many lawyers are in your law firm?
5 MR. SHEEHAN: A little over a thousand, Your Honor.
6 THE COURT: Right. And how many have worked on this
7 case?
8 MR. SHEEHAN: Not anything close to that. Maybe five,
9 six.
10 THE COURT: Okay. And three of you are here, and two
11 or three of you are not here. As I told you, as I said, your
12 colleagues can go. I'll excuse them. You're able, evidently,
13 very able, but this is a question of alleged irreparable harm.
14 And do you have the statute?
15 MR. SHEEHAN: Your Honor, I would ask if the court's
16 prepared to convene tomorrow morning --
17 THE COURT: No. I actually -- I was only
18 accommodating Mr. Stoddard because I really spent all day
19 yesterday on it.
20 MR. SHEEHAN: Your Honor, you've got the rule. It's
21 specifically at 9 U.S.C. 16, provision (a)(1)(B), an appeal may
22 be taken from an order --
23 THE COURT: Well, I haven't issued an order refusing a
24 stay. I haven't been given a motion and a memo. I haven't
25 denied the stay. I don't have a proper motion in front of me,

26
1 so I haven't acted on it. I said you could file the motion in
2 the manner required by Rule 7.1.
3 MR. SHEEHAN: But what is immediately appealable is
4 the denial of the motion to compel arbitration.
5 THE COURT: I haven't denied a motion to compel
6 arbitration. I'm going to grant it, but I think the contract
7 contemplates that I first decide whether temporary injunctive
8 relief is justified.
9 MR. SHEEHAN: And that's in effect a denial in part of
10 our motion to compel arbitration. Our motion to compel
11 arbitration wasn't as to simply compel the discovery, you know,
12 requests that went directly counter to the arbitration policy
13 or further proceedings towards a preliminary injunction.
14 Our motion to compel arbitration is to compel every
15 request for relief they seek because it's a matter for the
16 arbitrator. And I understand Your Honor does not accept our
17 view on that, but to proceed any further is effectively to deny
18 that motion. And that's where we ask the court stay the
19 proceedings. We will take immediate appeal to the First
20 Circuit.
21 MR. BECK: I'm trying to read it as we're arguing. I
22 would appreciate the opportunity to read a brief and conference
23 before the motion is filed.
24 That being said, Your Honor, again, I would go back
25 to, you are in fact granting -- at some point you've indicated

27
1 that already -- the motion to compel. We are at the issue
2 right now, recognizing, as in Cell Info and as in Teradyne, the
3 fact that this court has inherent powers separate from the
4 issue of determining arbitrability, which is a separate issue.
5 You are allowed to grant injunctive relief. You can do that
6 now. You can do that and allow them to appeal. You are not
7 obligated to stay that decision.
8 In the meantime, we will be irreparably harmed. We
9 will get to that at the TRO hearing. And this is all an effort
10 to try to prevent us from getting TRO relief. It started with
11 the motion to compel arbitration. We've never said we won't go
12 to arbitration, but we are entitled to injunctive relief. And
13 now it's an effort to stop the court from granting that same
14 relief and forcing us to go up to the First Circuit, which will
15 take however long that will take, all while we continue to be
16 irreparably harmed. The whole purpose of the Federal
17 Arbitration Act will be undermined by this, and it is
18 absolutely not what the law requires. The court has inherent
19 power to grant the injunction.
20 THE COURT: It's not a question of actually my
21 inherent power. It's the authority I have under the
22 unambiguous contract, I think.
23 MR. BECK: And I agree with that as well, Your Honor.
24 You draw power from both places. Because if you look at
25 Teradyne and you look at Cell Info, they also do talk about --
28
1 THE COURT: What case is that?
2 MR. BECK: Cell Info, Judge Young's recent decision on
3 arbitration. It's cited in our brief. There's no cite yet.
4 Steve will get the Westlaw cite for you, Your Honor. It's not
5 yet reported in the Federal Reporter. All that to say, Your
6 Honor --
7 MR. SHEEHAN: I'm happy to provide that cite for Cell
8 Info. It's right here. If you could give that back.
9 MR. BECK: 2018 Westlaw 6682798.
10 THE COURT: Well, I --
11 MR. BECK: We can provide a copy to Your Honor if
12 you'd like one. Regardless, under the language of the
13 contract, this is a very straightforward temporal issue. We
14 have the right to come to court, and then the case goes to
15 arbitration -- to arbitration.
16 MR. SHEEHAN: Your Honor, if I may, first, Cell Info
17 is a case that actually supports our case. It's an interesting
18 opinion by Judge Young to read.
19 There, the only reason a court entertained the issue
20 of preliminary injunctive relief was because the parties agreed
21 to do that. In fact, Judge Young I think comments in his
22 opinion, I don't know why they did, but they did.
23 The court recognized if it's delegated to the
24 arbitrator, then it's delegated to the arbitrator. It's
25 actually consistent with Schein. Schein simply clarified that

29
1 any issue of arbitrability, if there's a delegation clause,
2 must go to the arbitrator. Your Honor, I'd like to put just
3 some real world context on the issue of irreparable harm if I
4 may.
5 THE COURT: Hold on one second. Have a seat.
6 We may take a break at some point but not at this
7 point. Have a seat. Do you want to excuse -- how many lawyers
8 are sitting at that table with you?
9 MR. SHEEHAN: Three of us. I'd like to excuse
10 Mr. Mead temporarily so he can go out and get someone else to
11 get to work on our motion. All right?
12 THE COURT: That's fine. He can go.
13 MR. SHEEHAN: May I just say, we would agree, we would
14 agree on the record, we represent to the court that at the very
15 same time the court issues its stay and we take our appeal to
16 the First Circuit, we will also join plaintiff to move as fast
17 as possible to arbitration. We would be there faster than they
18 got to this court.
19 THE COURT: Fine. You've been to mediation. I wish
20 you would reach an agreement to resolve this. The thing you
21 might want to talk about, just off the top of my head, agreeing
22 on is that Mr. Smith will not work for ABC or communicate with
23 anybody at ABC until your appeal is decided. But otherwise, I
24 know they're going to argue to me that they're enduring
25 continuous irreparable harm. And I'm agnostic on that right

30
1 now. But anyway. Have a seat.
2 All right. I want to try to understand the issues or
3 try to assure there's a -- hold on a second -- a common
4 understanding of the issues that are involved in the motion
5 to -- motion for temporary restraining order.
6 One, the restrictive covenants that are part of -- the
7 parties agree, I think, is a contract are -- may be in more
8 than one document, but they're in docket number 1.1, the
9 UnitedHealth Group nonqualified stock option award. And as I
10 understand it, Optum alleges a violation of the noncompete
11 provision of the agreement, which is section 4C, which says
12 that the defendant is prohibited from engaging in activity that
13 competes directly or indirectly with any company, activity,
14 product or service that the defendant engaged in or
15 participated in or had confidential information about during
16 the defendant's last 36 months of employment with the company.
17 Is that one of the grounds on which you're seeking the
18 TRO?
19 MR. RIDEN: That is correct, Your Honor, those four
20 agreements.
22 MR. RIDEN: Those four agreements, yes.
23 THE COURT: It's in four agreements?
24 MR. RIDEN: It's in four agreements.
25 THE COURT: Okay. And then you're alleging another

31
1 breach of contract, violation of paragraph 4, section 4A, which
2 creates a contractual duty not to disclose or use Optum's
3 confidential information, correct?
4 MR. RIDEN: That's correct, Your Honor.
5 THE COURT: In addition, am I correct that you're
6 relying on an alleged violation of the federal -- well, you're
7 alleging misappropriation of trade secrets in violation of the
8 federal -- I think it's called Defense of Trade Secrets Act, 18
9 United States Code, section 1832?
10 MR. RIDEN: Correct, Your Honor.
11 THE COURT: And in addition, you're relying on --
12 alleging a violation of Mass. General Laws Chapter 93, section
13 42, misappropriation of trade secret, in violation of that
14 statute?
15 MR. RIDEN: That's correct, Your Honor. It's also
16 known as the Massachusetts Uniform Trade Secrets Act.
17 THE COURT: And under that Act, as I read it,
18 misappropriation in section 42-2(ii) includes an act of
19 disclosure or use of a trade secret of another without that
20 person's express or implied consent in certain circumstances
21 not in dispute here.
22 And then with regard to injunctive relief, section
23 42A(a), it says that, "Actual or threatened misappropriation
24 may be enjoined upon principles of equity, including but not
25 limited to consideration of prior party conduct in

32
1 circumstances of potential use upon a showing that information
2 qualifying as a trade secret has been or is threatened to be
3 misappropriated."
4 So what I'm aiming to get at here is, in your briefs
5 there was dispute as to whether inevitable disclosure would be
6 sufficient to prove a reasonable likelihood of success on the
7 merits before getting to the issue of irreparable harm. But it
8 appears to me under the statute and the parties' -- that this
9 statute does not appear to require evidence of actual use to
10 satisfy the reasonable likelihood of success on the merits
11 standard as the contract claim may, although the parties cited
12 Massachusetts law in the contract claim, and I think Delaware
13 law might apply, but presumably -- it's contract law.
14 Presumably they're the same or materially the same.
15 So there was the Manganaro case that was cited, 2018
16 Westlaw 5077180, for the proposition that a breach of
17 contract -- for breach of contract claims, it's not sufficient
18 to prove only a likely potential disclosure of confidential
19 information.
20 So basically my question is, it seems to me, looking
21 at this, that the Massachusetts statute may be more favorable
22 to the plaintiff than contract law. You would have a long --
23 there would be an issue about what is sufficient in contract
24 law. And of course I have no idea what the evidence, what
25 facts I'll find. But it seems to me that it would be most

33
1 appropriate for the disclosure of confidential information
2 claim to focus on the Massachusetts statute and see if there's
3 a reasonable likelihood of success on the claim that the
4 Massachusetts statute has been violated. If the plaintiff
5 doesn't bear its burden of doing that, it would also not be
6 able to bear its burden with regard to the federal statute or
7 the contract claim.
8 MR. RIDEN: I think that's fair, Your Honor.
9 THE COURT: And Mr. Sheehan, do you want to be heard
10 on that?
11 MR. SHEEHAN: I would agree that if the plaintiff is
12 unable to make its claim under the Massachusetts Trade Secret
13 Act, it's very unlikely that it could make its claim under
14 either a breach of contract claim or Mass. Trade Secret Act.
15 I've just never looked at it that way, Your Honor.
16 THE COURT: This may sound a little theological, but I
17 try to be careful and thorough, and it seems to me that we
18 finally all agree on something. All right. But that's -- so
19 for the disclosure of trade secrets, that's the statute or
20 that's the -- you know, the standard that I intend to focus on
21 and you should have in mind.
22 Now, as I understand it, the plaintiff is not seeking
23 a temporary restraining order based on an alleged violation of
24 Mr. Smith's contractual duty not to solicit Optum employees,
25 although evidence of whether he violated his contract with

34
1 regard to Ms. Fleming would be part of the whole story. And
2 since the TRO is an equitable remedy, something that could be
3 considered, but that's not something you're going to have to
4 prove a reasonable likelihood of success on. Do you agree with
5 that?
6 MR. RIDEN: That's correct, Your Honor. There's smoke
7 but no fire yet on that point.
8 THE COURT: All right. So I think that helps define
9 the questions. Then -- you can be seated.
10 All right. Then with regard to the standards for
11 obtaining a temporary restraining order, I think the parties
12 agree with them, have a common understanding of them, but I'll
13 make a couple of points.
14 The burden of proof is proving that a temporary
15 restraining order is justified. It's on the plaintiff. There
16 are four factors that have to be considered. The first is
17 whether the defendant -- the plaintiff has shown a reasonable
18 likelihood of succeeding on the merits. The second is whether
19 the plaintiff has established an imminent threat of irreparable
20 harm in the absence of a temporary restraining order. The
21 court is also required to balance the hardship to the plaintiff
22 if no injunction is issued against the hardship to the
23 defendant if the requested injunction is ordered. In addition,
24 the court must consider the effect of the proposed injunction
25 on the public interest. And as the First Circuit has

35
1 repeatedly said, the likelihood of success on the merits is of
2 primary importance. It's the sine qua non for obtaining a
3 preliminary injunction.
4 In addition, a preliminary injunction is an equitable
5 remedy, so even if the foregoing criteria indicate an
6 injunction is warranted, it doesn't issue automatically. I
7 have to consider any equitable or any inequitable conduct by
8 the plaintiff. And although the parties didn't mention it in
9 their briefing, if I find a TRO is justified, the plaintiff
10 must post a bond to compensate the defendant if he's found to
11 have been wrongfully restrained. That's Federal Rule of Civil
12 Procedure 65(c).
13 So if it gets to that point, I'll need information or
14 evidence, you know, on the economic effect on Mr. Smith -- you
15 know, what the appropriate amount of a bond would be.
16 All right. Does anybody have any comments or concerns
17 about that articulation of the applicable standard?
18 MR. RIDEN: No, Your Honor.
19 MR. SHEEHAN: No, Your Honor.
20 THE COURT: All right. Well, I had scheduled this
21 matter for yesterday and carved out time in a demanding docket
22 for it. I was asked -- was I asked by the defendant or the
23 plaintiff to start today instead?
24 MR. RIDEN: By the plaintiff, Your Honor, so we could
25 ensure that we had the decisionmaker with the settlement

36
1 authority in the room. We appreciate it.
3 MR. RIDEN: I should point out that the defendant
4 politely and appropriately --
6 MR. RIDEN: The defendant assented. We appreciate
7 that.
8 THE COURT: All right. Well, I'm interested in
9 hearing your arguments on this. And unsurprisingly, you're
10 astute lawyers, you inferred from the fact that I ordered the
11 witnesses to be here that I might want to hear testimony. And
12 I do want to hear your argument, but from my reading of the
13 affidavits and briefs, I get starkly different descriptions of
14 what Mr. Smith did for Optum, what he's doing or may be doing
15 for ABC, and at least at the moment there are a lot of
16 unanswered questions.
17 So while I'm interested, definitely interested in
18 hearing your argument, because many times motions for temporary
19 restraining orders are resolved on affidavits, at the moment, I
20 think that may not be sufficient. It's the plaintiffs' motion,
21 and you have the burden.
22 MR. RIDEN: So I think it would be helpful just to get
23 a little background about Optum and what Optum does before we
24 dive into ABC and Mr. Smith.
25 From a very high level, Optum is a health service and

37
1 innovation company, and it's --
2 THE COURT: Can you hold on one second.
3 MR. RIDEN: Yes, Your Honor.
4 THE COURT: Okay.
5 MR. RIDEN: As a threshold matter, Your Honor, I want
6 to go back just a little bit to something that you suggested to
7 the parties, and I want to state that the -- I think we would
8 be perfectly amenable to stipulating to keep Mr. Smith out of
9 ABC during the pendency of the appeal. That would certainly
10 address a lot of the concerns that we have now. And as we've
11 proposed before, we would happily move this arbitration as
12 quickly as possible. So we're not looking to slow anything
13 down in the process.
14 Back to Optum. It is a significant health care
15 company. It's a global company. It has more -- to put this in
16 context -- than 160,000 employees. It's serviced 124 million
17 individuals, over 200 health plans, and within its system it
18 has 67,000 pharmacies and there are 100,000 physicians in its
19 ambit as well.
20 Its customers significant to this case include JP
21 Morgan Chase and certain subsidiaries of Berkshire Hathaway.
22 Optum has three primarily lines through which it conducts its
23 business. It's the Optum Rx, which deals with classic pharmacy
24 benefits plans. It helps companies negotiate with
25 pharmaceutical manufacturers. It has Optum Health, which is

38
1 providing direct care. It has ambulatory care centers.
2 THE COURT: Actually, hold on just one second. Go
3 ahead.
4 MR. RIDEN: Optum Health is one of the three lines.
5 It provides direct care to patients in various ways. You know,
6 if you have a company who has an employee who needs a kidney
7 transplant, it will help identify where in the country to get
8 that transplant done. And Optum Insight, which is more of the
9 data and analytics side of things, using cutting edge
10 technology, artificial intelligence and machine learning to
11 help companies control their health care costs. And I think
12 what's significant about Optum is it combines these three
13 capabilities together to provide robust services to large and
14 small companies around the world.
15 ABC, we're just learning about ABC in the past year.
16 Obviously it's a health care partnership among Amazon,
17 Berkshire Hathaway and JP Morgan Chase. And up until this
18 lawsuit was filed or the days up, we didn't even know the
19 formal name of ABC, which we now learned is TCORP62018LLC. So
20 we've treated them as the nickname "ABC," which they've used in
21 the press as well. ABC --
22 THE COURT: Hold on just one second. All right.
23 We're back.
24 MR. RIDEN: Thank you, Your Honor. ABC has said very
25 little publicly about what they're doing or what they intend to

39
1 do. From its public statements, we have learned that it has
2 the stated goal of creating solutions that -- I'm quoting --
3 "that benefit the U.S. employees," of those three companies,
4 the founders, Amazon, Berkshire Hathaway and JP Morgan, their
5 families, and then potentially all Americans.
6 Optum views ABC as a competitor both for what it plans
7 to do immediately, servicing Berkshire Hathaway subsidiaries
8 and JP Morgan, and for what it is reportedly working on, a much
9 larger health care company that could compete nationally.
10 I think it's worthwhile to talk about how big those
11 three companies are. This is not a drop in the bucket. Just
12 among Amazon, JP Morgan and Hathaway, we're talking about 1.2
13 million employees of those companies and their families. So
14 just in that slice of the market, you're talking over a million
15 people certainly that would be covered by ABC depending on what
16 they intend to do or what they're doing already.
17 Optum is already dealing with the problems that ABC
18 has publicly announced that it plans to tackle. And
19 particularly Optum has a focus on data analytics and pharmacy
20 care services. And I want to highlight something that
21 Mr. Stoddard said in his affidavit filed in support of the
22 opposition to plaintiffs' motion.
23 THE COURT: Let me just pause you because what are
24 data analytics, and what are pharmacy care services -- you
25 know, what should I know from what's in the evidence? And if

40
1 I'm going to hear some testimony, this is part of what I was
2 hoping would be more fully explained to me.
3 MR. RIDEN: If you hear some testimony, this will be
4 explained in great detail. But data analytics, as far as I
5 understand it, that involves taking a massive set of data
6 information available to Optum by the fact that it has so many
7 people under its care at these large companies. It gets huge
8 reams of data. It's able to take that data and sort it in
9 different ways to figure out where savings might be had, where
10 care might be provided in the most optimal way. They can look
11 at longitudinal information to figure out what sort of
12 treatments are working, which ones aren't, which ones are going
13 to help the longevity, frankly, of these employees who are
14 covered by -- who are getting this information.
15 So it's a lot of very bright computer scientists
16 working behind the scenes, putting together deep analytics of
17 the information, the massive amount of information that's
18 available to Optum. And I think that if you look by comparison
19 to the folks behind ABC, you can see why Optum is concerned
20 because, for instance, with Amazon, they have a very
21 significant data and analytics capability through their
22 services. And by partnering up with both JP Morgan Chase and
23 Berkshire Hathaway, they're able to combine their resources and
24 provide ABC with the ability, presumably the ability to start
25 using that very type of system right away to service the

41
1 employees just in the same way that Optum is of Amazon and
2 Berkshire Hathaway.
3 On pharmacy benefit management, there it's kind of a
4 soup-to-nuts approach for helping companies and their employees
5 deal with pharmacies. So it's everything from managing the
6 mailing of pharmaceuticals -- there's programs now, companies
7 across the country that if you have a prescription that you'll
8 get weekly or monthly packages mailed to you. They're also
9 checking to ensure compliance with prescriptions to make sure
10 that the prescriptions are being taken in an appropriate
11 fashion and also negotiating prices with pharmaceutical
12 companies. And I want to focus on that for just a second.
13 Go ahead, Your Honor.
14 THE COURT: No. Go ahead.
15 MR. RIDEN: Okay. Just focusing on that for a moment,
16 Your Honor, large companies have the market power through the
17 help of companies like Optum to go directly to pharmaceutical
18 manufacturers and negotiate prices for drugs to be provided to
19 employees. The confidentiality of that pricing information,
20 the negotiated prices, is paramount. And if it is publicly
21 known among all the different competitors in the space what
22 each one is paying for a drug, I'm sure Your Honor can surmise
23 that that would be putting pressure on different companies to
24 get different deals.
25 So a lot of companies do this to work out rebate

42
1 programs, and certainly if information about details, pricing
2 information of Optum pharmacy and benefit management plan gets
3 into the hands of a competitor, that would be damaging. We'll
4 get into more of that in a little bit. But Mr. Smith has that
5 information, and our concern is that that information is
6 flowing directly into the hands of ABC.
7 THE COURT: He has information --
8 MR. RIDEN: He knows the information about what types
9 of rebates and the precise rough amounts of what those rebates
10 are for various drugs. So if he's able to go to ABC and
11 provide ABC with the benefit of saying, you know, For drug
12 company X we know that Optum is getting this rebate, we can go
13 negotiate with company X to try to get an even better deal for
14 our clients.
15 That gives ABC or whoever he would be going to work
16 for competitively with a competitive edge, an unfair
17 competitive edge against Optum. And that's what we're trying
18 to prevent, obviously, through this temporary restraining
19 order.
20 Focusing on Mr. Smith for a moment, he's a former
21 executive of Optum. Mr. Smith in his papers has tried to
22 downplay his role at Optum, saying that he was a junior member
23 of the executive team at Optum. In fact, he was hired by Optum
24 in 2016 to be vice president of corporate strategy. Later he
25 became vice president of product. In his offer -- and I'm

43
1 going to tie this directly to what's going on at ABC. His
2 offer to work for ABC stated that his role would be director of
3 product strategy and research. That's a title that essentially
4 is an amalgam of both titles that he had at Optum. Now, at
5 some point before this lawsuit was filed, that title evidently
6 morphed to just director of strategy and research.
7 The significance of Mr. Smith's role within those two
8 sides of Optum, both on corporate strategy and product, it's
9 unique. So he was able to both get insight into Optum's
10 corporate strategy to look down the road to see where it was
11 going and also, on the product side, to understand how Optum
12 plans to price products, prepare products, roll products out to
13 the marketplace and has insight into the pipeline of products
14 at Optum. He's one of the handful of people, I think probably
15 fewer than 50 people, who has access to the type of information
16 from both areas of Optum that would be very interesting to a
17 brand new startup like ABC.
18 He had, to say the least, intimate knowledge of
19 Optum's confidential information and trade secrets. He knew,
20 just to name a few examples, about Optum's products, its
21 business strategies, the profitability of Optum's products,
22 forward-looking plans -- and we'll get to specific examples of
23 him looking at that in a minute -- Optum's capital investment
24 strategy, potential acquisitions, market positioning and market
25 opportunity.
44
1 THE COURT: Is this information in Mr. Wolin's
2 affidavit?
3 MR. RIDEN: It is, Your Honor. This is all in his
4 affidavit. When I'm pointing to information contained in other
5 affidavits, I will specify that.
6 One of the things I wanted to point to about
7 Mr. Stoddard's affidavit, which is interesting, is that with
8 respect to what ABC will be doing in the future -- I understand
9 the defendant's position that ABC is not a competitor and
10 therefore his noncompete doesn't apply. As we've said in our
11 brief, we think that's a fig leaf. Because what is ABC? It's
12 not an everyday, ordinary startup. This is a company that is
13 clearly looking to make direct immediate change with respect to
14 its three founders as well as national change, disruptive
15 change, on the national health care market.
16 THE COURT: Well, all of this is tentative, but it
17 appears to me that with regard to the noncompete, if ABC --
18 this is part of the reason I -- if ABC doesn't now have
19 activity that competes directly or indirectly with any of
20 Optum's activity, product or service that Mr. Smith engaged in
21 or participated in or had confidential information about during
22 the last three years in his employment, his noncompete would
23 not be violated.
24 The threat, it appears to me at the moment -- but as I
25 say, I'm saying this so you can address it. It appears to me

45
1 that if there's a threat that ABC will engage in competitive
2 activity in the future and that Mr. Smith will be part of that
3 competitive activity, that wouldn't be enough to establish a
4 violation of the noncompetition clause.
5 There's a kind of organic relationship between I think
6 the noncompete and the confidential information, but I thought
7 the confidential information argument might be the more
8 straightforward one.
9 MR. RIDEN: I think the confidential argument is a
10 straightforward one, but I do want to address the noncompete
11 issue because I think based on -- the close reading of the
12 language that is contained within Mr. Smith's noncompete and in
13 looking at what ABC is currently doing now, they are -- I'll
14 read from the language -- he is engaging in or participating in
15 any activity that competes directly or indirectly with any
16 Optum activity or product or service that he engaged in while
17 he was there. And so what is the ABC activity that he's
18 engaged in? If we look at Mr. Stoddard's affidavit, and I'll
19 start with paragraph 10 where --
20 THE COURT: Hold on a second, please.
21 MR. RIDEN: Sure thing.
22 THE COURT: Paragraph 10.
23 MR. RIDEN: Yes, Your Honor. In that paragraph, Your
24 Honor, Mr. Stoddard states that "ABC does not sell or offer any
25 products or services" --
46
1 THE COURT: Not too fast.
2 MR. RIDEN: I apologize. It states that "ABC does not
3 sell or offer any products or services to the general market."
4 And I think that's a very narrow view of what constitutes
5 competition in this space.
6 And it goes on to say that, "Instead, ABC is
7 evaluating potential health care solutions for the founders'
8 over 1.2 million employees that lead to better outcomes, higher
9 satisfaction and more affordable care." And in the very next
10 paragraph, Mr. Stoddard talks about what ABC is doing. It is
11 seeking to evaluate, test and scale solutions provided by third
12 party vendors, which could include Optum, who are willing to
13 innovate and experiment with ABC. ABC is currently using data,
14 analytics and expertise to combine products from third party
15 vendors, which could potentially include Optum, to come up with
16 new ways of unlocking value for the founders and their
17 employees.
18 That's all stated in the present tense. This is what
19 they're working on right now at this very minute. And we have
20 to assume that Mr. Smith, who ABC elected to start working the
21 day after we filed this lawsuit, that's what he's doing there
22 today. That gives us great concern, that he's out at ABC,
23 helping them evaluate various third party vendors, which could
24 potentially include Optum, to provide services to the companies
25 that we also provide services to. This to me -- sorry, Your

47
1 Honor.
2 THE COURT: Go ahead. Finish the sentence.
3 MR. RIDEN: This to us reads as ABC is working to
4 displace Optum, at least with respect to these three companies.
5 THE COURT: And what services -- I think your
6 submission indicates that Optum provides services or products
7 to employees, some employees of Berkshire Hathaway and JP
8 Morgan Chase, correct?
10 THE COURT: Does it provide them to the companies or
11 to employees directly?
12 MR. RIDEN: Well, through the companies to the
13 employees.
14 THE COURT: Okay. And does the evidence yet tell me
15 what products and services Optum provides to Berkshire Hathaway
16 and JP Morgan Chase?
17 MR. RIDEN: I don't believe it contains that level of
18 specificity, Your Honor.
19 THE COURT: And does the evidence yet show me whether
20 Mr. Smith had any involvement, I'd say directly or indirectly,
21 with providing products or services to JP Morgan Chase or
22 Berkshire Hathaway?
23 MR. RIDEN: No. In fact, Your Honor, the evidence
24 that we have is from Mr. Smith saying he was not involved with
25 provision of any services to those two companies. It is our

48
1 position, however, that he certainly knows the playbook. He
2 knows the pricing information. He knows what sort of
3 go-to-market strategies Optum has for its large enterprise
4 clients like those companies.
5 So if he might not have studied and been directly
6 involved with provision of services to those companies, he
7 certainly knows what Optum does in providing services to those
8 companies.
9 And to be clear, the restriction is on what he knows,
10 too, not just which clients he takes care of. I mean, this is
11 not a noncompete agreement against a salesperson saying you
12 can't go sell products to WB Mason. This is based on
13 protecting the overall knowledge, which could be applicable to
14 any company. And we're focusing on JP Morgan --
15 THE COURT: Well, that's part of the reason I was
16 particularly -- I thought I would end up particularly focusing
17 on whether he had trade secrets, confidential information
18 protected as trade secrets under the contract but particularly
19 under the Massachusetts statute and whether you've proven that
20 he's using them or essentially inevitably will in his present
21 position.
22 MR. RIDEN: I'll turn to that, Your Honor.
23 THE COURT: If you're ready.
24 MR. RIDEN: Yeah, sure. I think that's a good
25 transition. I think we have to start by looking at, you know,

49
1 the big picture. In his role as vice president of products for
2 Optum right before he left, he was helping develop products for
3 Optum. We understand immediately after leaving Optum and going
4 to work for ABC, what he'll be doing is developing products.
5 That's what ABC -- they're in ramping up mode. Him going to
6 ABC with the knowledge that is in his head, the confidential
7 information about Optum's trade secrets that's in his head,
8 he's going to give ABC a head start.
9 So I'm going to focus your attention a little bit on
10 just some of the documents he was accessing on his way out the
11 door and what he was doing in the last few weeks before he
12 left.
13 THE COURT: Help me with the chronology.
14 MR. RIDEN: Sure. I got my chronology.
15 THE COURT: Good. My understanding is that Mr. Smith
16 says he wanted to work for ABC. He wrote to Dr. Gawande and
17 didn't get a response and then a headhunter contacted him.
18 When did the headhunter contact him?
19 MR. RIDEN: That happened, according to the evidence,
20 on October 7 of 2018. And he had reached out to Dr. Gawande on
21 June 27, my anniversary.
22 THE COURT: So that was October 7. Then what happened
23 next?
24 MR. RIDEN: Then we have information that after that
25 point Mr. Smith and the recruiter for ABC had lengthy
50
1 discussions on October 19 and October 22, more of a
2 continuation of what was initiated back on October 7.
3 THE COURT: Okay.
4 MR. RIDEN: October 9, from our perspective, is when
5 things started to get --
6 THE COURT: October 9?
7 MR. RIDEN: Sorry. October 29 -- I apologize -- when
8 things transitioned from a get-to-know-you type of situation to
9 an actual in-person interview. And I want to talk about
10 October 29 for a minute because that's an important day.
11 THE COURT: I've zeroed in on October 29, 9:51.
12 MR. RIDEN: 9:51 a.m., I don't know what you were
13 doing, Your Honor, that day, but what Mr. Smith was doing was
14 printing out a Fact Book. It was called the Project Orange
15 Fact Book. This was a document that was the sort of
16 consolidated work product of a summer's worth of activity at
17 Optum where you had many of the heads at Optum filling a room
18 of papers, spending the summer putting together a plan, talking
19 about what Optum's strengths are. And we have submitted a copy
20 of this as an exhibit to the complaint and to the affidavit of
21 Mr. Wolin.
22 That Fact Book was printed at 9:51, and then one
23 minute later, according to the forensics, Mr. Smith printed his
24 resume. So that says a little something about his state of
25 mind that day of what he was -- the two documents he was

51
1 looking at that morning before he went and had an interview
2 with Mr. Stoddard, Jack Stoddard, the COO of ABC.
3 THE COURT: You think he met with Mr. Stoddard after
4 he printed these items?
5 MR. RIDEN: Yes, Your Honor. Yes, Your Honor. And
6 Mr. Stoddard, COO of ABC and former senior executive of Optum.
7 THE COURT: Okay. Could you continue with the
8 chronology, please.
9 MR. RIDEN: Yes, Your Honor. On November 2, Mr. Smith
10 had an interview with other ABC representatives.
11 THE COURT: Okay.
12 MR. RIDEN: On December 4, Mr. Smith -- that was the
13 day that he reached out to several junior employees at Optum to
14 try to get information about very highly confidential
15 information that there was no good reason for him to have, no
16 legitimate business reason for him to have.
17 If we get into the testimony, Your Honor, you'll hear
18 more information about that. But it was a surprising enough
19 circumstance that Mr. Smith's outreach to these junior
20 employees on that day alarmed three people who went and spoke
21 to Mr. Stoddard, Mr. Smith's supervisor, Steve Wolin.
22 THE COURT: Okay.
23 MR. RIDEN: If we get to this -- I don't think we have
24 to get to this, but if we get to Mr. Wolin's testimony, there's
25 going to be more interesting information about how unique of a

52
1 situation this was. It never happened in Mr. Wolin's
2 experience. And it was sufficient concern for Mr. Wolin to
3 reach out to one of the other employees, Nick Seddon, one of
4 the other supervisors at Optum, to come up with a strategy, a
5 plan to sit down with Mr. Smith to talk to him about this rare
6 and unique occurrence of him reaching out and asking for
7 information from these individuals in an alarming way.
8 One of the things that you'll hear from Mr. Wolin's
9 testimony, if we get there, is that Mr. Smith's office was
10 right next to Mr. Wolin. Had he wanted to get that
11 information, he could have gone next door. He didn't have to
12 go around to more junior people to gather this information,
13 unless there was some reason he was acting surreptitiously.
14 There is additional information. There were -- this
15 is not in the evidence yet. I don't know if you want to hear
16 it. But Mr. Wolin has testimony about the fact that on that
17 same day, December 4, Mr. Smith asked for and received various
18 copies of board of director reports, again a set of information
19 that he had no right -- or no reason to have access to. And he
20 also asked for a summary of the company's unit called Optum
21 Serve which provides services to the federal government. So he
22 was in collection mode.
23 THE COURT: Okay. Then what?
24 MR. RIDEN: And then on October 6 --
25 THE COURT: October or December?

53
1 MR. RIDEN: Sorry. December 6 of 2018, Mr. Smith
2 attended an all-day cross-team strategy system meeting, and he
3 participated in highly confidential discussions at that
4 meeting.
5 Contrary to Mr. Smith's affidavit, this was not a
6 quarterly meeting. This was in fact the first time ever such a
7 meeting of this level and type had been held across the
8 different teams at Optum. And this information, to put a pin
9 in it, this information that Mr. Smith was gathering on
10 December 4 was not on the agenda for the meeting and was not
11 the subject of the meeting. That afternoon, Mr. Smith says
12 it's 3:00 that afternoon, he received a call stating that he
13 will get an offer from ABC.
14 Of course Optum takes issue with the fact that
15 somebody who was on the verge of receiving an offer and had
16 been in such close communications with ABC throughout this
17 point, what he was doing still voluntarily attending this very
18 high-level cross-team meeting, perhaps he should have excused
19 himself or found some other reason to avoid the conflict of
20 interest that occurs if you're sitting in on confidential
21 information and then planning to go to a competitor right away.
22 So the very next day, on December 7, Mr. Smith
23 received a written offer from ABC. What followed there is,
24 from Optum's perspective, one of the most alarming things from
25 our perspective. On December 10, that is the day after -- that

54
1 is three days after he received the written offer and the day
2 before he signed the written offer, so literally within 24
3 hours or so of signing the written offer, he accessed the Optum
4 enterprise strategy document. And that's attached in redacted
5 form to Mr. Wolin's affidavit and to the complaint. That
6 document is significant because it is -- first of all, the
7 forensic reports show --
8 THE COURT: Just -- I don't know how long this case is
9 going to be before me, but in the future, if there's something
10 that you feel should be sealed, you should file the full --
11 well, this may need a protective order. But generally
12 speaking, my practice is to require that documents that contain
13 confidential information be filed under seal with redacted
14 copies for the public record, but then I can read the full
15 document. It may be a problem in this case. You may have a
16 concern. Both sides may have a concern about the other party,
17 so I'm not saying I wouldn't make exceptions to that for this
18 case.
19 MR. RIDEN: I appreciate that, Your Honor. We do have
20 unredacted copies in the courtroom if the court would like to
21 view them in camera today. But it suffices to say that this
22 enterprise strategy document is among the most confidential
23 documents that Optum has. It's a forward-looking strategy
24 document that lays out where Optum plans to go for the next
25 several years. It consolidates mountains of research, lots of

55
1 input from all the heads at Optum, and puts in one handy
2 document what Optum's plans are for the next several years.
3 This Optum -- it is marked confidential, and he printed it out.
4 He printed it out, according to the records, and that's the
5 only time that he printed it out. We have no other records
6 showing that he printed that document out, contrary to his
7 affidavit where he says it was his habit to print out documents
8 like this all the time. That may very well have been the case,
9 but with this particular document, the one that raises such
10 concern that he was looking at, printing out, the day before he
11 signed his offer, there's no record of him printing that
12 document before.
13 Now, what happened to that document? We don't know.
14 He said that he either left it at Optum or discarded it. Well,
15 Mr. Smith's office was searched after he left. No copy of that
16 document was found. So that leaves the option of it being
17 discarded or elsewhere. So all we know is that the document is
18 not in his office, and we don't know where it is, but he
19 printed it out.
20 Now, that day is significant because it was the last
21 day before he also informed his supervisor, one of the
22 supervisors, Nick Seddon, that he was resigning from Optum. So
23 as far as we know Mr. Smith assumed that that last day, October
24 10 when he was printing out Optum's enterprise strategy
25 document, that might have been his last full day in the office,
56
1 his last chance to take a look at such confidential
2 information. And it's telling that that was the last piece of
3 information he grabbed on his way out the door. We don't have
4 evidence that he took it with him; we don't have evidence that
5 it's in the hands of ABC; but we do have evidence that that was
6 one of the last pieces of information he looked at.
7 Now, from an every-man point of view, it reads to us
8 as if this is somebody who was reinforcing the most
9 confidential relevant information on his way out the door that
10 somebody would want to have before they go start for a company
11 the following week. And you don't have to take the document
12 with you at that point. You'd studied it, you've committed it
13 to memory and you're going to go work for a job that you're
14 doing exactly the same thing, it is very helpful to have that
15 kind of information in your head. And it's certainly very
16 likely that you would inevitably disclose the information that
17 you have in your head from that document in connection with
18 performing the same services with a very similar title for a
19 new company that is just trying to get off the ground and
20 trying to do things that are competitive with Optum.
21 Now, when Mr. Smith spoke to his direct supervisor,
22 Steve Wolin, that was December 13. He told Mr. Wolin that he
23 was resigning to go to ABC. And he described the role vaguely
24 as building and leading a research team for ABC. No other
25 information was given. We know at the time that his title was
57
1 going to be director of product strategy and research. That
2 wasn't shared at the time with Mr. Wolin.
3 And then thereafter, there was an exchange of demand
4 letters. Mr. Smith's original start date was going to be, as
5 we understand it, January 2. He was not working on that date
6 because there was a voluntary stand-down. However, on January
7 4, ABC went and hired one of Mr. Smith's direct reports,
8 Caitlin Fleming.
9 THE COURT: Was she his direct report at the end of
10 his tenure, or had she left her position under him earlier that
11 year?
12 MR. RIDEN: We'll have to confirm. I believe it was
13 his direct report and had been working there up until the end
14 of the term. And she's not bound by a noncompete, Your Honor.
15 We're not seeking to bring her into this courtroom.
16 THE COURT: Except as a witness.
17 MR. RIDEN: Correct, Your Honor. January 11, there
18 was a mediation, and the rest is history. On January 16, this
19 lawsuit was filed, and on January 17 in response to that, ABC
20 started Mr. Smith at work despite a request that he not start
21 work.
22 THE COURT: Okay. It's your contention that -- well,
23 what is your contention? That he's used -- okay. So that's
24 the chronology. Is there more that you'd like to say about the
25 other? Is there more you'd like to say?

58
1 MR. RIDEN: Of course. Well, I mean, the main point
2 of that, all of that, Your Honor, is that here is somebody who
3 had a great deal of confidential information, who was
4 reinforcing that information on his way out the door, was being
5 evasive when asked what he was going to be doing, and then is
6 going to work for a company in a substantially similar position
7 where all that information would be relevant to his job and
8 would inevitably be disclosed in the process to ABC in
9 connection with the research he's doing there and products he's
10 developing there. There's no way, even if he scrupulously
11 abided by the good counsel of his attorney and walked out of
12 the office with empty hands and an empty briefcase, he still
13 has the information in his mind and he made sure it was there,
14 it's very clear.
15 That is what the Massachusetts statute is there to
16 address, this sort of threat of misappropriation, threatened
17 misappropriation of information through the inevitable
18 disclosure of information. And this court has the power to
19 take equity into account and to look at the conduct of
20 Mr. Smith as he was leaving out the door. There are many
21 things he could have done differently that he didn't. He could
22 have taken a more hands-off approach on his way out the door.
23 He could have been more forthright with his colleagues about
24 what he was doing. Instead he surreptitiously was pestering
25 people for information, taking information off the system. We

59
1 don't know where the information is. We'll take him at his
2 word for purposes of today that he doesn't still possess it.
3 But it does leave open the question.
4 THE COURT: And there are cases that hold that the
5 disclosure of confidential information is a form of irreparable
6 harm. You rely on that principle?
7 MR. RIDEN: Yes, Your Honor. And it's the Aspect
8 Software v. Barnett case that is cited in our reply brief.
9 That case is very compelling, Your Honor, in this circumstance.
10 It's cited on page 4 of our brief.
11 THE COURT: Hold on one second. I should have it.
12 Do you know what page of the decision you're
13 referencing?
14 MR. RIDEN: Page 130, Your Honor.
15 THE COURT: Okay.
16 MR. RIDEN: I can read it verbatim or paraphrase.
17 What does the court prefer?
18 THE COURT: Well, say something for the record, if not
19 for me.
20 MR. RIDEN: So for the record, Your Honor, I would say
21 that the passage of Aspect Software v. Barnett that's
22 particularly relevant to these circumstances focuses on the
23 similarity between Mr. Smith's positions at Optum and what we
24 expect he's currently doing for ABC. Given the similarities,
25 it's, quote, "difficult to concede how all the information

60
1 stored in his memory can be set aside as he applies himself to
2 a competitor's business and products." Further quoting, on the
3 contrary, what Mr. Smith knows about Optum is bound to
4 influence what he does for ABC, and to the extent it does,
5 Optum will be disadvantaged. I'm obviously inserting the names
6 of the parties here for the names of the parties in the cases.
7 "Other courts in this district faced with similar circumstances
8 have concluded that even sincere scrupulous efforts by an
9 employee and his or her new employer to protect a prior
10 employer's trade secrets are insufficient to remove the threat
11 of irreparable harm via disclosure of trade secrets."
12 In that case the plaintiff had, accordingly, carried
13 the burden of establishing a significant risk of irreparable
14 harm, absent preliminary injunctive relief. So that's even,
15 Your Honor, giving full credit to Mr. Smith's assertion that,
16 under good counsel of Attorney Welsh, he walked out with an
17 empty briefcase.
18 THE COURT: And does the record indicate that he had
19 counsel at the time that he was leaving?
20 MR. RIDEN: I am not sure. I don't believe the record
21 indicates he had counsel at the time that he was leaving. I
22 don't think there's any dispute, Your Honor.
23 THE COURT: Then I have to consider the balance of
24 hardships. Mr. Smith's affidavit indicates he's been employed
25 in the health care industry for all of his career and that,
61
1 like I say -- I guess I'd say a couple of things -- that he's
2 got two young children and that he needs to work, so it would
3 be a great hardship on him if he couldn't work, and the
4 contention is that the way Optum is construing his activities
5 for Optum and the noncompete clause, he's barred for a year,
6 barred for a year from essentially doing anything in his field
7 that would employ his experience. How do you respond to all of
8 that?
9 MR. RIDEN: These are points that are well taken. The
10 response to that, Your Honor, is that no one is saying that,
11 first of all, Mr. Smith cannot go work. He can go work
12 anywhere he wants to work so long as it's not a competitor of
13 Optum in violation of his noncompete or a place where he would
14 inevitably disclose his trade secrets.
15 THE COURT: What's an example? Could he go back to
16 working for Bain?
17 MR. RIDEN: He could go back to work for Bain as long
18 as he doesn't go work directly for the unit that does health
19 care.
20 THE COURT: Well, this is his -- I mean this is -- you
21 know, this is what he knows, what he does, what he's valuable
22 for, what people will pay him enough to pay his mortgage and
23 feed his children to do.
24 MR. RIDEN: On the finances side, I'm personally
25 sensitive to that. I want to point out that the

62
1 back-of-the-envelope valuation of what he was paid for these
2 four agreements that he signed that contained restrictive
3 covenants is a little bit north of $150,000 is the value, with
4 about $24,000 of realized gains and another 130,000 or so of
5 market value.
6 THE COURT: You're talking about the options, stock
7 and the options?
8 MR. RIDEN: That's correct, Your Honor. So there's
9 money there. And I can't speak to Mr. Smith's finances, Your
10 Honor. I understand that he was getting paid approximately
11 $200,000 a year working for Optum. The salary that I
12 understand to be offered at ABC was approximately $300,000.
13 THE COURT: Is that in the evidence?
14 MR. RIDEN: Yeah, that is in the evidence, Your Honor.
15 THE COURT: I may have missed it.
16 MR. RIDEN: So he's a highly paid individual who has a
17 high degree of education, obviously a stellar set of skills,
18 and will certainly be able to find work at ABC or elsewhere at
19 the end of his noncompete period.
20 And frankly, looking at the cases from Delaware that
21 have looked at this issue, the harm they're focused on -- I'm
22 looking to the cite here, but in those cases what they're
23 looking at is essentially somebody who is a low-level employee
24 who doesn't have great career opportunities. In that
25 circumstance the courts really do favor the employee and focus

63
1 a great deal on their circumstances. But where the former
2 employee has a robust education and a terrific resume, like
3 Mr. Smith undoubtedly does, that the courts are more willing in
4 that circumstance to say, Okay, this is a sophisticated party
5 who signed these agreements for significant consideration and
6 won't feel a long-term impact for having to be ordered to
7 comply with their agreements that they signed.
8 THE COURT: And what about the --
9 MR. SHEEHAN: Your Honor --
10 THE COURT: Just one second. What about the public
11 interest?
12 MR. RIDEN: There's no real detrimental impact here on
13 the public interest, that there is a positive public
14 implication for requiring Smith to adhere to the agreements
15 that he signed, and certainly Delaware, more than most, they
16 really look to hold people to their agreements, even noncompete
17 covenants like this. And that is something that parties are
18 routinely bringing to the court's front door to hold parties to
19 their agreement and that's simply what we're asking for here.
20 On the other side, there's --
21 THE COURT: Are there Delaware cases you --
22 MR. RIDEN: I have not cited Delaware cases on this
23 specific point, Your Honor.
24 THE COURT: Go ahead.
25 MR. RIDEN: On the other side, there's a strong public

64
1 policy, certainly here in Massachusetts, on protecting trade
2 secrets and ensuring that the trade secrets are not
3 misappropriated or used to support unfair competition.
4 THE COURT: Okay. Thank you.
5 All right. Mr. Sheehan, do you want to be heard in
6 opposition?
7 MR. SHEEHAN: I do, Your Honor. I'd ask may we take a
8 very brief break?
9 THE COURT: Yes. Okay. And look, just to give you --
10 we will take -- is five or ten minutes okay?
11 MR. SHEEHAN: Ten minutes is fine.
12 THE COURT: And then I want to hear your argument, and
13 we'll take a lunch break. You can work on your motion and
14 memo. And we'll go one step at a time. The plaintiff may want
15 to start working on this issue, too. Okay? It's 12:00. We'll
16 resume at 12:10. Court is in recess.
17 MR. RIDEN: One question, Your Honor?
19 MR. RIDEN: One question. Are you planning to hear
20 testimony today?
21 THE COURT: We'll see.
22 MR. RIDEN: Okay.
23 THE COURT: It may not be necessary.
24 (Recess taken 11:57 a.m. - 12:16 p.m.)
25 THE COURT: We know we're going to get a motion to

65
1 stay these proceedings, and I gave the defendant an opportunity
2 to go out and get to work on its brief. The plaintiff ought to
3 be doing the same, if you're not already.
4 MR. BECK: We are, Your Honor.
5 THE COURT: You are?
6 MR. BECK: We are working on that as well.
7 THE COURT: Me, too. All right. Hold on.
8 Go ahead, Mr. Sheehan.
9 MR. SHEEHAN: Thank you, Your Honor.
10 I'd like to begin by going to the equities. Your
11 Honor made the point that even if plaintiff is able to show a
12 substantial likelihood of the merits, and even if the court
13 were to get to a finding that the elements for injunctive
14 relief had been established, there is still the equities in
15 fashioning a remedy.
16 So I know this is at the end, and I certainly will
17 argue and present why there's no likelihood of success on the
18 merits, but I think it's important, because this will shape
19 context, as the court is thinking about the entire case, the
20 equities or the inequitable conduct, if you will, of the
21 plaintiff.
22 There's no doubt that what Optum has done here in its
23 public filing and through the allegations of the complaint is
24 try to paint a picture that Mr. Smith walked out --
25 THE COURT: Which is Mr. Smith?

66
1 MR. SHEEHAN: My client.
2 THE COURT: I just didn't know --
3 MR. SHEEHAN: Mr. Smith, David Smith, right there,
4 Your Honor. That he walked out with their documents, by the
5 sequencing of the allegations in the complaint and the
6 allegations of how he accessed documents, downloaded them, and
7 then hearing for the first time from counsel's mouth that they
8 searched his office and that that one document wasn't there.
9 That's not in any affidavit.
10 They want to at least raise it in the court's eyes --
11 they certainly raised it in the press's eyes -- that Mr. Smith
12 took things. But where we are today after the reply brief
13 where Optum did not utter a single word of evidence or a single
14 line of argument to address our opposition and Mr. Smith's
15 sworn testimony that he did not take a single thing
16 demonstrates that they've conceded that point.
17 THE COURT: Well, I think the difficulty is this is a
18 motion for a temporary restraining order. There hasn't been
19 any discovery. There may be a question, if I issue a temporary
20 restraining order, whether I have the authority to allow any
21 discovery. But, you know, there's certain things -- how would
22 they know if he took something in the absence of discovery?
23 And there's an affidavit, but it hasn't been subject to
24 cross-examination. And I mean, that's part of the difficulty.
25 MR. SHEEHAN: Right. But there's more to it, Your

67
1 Honor. And that is, this is a trade secret case. They've
2 tried to paint a picture that Mr. Smith walked off with their
3 trade secrets. What they're really arguing is, whether he did
4 or not, they've got this theory of inevitable disclosure. What
5 I'd like to show to Your Honor is that the only academic issue
6 in court and the only remaining issue is whether or not this
7 theory of inevitable disclosure gets them anywhere.
8 THE COURT: Hold on just one second.
9 Okay. Go ahead.
10 So let's back up. On December 21, the plaintiffs'
11 general counsel sent a letter out to Mr. Smith and to his new
12 employer where for the first time they set forth all of these
13 allegations of misconduct, of taking. And what transpired was
14 the company didn't put him to work, and it didn't put him to
15 work for two reasons. One, it wanted to find out whether any
16 of these allegations had any meaning to them. Were they true?
17 And it also wanted to engage in discussions with the plaintiff
18 to see if, you know, is there something we could do short of
19 putting him out of work that would satisfy their alleged
20 concerns about trade secrets.
21 And Mr. Smith, through his counsel, responded point by
22 point, denying that he had taken anything. And then -- and
23 this is what is important. Then asking -- I think both sides
24 asked, both parties asked, if there's anything that you want
25 returned, anything that you think, that you allege, that you
68
1 believe Mr. Smith has taken, specify what it is. This is
2 December 21.
3 That request by Mr. Smith and from his new employer,
4 quite frankly, has been made repeatedly to the plaintiff in
5 letters, in phone calls, and this is where the equity comes in.
6 Because if they're going to say he took something, they should
7 be clear about it. And they should tell him, Return this. If
8 they're going to ask the court for an order saying, put in an
9 order that he needs to return things, shouldn't they have first
10 said, Here is what we think you took, you know, we think you
11 took the Fact Book. Return it. They didn't do that. Nothing.
12 THE COURT: Well, here. I mean, these are important
13 points, and I may -- so Mr. Smith's affidavit is docket number
14 23-1. In paragraph 15 on page 5, he says, "On December 21,
15 2018, Optum sent me a letter threatening to bring legal action
16 against me. As I have represented to Optum, through my
17 counsel, the only UHG or Optum documents I have in my position
18 are an email chain with a slide deck attachment containing my
19 head shot, some of my own personnel and on-boarding documents
20 and some publicly filed UHG reports. I have also told Optum,
21 through my counsel, that I will execute an affidavit attesting
22 to these facts and return or destroy the documents at Optum's
23 direction. Optum never responded to my offer."
24 That doesn't say that that he didn't take anything.
25 It says that on the date of his affidavit he didn't have

69
1 anything. So I thought, if he testified, that could be
2 clarified.
3 MR. SHEEHAN: He does. He elaborates further on with
4 regard to each allegation in the complaint as to a specific
5 download of a document and specifically the ones referred to by
6 counsel in his argument, beginning at paragraph 19. And it
7 says, "I did not engage in any wrongful conduct." And
8 Mr. Smith goes through, I can read them, all the way through
9 paragraphs 21, 22, 23, these are specific -- this is
10 Mr. Smith's sworn testimony specifically rebutting the
11 inference as well as the allegations set forth in plaintiffs'
12 complaint.
13 And then it really, at paragraph 26, I think it
14 addresses your concern, Your Honor, where he states, "As I
15 stated above, other than the email and attachment containing my
16 head shot, some personnel and on-boarding documents and some
17 public reports, I have no hard or electronic copies of any
18 Optum documents in my possession."
19 And that's not the first time he said that.
20 THE COURT: So he says, "I had no" -- "I have no hard
21 or electronic copies of any Optum documents in my possession.
22 I did not print out and remove any Optum documents to my home."
23 MR. SHEEHAN: And he continues. "I have not shared
24 any Optum documents with ABC or any other third party, except
25 as authorized by Optum during the course of my employment.

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1 When placed on administrative leave on December 13, 2018, I
2 left my work laptop and all other Optum property with Optum and
3 did not remove any Optum property from the office. Any Optum
4 documents I printed at work were either discarded once I
5 finished with them or left at Optum when I was placed on
6 administrative leave."
7 That's Mr. Smith's unrebutted sworn testimony in our
8 opposition brief.
9 THE COURT: Well, how would they rebut it, except it's
10 circumstantial -- I think they make two -- they just made two
11 arguments. One, there's circumstantial evidence that they
12 argue shows that he was accessing confidential information back
13 on October 29 I think it was, right before he interviewed with
14 Mr. Stoddard for his job. So, you know, this is all
15 necessarily -- it's a temporary restraining order. You have to
16 make -- a judge has to make some judgments quickly. But that,
17 they argue, is highly suspicious. And then they make the
18 argument, even if he didn't have the documents, if he has the
19 information, if he knows it, that it could still be improperly
20 disclosed or used.
21 MR. SHEEHAN: Right. And that's a separate point that
22 I want to address following. But first, there is no evidence
23 and there is no reasonable basis to draw an inference from his
24 working while he was at Optum, working for Optum, the forensic
25 evidence shows nothing, they he didn't -- they cannot

71
1 establish, they don't have any evidence that he, you know,
2 inserted a flash drive and took data. They don't have any
3 evidence that he emailed documents and data away from him. All
4 they have is routine use of documents. And he explains in
5 detail in his affidavit each and every time he accessed the
6 documents referred to in the earlier allegations, what he was
7 doing for Optum at the time and what he did with them. And
8 they have nothing to rebut that.
9 Now, take that in this context. They would like to,
10 and I think Your Honor noted, not just have Mr. Smith not work
11 for his new employer at all, but they'd like him to not work in
12 the health care industry at all, his chosen profession for more
13 than a decade.
14 So during this period of time when they didn't
15 identify and say, Well, we think you took these documents;
16 return them -- which is I think a necessary measure to protect
17 their trade secrets. They didn't do that. If they're trade
18 secrets, they've sat on their hands. They also didn't offer
19 any measures that, short of firing Mr. Smith, that they would
20 find acceptable to protect and safeguard their trade secrets.
21 And I think that's something that's important for Your Honor to
22 consider when you think have they been equitable in their
23 approach.
24 THE COURT: This is, again, one of the reasons I was
25 thinking I'd be able to -- this is a consequential decision for

72
1 both parties, and I'd be able to make a better informed
2 decision if I heard some testimony. Although that may not be
3 where we are at the end. But, you know, Optum says Mr. Smith
4 was an important employee and his responsibilities related to
5 Optum's business at least throughout the United States, and his
6 description of his activities are more modest.
7 And part of the reason I went to the specific language
8 of the noncompete is because I don't think it's sufficient, I
9 don't think it would be sufficient from the plaintiffs'
10 perspective to simply show that he works for a company that
11 competes with Optum. They would have to show what he did with
12 Optum and what he does with ABC, and, you know, persuade me
13 that it's reasonably likely that there's a nexus for the
14 noncompete between the two of them. And, you know, if I was
15 concerned about whether I had sufficient -- well, I was
16 concerned about whether I might want to have more detail before
17 I resolve this.
18 MR. SHEEHAN: And the undisputed evidence on that
19 point, Your Honor, is that Mr. Smith did not do any work at
20 Optum with regard to the founders, JP Morgan Chase, Berkshire
21 Hathaway or Amazon. No work. And the other sworn fact is that
22 Mr. Smith, in his job at Optum or in his job at his new
23 employer, the joint venture, will not be working on product
24 development at all. And as a voluntary self-imposed measure,
25 the new employer said and he will not work on anything

73
1 evaluating Optum's products when he's evaluating other products
2 in the market. Those are self-imposed voluntary measures
3 recognizing that that may be prudent.
4 Now, again, during this course -- and this is in
5 considering the equities and what might be appropriate, what I
6 wish plaintiff had done, not just what Your Honor is
7 suggesting, and that is, Okay, there's no evidence that he took
8 anything, it's clear that he hasn't, he's denied that he has
9 under oath, and instead, come into court and said he was a
10 respected employee, he held an important position in our view,
11 and he shouldn't be working in this job. We think, however
12 noble he may be, he's unable to do so. That's what they should
13 have done.
14 Now, I think they're wrong on the law there and I'm
15 going to get to that. But at least then they wouldn't have
16 engaged in a smear campaign and try to paint a picture to the
17 court that it knowingly -- and here is what I'll show you --
18 knowingly, know is false. The day the letter, the December
19 21st letter was sent by counsel for the plaintiff to my client
20 and to his new employer, he received a phone call from Mike
21 Weissel.
22 THE COURT: From whom?
23 MR. SHEEHAN: Mike Weissel, senior executive at Optum,
24 a few steps up the chain from Mr. Smith. And in that phone
25 call he said, Hey, you're going to get a letter. I want you to

74
1 understand, nothing personal. It's not anything you did. This
2 is between the companies. Off the record.
3 THE COURT: That's not in the affidavit yet?
4 MR. SHEEHAN: That will be in the record when -- if he
5 testifies.
6 THE COURT: Okay.
7 MR. SHEEHAN: And it certainly will be Mr. Smith's
8 testimony. Now, what is in Mr. Smith's testimony is that in
9 September of 2018, at a meeting here in Boston, Mike Weissel
10 and several other senior executives were doing a little
11 war-gaming session on whether or not, you know, who are the
12 competitors, what are the competitive threats. And they
13 agreed, Mike Weissel commented that he didn't view ABC, the
14 joint venture, as a competitor. In fact, his comment was I
15 view them more as a customer.
16 Now, I'd argue when we get to it that that's a legal
17 admission. But it goes to the equity. Think of the context.
18 Here is my client in September thinking about, I'd sure like to
19 work for ABC, this new venture. He takes an interview, and
20 he's heard they're not a competitor. And he agrees, they're
21 not a competitor. They're more likely a customer. And one
22 thing is for certain, they're in their nascent stages and all
23 they can really talk about is what they may become someday and
24 not what they are today.
25 I think equably that estops the plaintiff from seeking

75
1 any equitable relief. How can it be here months later trying
2 to put Mr. Smith out of a job that one of his senior officers
3 said --
4 THE COURT: Well, look, this is not working. You can
5 either all sit at the same table, but I can't listen to
6 Mr. Sheehan and watch your colleagues dart back and forth.
7 MR. RIDEN: I apologize, Your Honor. We'll stop.
8 THE COURT: But stop. When I listen to that and I
9 accept for present purposes that your representation is what
10 I'll hear from Mr. Smith, when an executive says to him it's
11 not personal, that's not the executive saying we don't believe
12 you did anything wrong. It's saying, you know, there are
13 important institutional interests here, and we have to protect
14 our interests. It doesn't say we know our, you know,
15 allegations are false or unmeritorious, but we just want to be
16 in a contest with ABC.
17 MR. SHEEHAN: A number of inferences could be drawn.
18 One that sounds very reasonable is that this was a call made
19 as, you know, a gesture, maybe a friendly gesture. It wasn't
20 one to say, Hey, return whatever you took. There was no
21 discussion about anything like that. Nothing. It was, This
22 isn't really about you. And then, you know, the bulk of the
23 complaint is about him and paints a nefarious set of
24 circumstances that just can't be supported by any testimony.
25 And the last point, it's a legal one that goes to the
76
1 equities, Your Honor, is that there isn't a single case, not
2 only a single case cited by plaintiffs, but there isn't a
3 single case under trade secret law that would put a man out of
4 work on this inevitable disclosure theory.
5 THE COURT: Well, the Massachusetts statute became
6 effective in October 2018. So if it expanded potential
7 liability, it may not be surprising that there are no cases.
8 MR. SHEEHAN: Well, there are no cases. So where do
9 we look? The Defense of Trade Secret Act makes it clear in
10 construing inevitable disclosure and applying inevitable
11 disclosure that if the court were to find -- and I don't think
12 the court will find that here.
13 THE COURT: You're talking about the federal statute
14 now?
15 MR. SHEEHAN: The federal statute. That if the court
16 were to find that you've got two companies that are intensely
17 competitive, that the defendant moved from one to another in
18 exactly the same position and like in Aspect, had an
19 encyclopedic memory, that it had to protect trade secrets,
20 otherwise they would be inevitably be disclosed, the In Defense
21 of Trade Secret Act specifically prohibits the remedy to be
22 putting the person out of work. Rather, what happens --
23 THE COURT: Here, hold on a second. Let me get it.
24 What provision is this, the remedy provision?
25 MR. SHEEHAN: I can locate it for you, Your Honor.

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1 THE COURT: I'm looking for 18 United States Code
2 Section 1836, subsection 3.
3 MR. RIDEN: I have it, Your Honor. We cited it in our
4 reply. Footnote 2, page 5, and I'll read the cite if you would
5 like, read the explanation.
6 THE COURT: Go ahead. Remedy provision, it says --
7 MR. RIDEN: It is. I'll read the whole thing for the
8 record. It's 18 U.S.C. Section 1836(b)(3)(A)(i)(I), and it
9 talks about how an order under the DTSA cannot prevent a person
10 from --
11 COURT REPORTER: I'm sorry.
12 MR. RIDEN: An order under the DTSA cannot prevent a
13 person from entering into an employment relationship, but it
14 can place -- paraphrasing -- but it can place conditions on
15 such employment so long as such conditions are, quote, based on
16 evidence of threatened misappropriation and not merely on the
17 information the person knows. I'll let Michael take it from
18 here.
19 MR. SHEEHAN: Thank you, counsel.
20 THE COURT: Okay. So that's the provision I was
21 looking at. It says, "In a civil action, a court may grant an
22 injunction to prevent any actual or threatened misappropriation
23 described in paragraph 1," which I don't think defines
24 misappropriation, "on such terms as the court deems reasonable
25 provided that the order does not prevent a person from entering
78
1 into an employment relationship and that conditions placed on
2 such employment shall be based on evidence of threatened
3 misappropriation and not merely on the information the person
4 knows."
5 MR. SHEEHAN: So Your Honor, what would be a
6 reasonable restraint and order in a circumstance where
7 inevitable disclosure is found, would it be something short of,
8 the only thing we've asked for, and that is, okay, you can't --
9 let's say it's a customer solicitation. You can't solicit
10 these customers. Let's say it's a marketing person, and you
11 can't be involved in certain go-to-market strategies.
12 And here, we imposed what we think is a reasonable
13 restraint, not conceding that there are any trade secrets, not
14 conceding anything but just as a good corporate citizen, the
15 new employer imposed, and Mr. Smith agreed, that he will not
16 engage in any work that involves Optum products, and he's
17 limited to working as the company is right now, to finding
18 solutions for its employees, the employees of the founders.
19 Those would be -- you know, if they rushed into the court and
20 asked for a TRO, I think that, at the end of the day, if the
21 court found all the elements, that might be the remedy. It's
22 unnecessary to get there because we've self-imposed --
23 THE COURT: And this is part of the reason earlier I
24 went through the three bases for possible relief concerning
25 confidential information, the contract, federal statute and

79
1 state statute, because is the limit in the federal statute that
2 you helpfully pointed out also in the Massachusetts statute?
3 MR. SHEEHAN: It's not because the Massachusetts
4 statute doesn't even recognize inevitable disclosure. Now, I
5 think counsel will argue --
6 THE COURT: No. Actually, what I was pointing out and
7 you agreed with me -- perhaps you misunderstand. It says,
8 "actual or threatened misappropriation may be enjoined upon
9 principles of equity."
10 MR. SHEEHAN: Okay. I see what you're pointing to
11 there. So that's different, though.
12 What we have under the Massachusetts act is an act
13 that was effective October 1, 2018. Not surprising there are
14 no cases on point for us here. But what we have is an entire
15 body of case law under the Massachusetts common law. And where
16 those courts address the issue and borrow from other states in
17 their Uniform Trade Secret Act application, and there isn't a
18 single case that found inevitable disclosure under
19 Massachusetts law satisfying the element of likelihood of
20 success on the merits. And there's nothing in the new act that
21 suggests that this is a change in that aspect of the law.
22 And you would think if there was going to be that
23 radical departure from what the law has been for decades,
24 they'd say so. And certainly you would think if they had done
25 that, they would have borrowed from the Defense of Trade Secret
80
1 Act and said, but if that's the basis for the injunction, it
2 wouldn't be reasonable to throw the person out of work or bar
3 them from being employed.
4 But again, I bring this up as a point of equity
5 because what the parties have done for weeks leading up to
6 mediation and attempted after mediation is to elicit from the
7 plaintiff what measures could we take, what measures could
8 Mr. Smith's employer take, along with Mr. Smith, to satisfy
9 your concerns so that he can continue to work and you're not in
10 fear of your trade secrets, whatever they are, being disclosed.
11 And they've been mute on that point, Your Honor.
12 It's been an insistence, because they know he didn't
13 take anything, yet they painted that picture, and they want to
14 show -- they want -- they made this public, although they knew
15 they had an arbitration agreement with confidentiality, because
16 their illicit purpose for being here today is to go back to
17 their legion of employees with a scalp on a stake and say, You
18 try it, too, and this is what will happen to you. And while
19 they're at it, they want to intimidate a company in its nascent
20 stages. Try it again.
21 THE COURT: Well, this is -- this is part of the
22 reason I'm very careful in these covenant not to compete and
23 trade secret cases. And because there are valid -- in some
24 cases there are valid reasons for people who really do have
25 access to trade secrets, people could use them for a

81
1 competitor.
2 MR. SHEEHAN: There are --
4 MR. SHEEHAN: There are times I'm sitting on that side
5 of the courtroom, Your Honor.
6 THE COURT: Well, I notice his employment agreement
7 has similar provisions. So I mean, they're valid. I haven't
8 done one of these cases in a long time, but a covenant not to
9 compete has to be reasonable, and you haven't really argued
10 that -- well, the one year is within the range of reason --
11 he's going to do better if he listens to me. Isn't that
12 obvious?
13 MR. RIDEN: My apologies, Your Honor.
14 THE COURT: If a noncompete is too broad, I don't
15 re-write it. I would take the position that you wrote it, you
16 wrote it in a way that's unenforceable; too bad. Because I do
17 think they have not just the potential but a probably realized
18 potential to have an interaural effect, to inhibit conduct that
19 can't properly be prohibited in a noncompete, would be
20 unreasonable.
21 But that hasn't been the argument or the heart of the
22 argument here. But part of the reason -- and I almost always
23 decide TROs based on affidavits, but here there are just very
24 different descriptions of what Mr. Smith did for Optum and what
25 they think he's doing for ABC. I mean, I just have myself a
82
1 few questions that emerge from the chronology.
2 MR. SHEEHAN: Your Honor, Mr. Smith is here, prepared
3 to testify. I would like to address the point on the
4 construction and the unreasonableness of the contract, because
5 I think that point became very clear in the back and forth
6 between counsel and Your Honor. And that is, okay, so it's not
7 plain on its face that it's unreasonably broad and therefore
8 stricken, but what's plainly clear is that this plaintiff, this
9 behemoth in the health care industry construes the noncompete
10 to prohibit Mr. Smith from working anywhere in the health care
11 industry.
12 When Your Honor suggested he could go back to Bain,
13 the answer wasn't a yes. It was a yes but not with any health
14 care clients. So they're using their weight, their muscle and
15 force. They can afford whatever litigation they want against
16 people like my client, and they can create this interaural
17 effect to the rest by saying, Our construction is you can get a
18 job but not in the health care industry that employs, what, 20
19 percent of the work force?
20 THE COURT: Well, the agreement is drawn more
21 narrowly, and the question for me is are they reasonably likely
22 to prove that he violated a noncompete provision or the
23 nondisclosure provisions in what he's doing now. My ruling
24 wouldn't be on whether he could work in the health care
25 industry, but, you know, that was an illuminating answer.

83
1 MR. SHEEHAN: So when we look at the more narrow
2 construction, there's nothing to suggest, because we have his
3 sworn testimony, and he'll come up, Your Honor, that he is not
4 doing anything with regard to Optum products. And his entire
5 focus and attention and work will be on the founders. And this
6 is a group of constituency for which he didn't engage in any
7 activity when he worked at Optum. So what he's doing doesn't
8 violate, doesn't even run afoul of his --
9 THE COURT: Well, for example, is he doing work on
10 pharmacy services, I think is something the plaintiff said he
11 did at Optum and they believe or suspect that he's doing at
12 ABC.
13 MR. SHEEHAN: I think when Your Honor asks that
14 question, he'll explain.
15 THE COURT: The lawyers will get to question him
16 first.
17 MR. SHEEHAN: I didn't know how you were going to
18 proceed. And they raise that in the context of he was privy to
19 pricing information. He does not have granular pricing
20 information. And even if he were engaging in that activity
21 directly against Optum, he doesn't have that information. And
22 he'll testify to that. And I think it's unreasonable for --
23 there's no basis to suggest that he's got a photographic memory
24 and he could memorize all of that. And he'll tell you he
25 didn't even have access to that type of information when he was

84
1 at Optum. But more to the point, he's not engaging in that
2 activity. That's not his job.
3 So I think when we get to the legal arguments, there
4 isn't a substantial likelihood of success on the merits. And I
5 think as everyone agrees, the burden is squarely on this side
6 of the room. And they've got the proof on every element. They
7 can't establish likelihood of success on the merits of a trade
8 secret claim, starting, number one, there isn't a trade secret
9 in the record, that is, a trade secret that controlling case
10 law would say --
11 THE COURT: So why on October 29, it appears that he
12 printed out the Fact Book, and then on December 10, whatever
13 the date is, he printed out another document that says
14 "Confidential" on it. Aren't those trade secrets?
15 MR. SHEEHAN: I don't know. I mean, they allege that
16 they're trade secrets and they give us these broad categories.
17 First, they don't have any evidence that he has them. So
18 really --
19 THE COURT: When you say there's no evidence that
20 there's a trade secret involved, I don't think it's quite right
21 to say there's no evidence and circumstantial -- well --
22 MR. SHEEHAN: No. The case law that we've cited in
23 our brief establishes that we can't just say, Well, there's a
24 Fact Book and it was important and it's a trade secret and
25 therefore it's a trade secret. We don't concede that point.

85
1 And the case law makes it very clear that a plaintiff making a
2 trade secret claim has to establish the elements of a trade
3 secret.
4 And what they didn't do here, as Your Honor pointed
5 out, is in order to put evidence into the record so a court
6 could even get to a reasonable likelihood of success on the
7 merits on a trade secret claim was file with the court and
8 serve under protective order with us what they claim those
9 trade secrets are. They didn't do that. What they did is they
10 attached redacted documents that don't show you or us anything,
11 and then they allege the broad category.
12 So I'd say, Your Honor, it sounds technical, but the
13 controlling case law says they have not presented this court
14 through the reply brief a single thing that constitutes a trade
15 secret under the law.
16 Secondly, they don't have any evidence to rebut
17 Mr. Smith's sworn testimony that he has or he took anything.
18 And the inferences are rebutted when they simply say with
19 speculation, Well, he did this and therefore he must have been
20 using it for a competitor.
21 Consider this fact. Somehow in their chronology, the
22 plaintiff says on December 4 a couple of employees came forward
23 to Mr. Wolin or one employee came forward to Mr. Wolin
24 reporting that Mr. Smith had asked this employee and a group of
25 others for some information that seems very unusual, it was

86
1 alarming to them. And there's concern now, what was this
2 Mr. Smith doing?
3 Now, let's put it in context. On December 4,
4 Mr. Smith hadn't confided in anyone that he was thinking about
5 going to the new joint venture. He didn't have a job. Didn't
6 have an offer. And he hadn't confided in anyone. He was at
7 that point not anyone where they just thought, Hmm, this guy is
8 suspicious, what's he doing, is he involved in something,
9 counter-intelligence. Well, if that was true, and that's again
10 the picture they paint, two days later they let him unfettered
11 spend a whole day in what they say is a first-time,
12 one-time-only top secret meeting? It makes no sense, Your
13 Honor. It makes no sense.
14 What does make sense and is the only reasonable
15 inference is every explanation set forth in detail in
16 Mr. Smith's testimony and the unequivocal denials, every time
17 and every moment he was at Optum he was working in Optum's
18 interest, for Optum, earning his money that Optum was paying
19 him.
20 And he expected, when he resigned, that he
21 continued -- when he announced his resignation, that he would
22 continue to work at Optum for the rest of the year. He didn't
23 think he was going to a competitor. Neither did they, until
24 they got worried about other employees leaving. We can use
25 this when we go in court and create a little fear for the rest
87
1 of the employees. We might be able to poke at this potential
2 disruptor in the market.
3 So Your Honor, at the end, and certainly at the end of
4 what's been filed, there isn't enough to show a substantial
5 likelihood of success on the merits. They haven't shown and no
6 case will support an argument that inevitable disclosure equals
7 irreparable harm under the law.
8 THE COURT: No. There are lots of cases that hold
9 that inevitable disclosure is irreparable harm, I think. What
10 they, or at least some of them say is -- he knows what I'm
11 going to say. You said it before. No, no. That inevitable
12 disclosure, sometimes at least, has been found not sufficient
13 to show a reasonable likelihood of success on the merits.
14 MR. SHEEHAN: Right.
15 THE COURT: And they're closely related but distinct.
16 And this is why I went through the standards with you before.
17 In the First Circuit, reasonable likelihood of success on the
18 merits is the sine qua non. It's essential to getting a
19 temporary restraining order or a preliminary injunction. If
20 you make a strong showing on that, a more relaxed showing of
21 irreparable harm is sometimes said to be sufficient. But I
22 think that's the distinction, right?
23 MR. SHEEHAN: I think that's the distinction. And so
24 none would be issued unless there was, in order to establish
25 success on the merits, actual theft --

88
1 THE COURT: You know, I have to -- because this is an
2 arbitration case, you know, I'm not going to try -- as
3 ultimately arbitration will be ordered. I have a question
4 about whether the Massachusetts statute intentionally -- well,
5 even if it was unintentionally -- if it manifests the intent to
6 take this intriguing issue out of this type of trade secret
7 litigation and say that inevitable disclosure, even if you
8 can't prove that it's already occurred, is sufficient for
9 reasonable likelihood of success on the merits as well as
10 irreparable harm. Because that is what it communicates to me
11 at the moment, in effect.
12 All right. Is there anything more you'd like to say
13 right now?
14 MR. SHEEHAN: If I could just look at my notes.
15 THE COURT: Sure. And consult your colleagues.
16 MR. SHEEHAN: I think for now I've made my points,
17 Your Honor.
18 Well, one last -- I would just concur on the court's
19 comments about in the equities and the balancing of the
20 interests. We're talking about Mr. Smith and his livelihood
21 and his ability to be employed and not just be employed, with
22 his reputation intact, and that's why the motion to compel
23 arbitration, and but continue to be employed and support his
24 family. And I think any order that would put him out of work
25 would not only not be appropriate under controlling law but, in

89
1 the court's discretion in weighing the equities, would be too
2 broad and too harmful to my client. Thank you.
3 THE COURT: Do you want to respond very briefly to
4 that?
5 MR. RIDEN: I'll respond very briefly to that. We
6 have just a novelty here if the court wants to hear it. My
7 colleague, Russell Beck, was one of the advisors and editors of
8 the Massachusetts Uniform Trade Secrets Act and can answer any
9 academic questions the court may have about what was going on.
10 But my understanding of the Act is that it did represent a
11 significant change in the law.
12 And I'll just make a few points. At no point has
13 Optum taken a position that he can take no job in the health
14 care industry. That overstates our position altogether. For
15 instance --
16 THE COURT: That's what I understood you to say a
17 couple of hours ago, but now you've had more time to think
18 about it.
19 MR. RIDEN: For instance, if he wanted to take a job
20 as a benefits manager for JP Morgan Chase and work there,
21 that's within the health care industry, doesn't offend our
22 client in any circumstance. On this point about the competitor
23 versus customer dichotomy about how they feel that that is --
24 it creates a sense of unfairness on our part to at one point
25 tell Mr. Smith that he is going to a customer. In fact, many

90
1 of Optum's customers are also its competitors. CVS Caremark,
2 for instance, is a significant competitor of Optum and is at
3 the same time a customer of Optum. This is very common. They
4 have many entities that are like this in the universe. So it's
5 not a mutually exclusive analysis between the two.
6 Finally, I'll leave it with this on equities. Optum
7 is very judicious in deciding whether to enforce a noncompete
8 agreement. You will find in this jurisdiction I believe not a
9 single case where Optum has sought to enforce a noncompete
10 within the Commonwealth of Massachusetts. And its choice to do
11 so here was after great deliberation. It didn't seek to
12 enforce a noncompete against Mr. Stoddard when he left Optum to
13 go work for a competitor, but in this circumstance, it is
14 seeking to enforce its noncompete. So I do appreciate your
15 time, Your Honor.
16 THE COURT: We're going to break for lunch. You can
17 be seated. I've just got a couple of reflections. One -- and
18 I don't understand that anybody disputes this. I believe in
19 the circumstances of this case particularly I have the
20 discretion to hear testimony.
21 In the Fourth Circuit case Blackwelder, 550 F. 2d 188,
22 1977, they write, "We agree with Judge Friendly that finding
23 facts from conflicting affidavits is not always possible and
24 endorse the Second Circuit's suggestion in Semmes that a
25 perplexed" -- I don't know if I'm perplexed -- "that a

91
1 perplexed district judge may in his discretion require live
2 testimony 'where everything turns on what happened and that is
3 in sharp dispute.'"
4 So implicitly, I mean, is there anybody who says I
5 don't have the authority to hear testimony? Assuming the case
6 is not stayed. I'm going to get to that in a minute.
7 MR. SHEEHAN: Yes. Subject to our motion, subject to
8 our arguments on the motion to compel, Your Honor, I would take
9 this position.
10 On a TRO, on a TRO, what the court would do and what
11 the cases provide is where there's a conflict in testimony, the
12 plaintiff has not met its burden of showing a substantial
13 likelihood on the merits. And what the court then would in
14 most cases do would say, Okay, we're going to set up a date for
15 a preliminary injunction hearing; and get ready, it's going to
16 be pretty soon.
17 Here, Your Honor, I think that same case law directs
18 this court to -- if what we have are he said/she said on the
19 things that appear important to Your Honor, that the case law
20 compels this court to deny the TRO and, because of the
21 arbitration agreement, send us to arbitration for the rest of
22 the proceeding.
23 THE COURT: There's going to be another issue as to
24 whether temporary injunctive relief includes preliminary
25 injunctive relief, there's a distinction between temporary and

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1 permanent. But all I have in front of me now is a request for
2 a TRO, not for a preliminary injunction.
3 I mean -- so I mean, you're not bashful. Is it your
4 position that I don't -- putting aside, you know, what you
5 think I should do in the exercise of my discretion, is it your
6 contention that I don't have the discretion, I don't have the
7 authority, to hear testimony?
8 MR. SHEEHAN: I always hate the question when a judge
9 says, Are you saying I don't have the power? I didn't say
10 that. Certainly you have the power. But the case law that
11 governs says no. The case law that governs says in this
12 circumstance, the case should be -- the TRO should be denied.
13 THE COURT: All right. And what's Optum's position,
14 that I do have the authority, the power, to hear testimony?
15 MR. RIDEN: Yes, Your Honor. We also believe that,
16 just based on the undisputed facts and the forensics records,
17 that you don't need the testimony.
18 THE COURT: Okay. Because that's -- I haven't -- I
19 find I have the power. I just mentioned these cases, and I've
20 seen it done. I think I've done it myself. Although
21 frequently, you know, you do it on affidavits and the rules of
22 evidence don't apply. But I'm going to think about whether I'm
23 going to hear testimony or not. I may not. But if I don't,
24 one of you will be disappointed.
25 MR. SHEEHAN: Your Honor, if I could, I didn't mean

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1 to, when I was being flip about power, create confusion. I
2 mean, I think it was Justice -- Chief Justice Marshall who went
3 on about the difference between power. Yes, every judge in a
4 black robe has the power. But the question is the authority --
5 THE COURT: Well, I said authority. But I think --
6 I'm sorry. What's your point?
7 MR. SHEEHAN: My point is that the case authority that
8 governs the issue and instructs the court, this court --
9 THE COURT: What case? That says that I shouldn't --
10 I just read you -- although I think they're on preliminary
11 injunctions, that when you have conflicting affidavits and you
12 have to find facts, it's often not just permissible but
13 appropriate to hear testimony to resolve the -- you have an
14 opportunity to resolve the questions.
15 MR. SHEEHAN: The case, I think it's the U Pro case.
16 We have it in our brief. If you give me a moment, I'll pull it
17 up. It's the one that says when there is that conflict, the
18 TRO -- the plaintiff has not met its burden for a TRO.
19 THE COURT: U Pro?
20 MR. SHEEHAN: U Promise, Your Honor.
21 THE COURT: What's the first letter? "U"?
22 MR. SHEEHAN: "U." And I think to be clear on a finer
23 point, it's when there is conflicting evidence, whether it's
24 affidavit or by testimony, when there's conflict, it's not for
25 the court to make the finding at a TRO stage. The conflict

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1 itself means that the plaintiff has not established, has not
2 met its burden of proof and the TRO should be denied.
3 THE COURT: I'll take a look at it. Frequently there
4 are conflicts, and this is what judges and juries do. They
5 judge credibility. But I'm going to think further about
6 whether I believe testimony is necessary. It may be that I'll
7 issue the TRO.
8 One of the things I don't have an answer to is why at
9 9:51 a.m. on October 29 a confidential document was printed
10 out; a minute later a resume was printed out; and later that
11 day your client met with Mr. Stoddard. Frequently judges have
12 to find facts from circumstantial evidence.
13 About 20 years ago, nobody told me the FBI was tipping
14 Whitey Bulger off to people informing on him who then got
15 murdered, and I looked at the chronology and pieced together
16 evidence. I came to that conclusion. And now an FBI agent is
17 serving 40 years for having done just that.
18 So it's circumstantial evidence. But I'm just -- I'm
19 not saying I'm going to decide this against you, but it's --
20 and I have similar questions, like for Mr. Wolin, you know, I
21 have questions. But it's a TRO. So that's one. I'm going to
22 think about whether I'm going to require testimony. If I do,
23 it will be Mr. Smith. You'll talk to him over the lunch break.
24 And this isn't -- you know, all the affidavits are
25 under oath and testimony of course is under oath. So every

95
1 witness has an obligation to testify truthfully, and an
2 intentional failure to do that concerning a material matter is
3 a crime. It's perjury. Mr. Smith's would have an additional
4 consideration. The Federal Act, I was surprised to see, is in
5 Title 18. It's a criminal statute. So he may conceivably have
6 a Fifth Amendment right, which you should talk to him about,
7 not to testify. I'm not --
8 MR. SHEEHAN: That's not an issue, Your Honor.
9 THE COURT: I'm just saying, and I'm not -- I'm
10 totally open-minded. I just, as I say, I was surprised to see
11 Title 18 was involved. So I just, in fairness, mention to any
12 witness in any case if there's exposure, you know, you should
13 know about this.
14 MR. SHEEHAN: Your Honor, may I?
16 MR. SHEEHAN: After hearing Your Honor and thinking
17 about the bigger picture, I urge you to put Mr. Smith on the
18 stand now because that's important. This has been a public
19 proceeding thus far, and I want him to be able to take the
20 stand.
21 THE COURT: I want to see what's really in dispute and
22 what's not.
23 The other thing is, you know, it's now 1:15. I'll
24 have you come back at 2:30, which is later than usual, because
25 I'll have my decision transcribed, I expect, not the whole

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1 hearing but what I said on the stay transcribed by the time you
2 come back, at least a draft of it. I won't change it, but if
3 it requires any correction, I'll correct it. And I may turn it
4 into a more formal memorandum and order.
5 I don't have a motion yet. I haven't denied a stay.
6 I think when you see what your colleagues came up with, you'll
7 see whether, if there's an appeal taken under Section 16, a
8 stay is automatic. There's a split in the circuits. And it's
9 discussed in -- you're supposed to give me the cases --
10 Combined Energies, 495 F. Supp. 2d 142, a 2007 case.
11 And if I have to, you know, decide this, one of the
12 things I'll be asking you, probably unsurprisingly, since the
13 lawyers are doing such a good job, is, you know, what about
14 cases where the issue is not discovery, which is what it was in
15 that case, but I think it was a dispute of whether -- it was a
16 case about whether a dispute was arbitrable and whether
17 discovery should proceed in the District Court. If that's what
18 we were talking about, if you had a right to appeal, I'd stay
19 it. But here, the plaintiff is arguing that they're being
20 irreparably harmed. But also a judge has an obligation to take
21 up and decide a TRO promptly.
22 So I haven't denied -- I haven't even received the
23 motion for a stay. I certainly haven't denied one.
24 MR. SHEEHAN: It's very close.
25 THE COURT: You just want to look at that or think

97
1 about that. And then if there were a stay, a question I'll ask
2 you is the traditional factors that get considered with regard
3 to a stay pending appeal are discussed by the Supreme Court in
4 Hilton, 481 U.S. 770.
5 And then there will be a question of whether those
6 factors apply in this context, in the FAA context, because some
7 cases say, Well, the stay is automatic unless the appeal is
8 frivolous. I don't know whether that's really different or
9 similar to the Hilton standard. But the Hilton standard would
10 also -- the Hilton standard is like a TRO/preliminary
11 injunction standard, except you don't have to show a real
12 reasonable likelihood of success on the merits. It's lower. I
13 wrote about this long ago in Canterbury Liquors, 1744 --
14 sorry -- 999 Federal Supplement 144 at 149. So that's what I'm
15 going to be talking about.
16 But, but, you know, it was my hope, because I didn't
17 anticipate the stay issue, that I'd hear your argument, and
18 either I would feel comfortable deciding on these voluminous
19 affidavits or I'd want to hear some targeted testimony,
20 including, you know, what happened on October 29; why did it
21 happen. Because, you know, this is a significant matter for
22 Mr. Smith. It's a significant matter for Optum. And the
23 longer it goes, the more uncertainty and anxiety there is. And
24 the case is going to get to arbitration at some point.
25 With regard to the stay -- you can talk about this

98
1 over lunch. If I have the discretion to impose conditions on
2 the stay -- and I think the First Circuit would probably take
3 it up on an expedited basis, although I don't know what that
4 means -- but it's entirely foreseeable the plaintiff will argue
5 we're being irreparable harmed, he's working, he's using our
6 confidential information.
7 One solution would be that he agreed -- I mean, you
8 could reach an agreement on this that I might well go along
9 with. If you agreed he wouldn't work or communicate with ABC
10 for a month or whatever time it's going to take for the
11 expedited appeal, they could keep paying him if they wanted to,
12 because I'm not anxious to immunize my decisions from appellate
13 review. But there's the directions we get for deciding TROs
14 promptly when there's an allegation that there's ongoing
15 irreparable harm. And I've carved out today and I have at
16 least tomorrow morning. So if I was going to hear some
17 testimony --
18 MR. SHEEHAN: Your Honor, with regard to the facts
19 that you may be looking over during the break, the October 29
20 Fact Book document is addressed in detail by Mr. Smith at
21 paragraph 20 of his affidavit, and he will -- if the court has
22 further questions after seeing that, Mr. Smith will be prepared
23 to testify about that.
25 MR. SHEEHAN: And with regard to precautionary

99
1 measures that would eliminate any irreparable harm alleged by
2 plaintiff during the pendency of an appeal, anything short of
3 Mr. Smith not working for the joint venture is something -- is
4 the open question we've put to them since December 21st and
5 will continue --
6 THE COURT: I may sit down with you later today on
7 that, too, because, as I said before, part of the reason I
8 focused in on the precise language of the noncompete is it --
9 and part of the reason it does at the moment appear to be
10 overbroad, it focuses on what did Mr. Smith do for Optum and
11 what does he do now. It may very well be if I hear from
12 Mr. Smith about what he's doing now, you can reach that kind of
13 agreement when it wasn't possible previously. Because I do --
14 you know, if there's a way for Mr. Smith to work for ABC and
15 for Optum not to have any legitimate concerns, that would be
16 good.
17 MR. SHEEHAN: If that were only the case. I'm more
18 optimistic that if the court hears the testimony, the court
19 will be more inclined to see that there's no irreparable harm.
20 THE COURT: It's now 1:30, and although -- 1:25. Plan
21 to come back at 2:30. Plan to come back at 2:30. And
22 hopefully I'll be ready for you then, okay? Either I'll give
23 you a decision or say I'm going to give you a decision based on
24 the affidavits later today or tomorrow morning, or I'll say
25 let's hear from Mr. Smith, and then Mr. Wolin probably be next.
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1 Okay?
3 (Recess taken 1:28 p.m.)
4 THE COURT: Would the parties like to be heard on how
5 I should proceed further?
6 MR. RIDEN: Are you looking for --
7 THE COURT: Well, here. I'll be more precise. Is
8 anybody asking me to wait until I receive a motion to stay and
9 a response before doing -- and decide it before doing anything
10 further in this case? Are you asking that I decide on the
11 affidavits, or are you advocating that I should hear from
12 Mr. Smith and Mr. Wolin at least?
13 MR. RIDEN: Your Honor, if I may, if you feel like you
14 can decide on the affidavits, it's our position that, it's our
15 preference that you do decide on the affidavits.
16 THE COURT: You don't want to hear from Mr. Smith?
17 MR. RIDEN: We believe that the undisputed facts on
18 the record are sufficient to establish enough circumstantial
19 evidence to raise the issues that we've talked about with
20 respect to the TRO on inevitable disclosure doctrine,
21 misappropriation claims, Your Honor. That said, we certainly
22 have witnesses who are here and ready, willing and able to
23 testify if the court would like to hear them.
24 MR. SHEEHAN: Your Honor, our position -- we will be
25 filing the motion to stay momentarily. As soon as I find out

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1 that it's been filed, I'll inform the court.
2 THE COURT: You can bring it to court --
3 MR. SHEEHAN: I think it's going to be with a press of
4 a button.
5 THE COURT: That's fine.
6 MR. SHEEHAN: And because that motion asserts that the
7 stay should be automatic and it is jurisdictional, my next is
8 provisional. And that is, you know, if the court were to deny
9 our motion to stay, which we've made and now we're going to
10 file the papers in support of, I would prefer if the court is
11 going to proceed to rule on the issues of the TRO that it hear
12 from Mr. Smith today while he's here.
13 THE COURT: Okay. One, I am going to hear from
14 Mr. Smith. One -- even the cases that say the -- from what
15 I've looked at, and I did some more reading over the break, the
16 cases I've read all involve denials of a motion to compel
17 arbitration, which I haven't denied. They're a different
18 posture. If I had denied the motion to compel arbitration, and
19 the issue was should this go ahead with discovery, I'd stay the
20 case, but even though there's some flexibility, some
21 discretion, and even where -- so I do think there are serious
22 issues to be considered.
23 I do think that if I was going to decide the case
24 based on affidavits, there are a lot of questions in my mind,
25 and I'd make the decision based on the information I have, but
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1 I can't tell you which of you would prevail. You both did a
2 good job at advocating your positions, and we do have the
3 witnesses here. I think you know what I think the issues are,
4 primary issues are.
5 So since I haven't denied a motion to compel
6 arbitration, and I think this is, to me, clearly what the
7 contract between the parties anticipated, and I do want to make
8 a well-informed decision, I'll hear from Mr. Smith first. And
9 plaintiff can question him and defense counsel can question
10 him. I may have some questions as well.
11 Although I think this is probably not necessary, I'm
12 directing that the parties order the transcript of these
13 proceedings, but we're starting late because I asked the
14 exceptional stenographer to make an excerpt of my decision from
15 this morning. So if there's going to be some expedited appeal,
16 this may help you. At some point I may translate it. I may
17 revise it to make a more formal memorandum and order. But
18 here, you can make it Exhibit 1 of today's date. So you have
19 that.
20 Would plaintiff like Mr. Smith to be called in the
21 circumstances?
22 MR. BECK: Under the circumstances, Your Honor, we
23 would call Mr. Smith to the stand.
24 THE COURT: I'll just say for the record, I mean, this
25 is influenced -- Mr. Smith, you can go up there. This is

103
1 influenced -- this is a motion for a temporary restraining
2 order. There's a contention that the plaintiff is suffering
3 irreparable harm. We're all versed in this. The witnesses are
4 here, and I think it would be helpful for me to hear from a
5 couple of them with a focus on the key issues that came into
6 sharper focus in the excellent arguments this morning.
7 MR. SHEEHAN: Your Honor, would you prefer that
8 Mr. Smith be directed and then cross-examined?
9 THE COURT: Yes -- well, no, the plaintiff will
10 question him first.
11 MR. SHEEHAN: Fair enough.
12 THE COURT: But he needs to stand and be sworn now,
13 please.
14 DAVID SMITH, Sworn
15 MR. BECK: Your Honor, I assume you want me to stand
16 over here so --
17 THE COURT: Yes. If you use any documents, you'll
18 need to use the document presenter, which Ms. Bono can assist
19 you with, if necessary.
20 MR. BECK: Thank you, Your Honor. And may I also ask,
21 exhibits that have been already been submitted by way of
22 affidavit, do you consider those to be in the record so that
23 I --
24 THE COURT: I do consider them to be in the record.
25 MR. BECK: Thank you, Your Honor.

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1 DIRECT EXAMINATION BY MR. BECK:
2 Q. So, Mr. Smith, can you please introduce yourself to the
3 court?
4 A. Sure. My name is David Smith. I'm formerly of Optum,
5 currently working with ABC.
6 Q. Okay. And I want to turn -- let me just ask you a few
7 questions about Optum and about ABC and the competitive nature
8 of these. Is it still your position that Mr. Weissel said to
9 you that Optum is more of a competitor -- I'm sorry, said that
10 Optum is more of a customer than a competitor?
11 A. Yes.
12 Q. That's still your position?
13 A. Yes.
14 Q. Okay. And I will ask a series of questions and I will
15 just ask if you could agree to just answer my questions without
16 elaboration just the way you did. Are you able to do that?
17 A. Yes.
18 Q. Thank you. So you -- with regard to Mr. -- lost my
19 page -- Mr. Weissel's comments, because of Mr. Weissel's
20 comments, is it your testimony that because of that you believe
21 that Mr. -- that ABC is not a competitor of Optum?
22 A. Not solely because of that.
23 Q. Why else?
24 A. I've been in the industry for a long time, and when ABC or
25 the company was initially announced, it was announced under the

105
1 guise of essentially being a benefits consultant organization
2 for the founding companies. And so as a kind of leading
3 hypothesis when this news came out, you know, I think we talked
4 earlier about some -- you know, an example of something that
5 doesn't compete with Optum being a benefits consultant where
6 somebody who helps employers or is the employer themselves
7 understand what types of benefits or what types of insurance or
8 what types of employee applications, what types of services
9 their company's employees can or should use. But that extends
10 to 401(k)s and other things as well.
11 Q. Where did you get the information about ABC?
12 A. From the press.
13 Q. So everything that you've assumed, you've got a bunch of
14 information from the press doing research on them?
15 A. Yes. So it was a fairly prominent story, I think, from
16 January on. We're talking about my perception of ABC as of the
17 comment that Mike Weissel made.
18 Q. As not a competitor?
19 A. Right.
20 Q. Do you view them as not a competitor at this point?
21 A. Yes.
22 Q. You continue to?
23 A. Yes.
24 Q. And was there ever a point that you viewed them as a
25 competitor?
106
1 A. No. The comment that Mike made, we were in a working
2 session together talking about a few different companies out
3 there that were different than what traditional health care
4 companies have looked like, and we were trying to figure out
5 whether or not some of them were competitors and if they were,
6 what actions they might take, what actions Optum might take, so
7 trying to play out the strategy as a --
8 Q. So to answer my question, so you've never considered them
9 to be a competitor?
10 A. No.
11 Q. No, you've never considered them to be a competitor?
12 A. No.
13 Q. And so -- and that -- is it the case that someone could be
14 both a customer and a competitor?
15 A. Yes.
16 Q. And, in fact, you -- while at Optum, you had companies
17 like that, right?
18 A. Yeah. I think you raised a good one which was --
19 Q. CBS.
20 A. -- yes.
21 Q. And so is it that you're -- well, let me ask you
22 something. Do you know who Amy Wells is?
23 A. The name rings a bell. I feel like she works at Optum,
24 but I'm -- I don't exactly remember.
25 Q. Do you recall asking her to put together a list of

107
1 competitors and to -- well, to update the list of competitors
2 that you had put together?
3 A. I don't. Sorry.
4 Q. Do you recall that on August 27, 2018, you received an
5 email from Ms. Wells with a list of companies that -- that you
6 and she had put together as competitors?
7 A. I -- I don't.
8 Q. Okay. Do you recall that -- we'll get to show it to you
9 in just a moment.
10 A. Yeah.
11 Q. I just want to understand what you do know and what you
12 don't know.
13 Do you recall at some point identifying Amazon, Berkshire
14 Hathaway, JPMC -- JPMC, JP Morgan, the ABC company -- as a top
15 nontraditional disrupter among the list of competitors that you
16 provided to Ms. Wells? Do you recall doing that?
17 A. I don't recall this interaction, no.
18 MR. BECK: Your Honor, may I approach the witness?
19 THE COURT: Yes. Although, are you able to -- you can
20 give him a copy. But if you put it up on the presenter,
21 everybody will be able to see it simultaneously.
22 MR. BECK: I will do that, and I will give a copy to
23 opposing counsel.
24 Q. Mr. Smith, do you recognize this document?
25 A. No, but --
108
1 Q. It's a --
2 A. -- I can understand what it is.
3 Q. You understand it's an email from Amy Wells to you?
4 A. Yeah.
5 Q. With a copy to Ananya Banerjee?
6 A. Ananya.
7 Q. Ananya Banerjee?
8 A. Yeah.
9 Q. Do you recall now seeing this email before?
10 A. No, but I know who Ananya is. She used to work on
11 parts of --
12 Q. Do you recall sending an email to Amy Wells with a list of
13 competitors as she identified here?
14 A. Sorry, sending an email -- I sent an email to Ananya --
15 Q. Yeah, so if you read Amy's email --
16 MR. BECK: Actually, do you have two more copies of
17 that? Unless there's an objection, I'll mark this as Exhibit
18 2, and I'll have a copy.
19 A. Sorry, I have read this email now.
20 Q. You've read the email?
21 A. Yeah.
22 Q. And you see that what she tells you is in response to a
23 list that you had sent.
24 A. Right.
25 Q. She says "I took your list and updated it with those
109
1 listed in the business plan." Do you see that?
2 A. Yeah.
3 Q. And the list that she's talking about is the list of
4 competitors that you were asking about; is that right?
5 A. Yes.
6 Q. Yes. And as she says, the items in bold reflected those
7 which were included in the business plan. In other words,
8 those competitors in the business plan; is that right?
9 A. That's what the email says, yeah.
10 Q. Right. And if you look on the second page, the items not
11 in bold, meaning your original items, included top
12 nontraditional disrupters and you identified Amazon, Berkshire
13 Hathaway, JPM, ABC; isn't that right?
14 A. It says this in the email, but I don't know that I said
15 it --
16 Q. So don't -- you can --
17 A. That is correct, sir.
18 Q. -- you can explain to your counsel. Just --
19 A. It's what the email says, yeah.
20 Q. Yes. And this was a list that's non-bolded, as she says,
21 am I correct? Am I reading correctly? She says "The items in
22 bold reflect those which were included in the business plan as
23 the update to the list that you had sent," right?
24 A. Yes.
25 Q. Okay. And Amazon, Berkshire Hathaway, JPM is not bold?

110
1 A. Correct.
2 Q. Listed as a top disrupter in a list of competitors.
3 A. Sorry, can you put that back up?
4 Q. Sure.
5 A. So for each of the other ones, it says "competitors" and
6 then for the AB -- the last one, it doesn't say competitors; is
7 that right?
8 Q. So fortunately I get to ask the questions.
9 A. Sorry.
10 THE COURT: Well, he --
11 THE WITNESS: Thanks. I just wanted to see it again.
12 Sorry.
13 THE COURT: I think -- you asked him if ABC was on a
14 list of competitors, and I think he was qualifying his response
15 to that by saying that ABC wasn't characterized as a competitor
16 in this document but as a top nontraditional disrupter.
17 THE WITNESS: Yes.
18 BY MR. BECK:
19 Q. Market disrupter.
20 A. I think it just says "disrupter."
21 Q. In a list of competitors that you were -- that you were
22 asking about according to -- according to Amy Wells?
23 A. Yes. So this is for a document that --
24 Q. That's all.
25 A. Okay.
111
1 Q. Thank you.
2 MR. BECK: Your Honor, I'd move the admission of
3 Exhibit 2.
4 THE COURT: I think I admitted it, but it is Exhibit
5 2.
6 MR. BECK: Thank you.
7 Q. Now, Mr. Smith, you're married?
8 A. Yes.
9 Q. And does your wife work?
10 A. She does.
11 Q. What does she do?
12 A. She is a pediatrician.
13 Q. Where?
14 A. St. Elizabeth's Hospital in Brighton.
15 Q. And how much does she earn?
16 A. About 100,000 a year.
17 Q. Okay. And can you talk about -- can you tell us, when did
18 you first decide that you were going to start interviewing, to
19 leave -- let me actually back up. It was your decision to
20 leave Optum, right? You weren't pushed out of Optum, were you?
21 A. Correct.
22 Q. All right. And so when did you make the decision to
23 leave? When did you make the decision to start looking to
24 leave?
25 A. I'm not sure I -- sorry.

112
1 Q. Certainly by June 24, you had emailed Mr. Gawande, right?
2 A. Yes.
3 Q. So by that point was there some time earlier when you
4 started exploring the idea of leaving?
5 A. No, I was -- I was happy at Optum. I was happy at Optum
6 kind of throughout. I think this was a once in a lifetime
7 opportunity for me and I was interested in this, but I wasn't
8 particularly interested in other -- wasn't looking at other --
9 other roles.
10 Q. We'll talk about the once in a lifetime opportunity. Let
11 me, also, just remember -- remind you that when I asked you
12 before if you could just answer my question rather than
13 volunteering --
14 MR. SHEEHAN: Your Honor, Your Honor, I object to that
15 admonition of the witness. This isn't a cross-examination
16 after a full direct.
17 THE COURT: Well, it's -- it's an adverse witness, so
18 he's permitted to go lead or in some respects cross-examine,
19 but -- Mr. Smith, if you understand the question, say what's
20 necessary and the personal knowledge that you can relate in
21 response to the question. Answer -- say what's necessary to
22 answer the question completely, but don't add more.
23 THE WITNESS: Okay.
24 THE COURT: If you don't understand the question, ask
25 for clarification, which is I think what you were just --

113
1 THE WITNESS: Yeah.
2 THE COURT: -- doing about when did you decide to
3 leave. Go ahead.
4 BY MR. BECK:
5 Q. Okay. So at some point you emailed Mr. Gawande, that was
6 on June 24?
7 A. Yes.
8 Q. Did you know Mr. Gawande?
9 A. No.
10 Q. And how did you decide to -- did you have a relationship
11 with Mr. Gawande at some point? Did you know of him?
12 A. I knew of him, but I did not know him.
13 Q. Okay. And prior to the 24th, June 24, 2018, had you ever
14 communicated with Mr. Gawande before?
15 A. No.
16 Q. All right. And you never -- is it true that you never
17 received a response from Mr. Gawande?
18 A. It's possible I got an automated response. I don't
19 recall.
20 Q. Okay. But you didn't get a response of any sort of
21 substance?
22 A. I don't -- no.
23 Q. Okay. What was the next time that you had any interaction
24 with ABC for purposes of any sort of job application process?
25 A. At some point in August, I think, I submitted a resume to

114
1 kind of an automated, you know, just an automated form.
2 Q. That was, you say, in August?
3 A. I believe so, yes.
4 Q. Okay. Is it possible that it was in September?
5 THE COURT: Well, you don't want to ask him if it's
6 possible, I don't think.
7 Q. Are you certain --
8 THE COURT: You want to -- the response is you want to
9 know was it September, right?
11 Q. Are you certain it was not in September?
12 A. It could have been in September.
13 Q. Okay. Was it on September 28?
14 A. It could have been on September 28.
15 Q. Okay. So you first -- so you submitted an application on
16 September 28. When did you hear next from -- or when did you
17 reach out to or hear next from ABJ -- or ABC?
18 A. I received a LinkedIn message from a recruiter on
19 August -- on October 7, but I did not see the message or
20 respond until October 18.
21 Q. Okay. And what was the substance of the conversation --
22 did you respond by email or did you respond by calling?
23 A. Through LinkedIn.
24 Q. Through LinkedIn. And what was the nature of that
25 communication?
115
1 A. The recruiter reached out. She had known me from my time
2 at Bain. She said that she was working with this health care
3 venture and that she was interested in talking and so we
4 exchanged a few messages, set up a time and then had a first
5 conversation shortly thereafter, I think, sometime in the
6 October 20 something.
7 Q. Okay. And was this Ms. Devol?
8 A. Yes.
9 Q. And when was the first time that you arranged for any sort
10 of conversation with somebody who worked at ABC?
11 A. It was with her.
12 Q. She worked for ABC or was she an outside recruiter?
13 A. I think -- that's a good question. I don't know.
14 Q. Okay. So the first -- other than Ms. Devol, who was the
15 first person you spoke with at ABC?
16 A. I spoke with Jack, the COO, for an interview.
17 Q. Mr. Stoddard?
18 A. Mr. Stoddard, yes.
19 Q. Did you speak with him before you -- before you
20 interviewed with him?
21 A. No.
22 Q. So you had an interview with Mr. Stoddard on October 29?
23 A. Correct.
24 Q. And that interview was what time?
25 A. I think it was early afternoon. I'm not sure on that,

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1 though.
2 Q. So how did that get arranged?
3 A. With -- with the recruiter from the company. We had
4 spoken a few times and done some phone screens, and then she
5 came back and said, I'd like to set you up with the COO for a
6 conversation. And then we arranged the date.
7 Q. Okay. Had you known Mr. Stoddard before?
8 A. No.
9 Q. And the first conversation then you had with Mr. Stoddard
10 was at that time sometime in the afternoon on September -- I'm
11 sorry, on October 29?
12 A. Correct.
13 Q. And did you come to work before you went to that
14 interview?
15 A. Yes.
16 Q. And when you -- you came to work, you printed out a
17 document at 9:51 called The Fact Book; is that right?
18 A. Yes.
19 Q. Okay. And then a you a minute later printed out your
20 resume?
21 A. Yes.
22 Q. And then you left at some point from Optum and went over
23 to go visit with Mr. Stoddard; is that right?
24 A. Correct.
25 Q. Okay. Now, can you tell us -- you met Mr. Stoddard at

117
1 Optum, you said?
2 A. Sorry?
3 Q. Sorry. You met Mr. Stoddard at -- where did you meet
4 Mr. Stoddard, I'm sorry?
5 A. At a Starbucks.
6 Q. At a Starbucks. And how long did you meet with him?
7 A. 45 minutes maybe.
8 Q. Okay. What do you remember talking with him about?
9 A. Well, we talked a little bit about the health care
10 venture. We talked a little bit about who was still working at
11 Optum. He had been there a long time ago. We spoke about my
12 experience at Bain and my job at Optum, kind of what my role
13 was. And then we talked a little bit about the three founding
14 companies and what kinds of issues their employees might have,
15 you know. I think we talked a little bit about our families.
16 And that was -- that was about it.
17 Q. Okay. So what did you tell him about your role at Optum?
18 A. That I was a -- worked across product and strategy, that
19 my time in -- you know, that I functioned largely as an
20 internal consultant for Optum. I worked with a lot of product
21 leaders and worked on kind of a lot of different strategy
22 projects but didn't really get into detail. We spoke fairly
23 briefly about my -- my experience.
24 Q. Okay. Did he ask you anything about the company and what
25 it was doing, about Optum and what it was doing?

118
1 A. No.
2 Q. Did you volunteer any of that?
3 A. No.
4 Q. Did you talk to him about any products that you were
5 working on?
6 A. No.
7 Q. Did he -- what did he tell you about the role that they
8 were looking to fill?
9 A. Not -- not a ton. We talked a little bit about how he was
10 looking for somebody with a consulting skill set who had spent
11 a little bit of time outside consulting. He said that he was
12 looking to bring on a few folks like me into the organization.
13 That -- that was about it.
14 Q. He didn't tell you more about what he was going to have
15 you do?
16 A. No.
17 Q. And you weren't -- did you ask?
18 A. I was very curious, but it didn't -- didn't feel like the
19 right moment to ask. We were having a kind of a broader
20 conversation and that was more of a "getting to know you."
21 Q. Okay. Did he talk about further -- future plans of ABC?
22 A. No.
23 Q. Okay. Did you ask?
24 A. No.
25 Q. Did he provide you any sort of job description about what

119
1 they were looking for at that point?
2 A. Aside from what I described, no.
3 Q. That's it?
4 A. (Nods.)
5 Q. When was the next time that you communicated with anyone
6 from Optum -- I'm sorry, from ABC?
7 A. I believe that I had a call with the same recruiter, who
8 was my contact through most of the -- the conversations either
9 that day or the next day. Excuse me. That -- you know, our
10 conversation was that we would -- she wanted to set me up with
11 a few other folks who worked for the company later that week.
12 I think we ended up on the 2nd of November, and then at that
13 point, I came into the company's offices and met with three
14 individuals as kind of a second-round interview.
15 Q. And who were those three individuals?
16 A. One was the chief technology officer, one was head of
17 communications, and one was an analyst.
18 Q. So at any point between your October 29 meeting and these
19 meetings that occurred on November 2, right?
20 A. Yes.
21 Q. Did they provide you any additional information about what
22 it is that you were -- that you were interviewing for?
23 A. No.
24 Q. Okay. Where did the November 2 meeting take place?
25 A. At the company's offices.

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1 Q. Which is where?
2 A. In Fenway.
3 Q. I'm sorry? In Fenway?
4 A. In the Fenway neighborhood.
5 Q. Okay. And who did you meet with first?
6 A. I think the CTO first.
7 Q. Okay. And what was the nature of those discussions?
8 A. It was actually very similar to the conversation with
9 Jack. Some conversation about the three founding companies and
10 my perspective on what kinds of -- what kinds of pain points
11 those employees might have.
12 Q. So what kind of pain points might those employees have?
13 A. So kind of continuity of care, kind of -- so think of it
14 as the --
15 THE COURT: Did you say pain points?
16 THE WITNESS: Sorry, so pain points in that the
17 employees of the company are -- many of them become sick at
18 some point and have to interact with the health system. And
19 it's often difficult to do so, and so one of the things that,
20 you know, is important to do for this -- this type of
21 organization for a benefit consultant type of company is to
22 understand where both the companies and the employees are
23 struggling to find the care that they need or interact with
24 organizations that can help them get to that care.
25 And so, you know, I think the topic of that -- so

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1 that's what I mean when I say pain points. An example might be
2 going to the doctor's office and having to fill out the same
3 form three or four times or, you know, not knowing, you know,
4 what medications are covered under your insurance or something
5 like that. And so those are some examples of -- of what we'll
6 call pain points or issues that a lot of employees are probably
7 having. And then again, we talked about career aspirations and
8 family and things like that.
9 Q. Did he tell you about -- any more about what ABC does at
10 this point?
11 A. No.
12 Q. Did he tell you what ABC was going to do at this point?
13 A. No.
14 Q. And did he tell you what --
15 THE COURT: You say "he."
16 MR. BECK: I'm sorry. This is the CTO. What's his
17 name?
18 A. Liam Brenner. Sorry. I'm a week into the job, so I don't
19 know names particularly well yet.
20 Q. Liam Brenner?
21 A. I believe so.
22 Q. Okay. And so Mr. Brenner didn't tell you what you were
23 going to do?
24 A. No.
25 Q. You didn't ask?

122
1 A. No.
2 Q. He didn't tell you what the company was going to do?
3 A. No.
4 Q. You didn't ask?
5 A. No.
6 Q. You met next with whom? On November 2 still, right?
7 A. I apologize, I may get the order wrong, but I think it was
8 the head of communications.
9 Q. Okay. And what's that person's name?
10 A. Brooke Thurston.
11 Q. And let me just back up for a second. How long did you
12 meet with Mr. Brenner?
13 A. I want to say it was half an hour, 45 minutes.
14 Q. And how long did you meet with Brooke Thurston?
15 A. All the interviews were about the same time.
16 Q. Half hour, 45 minutes each?
17 A. Yeah.
18 Q. And during your -- your interview with Ms. Thurston, what
19 did you discuss?
20 A. It was much more of a, I want to say, "getting to know
21 you" interview. It was more kind of personal, talked a little
22 bit about the career, learn a little bit about her history.
23 Q. So you didn't talk with her about your job, what your job
24 would be?
25 A. No.
123
1 Q. You didn't talk with her about what the company does?
2 A. No.
3 Q. Head of communications, you didn't talk to her about what
4 they were planning?
5 A. No.
6 Q. Okay. So you just got to know her for a half hour, 45
7 minutes, and that was the interview?
8 A. Yeah. I mean, we -- I mean, we talked about our careers,
9 and I talked a little bit about the arc of my career and why I
10 was interested in ABC and things like that. So I mean, it
11 wasn't -- it was, you know, we talked about those type of
12 things.
13 Q. Why you were interested -- why you were interested in a
14 company that you don't know what they do, right?
15 A. I wouldn't say it that way, but yes.
16 Q. Okay. And you are a -- then you met with an analyst, you
17 said?
18 A. Yes.
19 Q. And who was this?
20 A. Andrew Garrity.
21 Q. What did Mr. Garrity do as an analyst there?
22 A. I think it's more of a title. It's kind of a -- he does
23 project management. He does some research on different topics.
24 Q. Like what kind of topics?
25 A. I actually don't know exactly what he's working on right

124
1 now but -- and I didn't at the time.
2 Q. Did you ask him at the time?
3 A. No.
4 Q. You didn't ask him what he did?
5 A. I asked him kind of -- he talked broadly about, you know,
6 the project management, the research and the, like, types of
7 job functions but not actually what he was working on
8 specifically.
9 Q. So he told you what an analyst does, but he didn't tell
10 you what he does?
11 A. Well, he is an analyst so that's what he does.
12 Q. Right. But he didn't tell you what he specifically does
13 in that role for ABC?
14 A. Right, yeah. He didn't get into details about his actual
15 work.
16 Q. Did you tell him what you did at Optum?
17 A. Again, same thing, job function, types of things that I
18 had done. Again, I told a very similar story across all these
19 interviews about my career and why I was interested in this
20 company.
21 Q. Is he somebody that was going to be reporting to you?
22 A. I -- at the time I didn't know.
23 Q. Did you know what -- did you ask him what your job was
24 going to be?
25 A. No.
125
1 Q. Did you ask him about the company and what it does?
2 A. About ABC?
3 Q. Yes.
4 A. No.
5 Q. Did you ask him what ABC was going to do?
6 A. No.
7 Q. Okay. So each of these interviews lasted, you said, half
8 hour, 45 minutes, and then what happened after that?
9 A. I think I talked with Paige for a little bit, and then I
10 went back to work.
11 Q. You went back -- okay. And Paige, you mean?
12 A. Sorry, the recruiter, Ms. Devol.
13 Q. Ms. Devol. And then when was the next -- what did you
14 discuss with Ms. Devol?
15 A. Honestly, I don't -- I don't recall.
16 Q. What happened -- that was on November 2. What was the
17 next communication you had with ABC?
18 A. I would talk to Ms. Devol every week or every other week
19 or, you know, I think maybe a couple -- I don't remember
20 exactly how many times, but a few times over the next month,
21 just checking in to see how things were going. I didn't really
22 hear much, so I was curious if there was going to be another
23 interview or if they had kind of decided not to go, you know,
24 with me. And so I was kind of just curious to hear where
25 things were going.

126
1 Q. So you had a series of conversations with her, you said,
2 starting after that on November 2 and going how long?
3 A. I would say between November 2 and when I received the
4 call from her on December 6, maybe three phone calls.
5 Q. Okay. So what do you recall about the timing of those
6 three phone calls?
7 A. Not much. I mean, it was about every -- every week or
8 every other week or so.
9 Q. Okay. And did she give you any indication that she was
10 expecting that ABC was going to be making an offer at some
11 point?
12 A. No. The message was there might be a role for me. There
13 might not be a role for me. I think that helps explain a
14 little bit why nobody told me what I would be doing because, I
15 think, she said, Well, we'll kind of come back to you when we
16 have an idea of what we might want you -- what we might want
17 your role to be at this organization.
18 Q. So what we might want your role to be, meaning we'll tell
19 you what you would do if you came?
20 A. Right. So we don't know if there's a space for you. We
21 don't know if we're going to give you a job or not and we don't
22 know if there is a space for you, what -- what you would be
23 doing yet.
24 Q. Prior to December 6 what was the last communication you
25 had with her?

127
1 A. I don't -- I don't recall, but it would have been that
2 week or the week before.
3 Q. So either during the week of December 6, before December 6
4 or the week before. So at some point within about ten days,
5 give or take?
6 A. Yes.
7 Q. And during that conversation, she still indicated to you
8 that there may be a role, she's not sure, doesn't know what it
9 would be?
10 A. Yes.
11 Q. Okay. And on December 6 she calls you. That's obviously
12 the date that you attended the strategy meeting, right?
13 A. Correct.
14 Q. And on December 6 she says to you that you'll be receiving
15 an offer the next day?
16 A. So she said that, we're going to give you an offer. I
17 don't recall if she said it was going to come the next day or
18 not.
19 Q. Did she tell you what the offer was going to be?
20 A. Yes. She told me the salary and she told me that it would
21 be a director level, so I'm a -- I was a VP at -- a vice
22 president at Optum, and in this -- in kind of order director
23 tends to be below vice president in terms of role title. So
24 she wanted to make it clear that the role would be not at the
25 same title level that I was currently at.

128
1 Q. And they did ultimately make -- well, did she tell you
2 anything else about it?
3 A. No. That was a relatively brief -- well, so she also
4 mentioned that Caitlin Fleming was somebody else that they
5 were -- they were looking at.
6 Q. So she mentioned -- she mentioned to you that they're
7 looking at Caitlin?
8 A. Yes.
9 Q. Was that the first time that Caitlin's name came up?
10 A. With Paige, yes.
11 Q. Did you know Caitlin -- who did it come with up with
12 before?
13 A. Well, I mean, I knew Caitlin beforehand.
14 Q. First time that you found out that Caitlin was
15 interviewing with ABC?
16 A. Yes.
17 Q. Had you spoken with -- focusing first on you and your
18 job -- we'll come back to Caitlin -- what else did Ms. Devol
19 tell you about the role that you were going to be offered?
20 A. That was it. She said there would be a written offer
21 coming through that would have more details but she wanted to
22 let me know.
23 Q. Okay. Then you received that offer on December 7, the
24 next day?
25 A. Correct.
129
1 Q. And on receiving that offer, was the job title director?
2 A. Yes.
3 Q. And did that change at some point?
4 A. No.
5 Q. And the final title that you had was director?
6 A. Yes.
7 Q. Okay. And you were -- did you at that point have an
8 understanding about what it is that your job would be?
9 A. It was a little bit more clear in the sense that I
10 understood that there would be a few directors and that there
11 would be a team of people with kind of similar backgrounds to
12 mine, but again, the letter was not particularly clear on the
13 role itself, only on the kind of salient points that Ms. Devol
14 had raised earlier.
15 Q. So they were going to pay you $300,000 to come and be a
16 director and do something that you didn't know exactly what you
17 were going to do?
18 A. Yes.
19 Q. Mm-hmm. Okay. And you accepted this offer on December
20 11?
21 A. Correct.
22 Q. Prior to December 11, did you tell anybody at Optum that
23 you were thinking about accepting the offer?
24 A. No.
25 Q. Prior to December 11, had you spoken to anybody at Optum

130
1 and told them that you were interviewing for a job?
2 A. No.
3 Q. Prior to December 11, did you know whether anybody else at
4 Optum was interviewing for a job over at ABC?
5 A. Yes. I knew on December 6.
6 Q. December 6 you heard about Ms. Fleming?
7 A. Right.
8 Q. Prior to that time, had you known that Ms. Fleming was
9 interviewing at all?
10 A. No.
11 Q. Had you had any conversation with her about interviewing?
12 A. No.
13 Q. Had you had any conversation with her after December 6
14 prior to today about her interviewing at ABC?
15 A. We spoke once. I don't know if it was after she got her
16 offer or -- or before and I don't recall the date exactly but
17 we spoke once briefly by phone. She called me because I think
18 she heard that -- because I had announced that I was leaving.
19 It was sometime after December 13 when I told Steve Wolin and
20 Mike Weissel that I was going to leave. So she had heard that
21 I was going there and she called up and I -- at that point I
22 believe it was sometime after the 21st because I had already
23 gotten the letter from Mrs. Short and so I said I -- you know,
24 I have a non-solicit so we can't really talk about this and
25 then -- and then I said, you should -- you should get a lawyer
131
1 and I think that was basically the end of the conversation.
2 Q. You told her to get a lawyer on December -- what day?
3 A. I -- I don't recall what day it was, but it was sometime
4 after the letter.
5 Q. And you retained counsel at some point and you're
6 represented now by two different law firms, right?
7 A. Correct.
8 Q. And so when was the first time you spoke to a lawyer about
9 leaving Optum?
10 A. I -- I can --
11 Q. When was the first time you --
12 A. Yeah.
13 Q. -- reached out to a lawyer?
14 A. December 10, I believe. I enlisted -- I started working
15 with John Welsh.
16 Q. That's when you started working with him. When did you
17 first reach out to a lawyer?
18 A. I think it was that day.
19 Q. That day.
20 A. Whatever that Monday is.
21 Q. How did you find Mr. Welsh?
22 A. I spoke with a few lawyer friends who knew people who knew
23 people so his name came up.
24 Q. When did you start that process?
25 A. Sometime over that weekend when I was talking to my wife

132
1 about whether or not to take this role. I don't recall the
2 exact day. It was sometime after I had the offer before the
3 11th.
4 Q. Okay.
5 A. That's -- before the 10th.
6 Q. And you retained Mr. Welsh on December 10?
7 A. I believe that's when we -- that's when we had our first
8 call. I don't know if that's technically when we started or I
9 retained him.
10 Q. Okay. Did you sign an engagement agreement with him?
11 A. Yes.
12 Q. Okay. And when did you sign that agreement?
13 A. Honestly, I don't know.
14 Q. Are you paying for that representation by him?
15 MR. SHEEHAN: Object, Your Honor, to the relevance of
16 this on the question.
17 THE COURT: What's the relevance?
18 MR. BECK: Understanding the full -- the full contours
19 of what it is that ABG -- ABC is doing here in terms of paying.
20 THE COURT: So basically you want to know if ABC is
21 paying Mr. Smith's legal fees?
22 MR. BECK: That is correct, Your Honor.
23 THE COURT: I don't think that's privileged. The
24 objection is overruled -- I mean, if there's an objection,
25 don't answer the question until I rule on the objection.

133
2 THE COURT: If I sustain the objection, that means you
3 should not answer. If I overrule the objection, that means you
4 should answer.
6 THE COURT: So I'll let Mr. Beck put the question
7 again and then you should answer it.
8 THE WITNESS: Thank you.
10 BY MR. BECK:
11 Q. Are you paying for that representation?
12 A. No.
13 Q. Who is paying for it?
14 A. The company is.
15 Q. Okay. And you've also retained Mr. Sheehan's firm?
16 A. I'm -- I don't know the technical definition of retained
17 so I'm not sure.
18 Q. You've -- you've asked them to be your counsel?
19 A. They are -- they -- these two law firms are my -- are my
20 counsel.
21 Q. Okay. And are you paying that -- Mr. Sheehan's firm?
22 A. No.
23 Q. Who is paying Mr. Sheehan's firm?
24 A. The company.
25 Q. Okay.
134
1 A. Sorry. I believe.
2 Q. Why do you say you believe?
3 A. I think that's the case. I -- I don't know for sure. I'm
4 just trying to be --
5 Q. But you know it's -- you're not paying for the --
6 A. I'm not paying.
7 Q. -- representation that you're receiving here from
8 McDermott, Will and Emery or for Welsh?
9 A. Correct.
10 Q. Okay. Mr. Smith, I think you stated in your affidavit you
11 prefer to print out documents. That's -- that's how you --
12 that's how you review them, that's how you work with them,
13 that's your preference?
14 A. Yes.
15 Q. And you routinely print out documents that you rely on?
16 A. Yes.
17 Q. And you routinely -- and if I understand correctly, you
18 routinely relied on a document called the OES Socialization
19 Desk for OET; is that right?
20 A. Well, that came out relatively --
21 Q. You routinely -- you testified "I relied heavily on this
22 document when preparing for December 6."
23 A. Yes.
24 Q. Is that right?
25 A. Yes.
135
1 Q. And that was a document that, as you said, you relied
2 heavily on.
3 A. Yes.
4 Q. You say that you printed it again on December 10.
5 A. Yes.
6 Q. Is that right? You had never printed it before that, had
7 you?
8 A. I believe I had, but --
9 Q. So if the logs of your -- if your print logs show that you
10 never printed it before --
11 A. Then I wouldn't have printed it before, yeah.
12 Q. So although you routinely print documents and although you
13 heavily relied on that document, sitting here today, the only
14 time that you know that you printed that document was on
15 December 10, the day before you tendered your resignation,
16 correct?
17 A. Yes.
18 MR. BECK: Your Honor, may I have a moment?
19 THE COURT: Yes.
20 BY MR. BECK:
21 Q. Mr. Smith, you are currently working for ABC; is that
22 correct?
23 A. Yes.
24 Q. What do you do there?
25 A. So I -- I'm director of -- in the strategy research group.

136
1 I am doing kind of -- thinking about and looking at the three
2 founding companies.
3 MR. SHEEHAN: Your Honor, at this point I'd ask, may
4 we approach the bench?
5 THE COURT: Yes.
6 SIDEBAR:
7 MR. SHEEHAN: At this time I'd ask that the courtroom
8 be cleared of anyone who wouldn't come under an attorneys' eyes
9 only protective order that we would have because the testimony
10 that's being elicited is going to talk about things that are
11 confidential strategy to the company.
12 THE COURT: Well, I mean, what -- what he does at the
13 heart of this in the proceedings are presumptively public.
14 Here, what's the line of questions you expect to ask? Because
15 I'm going to ask the questions if nobody else does. What did
16 you do for Optum, what do you do for ABC, not everything is a
17 trade secret. In fact, part of your argument is that --
18 MR. SHEEHAN: I understand.
19 THE COURT: But no. I mean, it's a -- look, it's a
20 serious concern and there are competing interests. One is the
21 presumption that judicial proceedings are public and closing
22 the courtroom is -- different higher standard for closing the
23 courtroom than there is for filing documents or, well, for
24 filing documents under seal. Although maybe not. But what's
25 the line of questioning -- questions?

137
1 MR. BECK: I'm going to ask him everything he's doing
2 at ABC. We still haven't heard. He showed up at ABC. I'd
3 like to know what's changed.
4 MR. SHEEHAN: I think, you know, he'll answer those
5 questions, but he's bound to the new employer just as he's been
6 bound -- he was bound at Optum to maintain the confidentiality
7 of that and it's a fine line to try to ask him to draw as the
8 words come out of his mouth.
9 THE COURT: You're in a judicial proceeding. Court
10 order trumps a contract. I mean, there are some people in the
11 courtroom.
12 MR. SHEEHAN: That's the press.
13 THE COURT: I want you to start with your questions
14 and I want you to listen to the questions, Mr. Sheehan, and
15 tell me any particular questions you think are going to
16 implicate these concerns, and then I'll decide what to do.
17 MR. SHEEHAN: I just ask, when the court is making his
18 consideration, this is the very first time Mr. Smith has ever
19 testified so he's not in a position to be parsing.
20 THE COURT: No. Let's go question by question. I
21 think to the maximum extent possible I want these proceedings
22 to be public and maybe that we do things in a certain level in
23 generality and then excuse the public and have some fine-tuning
24 examination and cross-examination. But I'd have to hear more.
25 MR. SHEEHAN: Sure.

138
1 (End of sidebar.)
2 THE COURT: Actually, let me explain the following
3 part to the witness -- primarily to the witness. Your attorney
4 is concerned that you may now be asked questions that call for
5 you to provide information that's confidential to ABC and
6 whether those responses should be made in open court or whether
7 the public, including the media, should be excused is an issue.
8 To the maximum extent possible and possibly complete -- and
9 quite possibly completely, judicial proceedings are public. So
10 they can be closed at certain circumstances after I do some
11 balancing, once I'm persuaded that the balancing is necessary.
12 So I've said they have to be -- we're going to start at least
13 question by question.
15 THE COURT: So you should just pause briefly before
16 you answer. If there's an objection, don't say anything. And
17 I'll deal with the objection. Is that clear?
19 THE COURT: Mr. Beck, go ahead.
21 THE COURT: Having had this discussion, try to keep
22 the earliest questions general and then as you start honing in,
23 I think, the concerns Mr. Sheehan raised will be implicated,
24 possibly.
25 MR. BECK: Okay.

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1 Q. You started working for ABC on what day?
2 A. January 17.
3 Q. Okay. And as of January 17, had you been informed at that
4 point as to definitively what will your role was going to be?
5 A. Do you mean before I showed up?
6 Q. Yes.
7 A. No.
8 Q. And what about when you showed up -- so you showed up.
9 You really had no idea beyond what was just in the offer
10 letter?
11 A. Yes. You sound like my wife.
12 Q. You knew you were going to take a job without a job
13 description, without any information about it other than you
14 were going to earn $300,000?
15 A. Yes.
16 Q. Okay. And you show up.
17 A. Sorry. Including all of the pieces we talked about
18 earlier in the offer letter.
19 Q. So you showed up for work and did they tell you at that
20 point what your job was going to be, what they were paying you
21 this money for?
22 A. Yes.
23 Q. What did they tell you -- who told you?
24 A. So I'm going to try to remember the sequence of events.
25 So I came in. There were a few other -- as I mentioned, a few

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1 other directors like me. I met them. We talked about their
2 roles and, you know, what I came to understand was that we
3 functioned as a -- you know, I think, as a largely benefits
4 consulting group for the three founders, looking at
5 particularly the wide variety of employees that are employed by
6 the three founders and understanding where they're struggling
7 to get the care they need at the right cost, and with the right
8 experience for them. And so my role was to be essentially --
9 we've kind of said this a few times but to play the role of the
10 benefits consultant for those three companies.
11 Q. So looking at -- so you were going to look at the
12 population that is covered by the three different companies and
13 how their health care is managed currently?
14 A. The experiences that they have with the health care, yes.
15 Q. And some of that health care system is being managed by
16 Optum; isn't that right?
17 A. Correct.
18 Q. Mm-hmm. And so your duties will be then to evaluate the
19 care that they've been given in what respects?
20 A. So in the health care industry, there's this concept
21 called the triple aim, which is quality of care, cost, and
22 experience for patients, for employees. And so it's really
23 those three metrics that drive the way in which we evaluate
24 whether the vendors that are providing services to these
25 employees are -- are delivering on that.

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1 Q. Okay. So what is it, quality, care and what?
2 A. Quality or outcomes, cost, and the experience of the
3 patient. So how does it feel to interact with the health
4 system. What does it -- you know, this kind of comes back to
5 that form conversation we were having earlier.
6 Q. And so your -- and your job is going to be to look at the
7 patient population as -- as it pertains to or as it informs the
8 issues of existing quality or outcomes now, the costs that the
9 company -- the three companies, Amazon, Berkshire and JP Morgan
10 Chase, have experienced and the -- and their experience, the
11 health care experience of their members; is that right?
12 A. Yes. Looking at the different vendors that provide them
13 services and understanding --
14 Q. Including Optum?
15 A. I am not looking at Optum.
16 Q. But the company is looking at Optum, right?
17 A. I don't know, actually.
18 Q. Well, Optum is one of the vendors?
19 A. Yes. So in theory at some point, yes.
20 Q. Somebody has to look at Optum?
21 A. Yes.
22 Q. And then somebody's got to compare Optum with the various
23 other alternatives, right? Somebody has to do that?
24 A. For the services for which Optum provides to those.
25 THE COURT: Excuse me. May I ask a question? If the

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1 lawyers have an objection, don't hesitate -- don't hesitate.
2 Why are you not looking at Optum?
3 THE WITNESS: So out of an abundance of caution there
4 and because of all of the events that have transpired over the
5 last month, it feels imprudent to get involved. We also, I
6 think, have spoken as a team internally and decided that it
7 really doesn't make sense for me to be involved in any way with
8 anything related to Optum and so I'm keeping my distance.
9 THE COURT: Can you do your job at ABC without
10 considering or discussing Optum?
11 THE WITNESS: Yes. So the job is -- think of it in
12 kind of two worlds. There's the world of analysis of what
13 the -- what the problems are for this specific set of
14 employees, and then there's the world of the solutions, the
15 things that can be done for those -- to solve those problems.
16 And so if you're working on the analysis side, you're not
17 concerned with specifically how is Optum positioned against
18 whatever competitors they may have in the market. You're
19 looking at the problem itself, how big it is, how it's related
20 to other problems, how solving it might create new problems.
21 And so I'm, you know, I think, perfectly able to focus on one
22 versus the other. You know, the vendor selection process can
23 be separated from that.
24 THE COURT: Are you involved in vendor selection at
25 all?
143
1 THE WITNESS: No. Let me clarify. Not as of today,
2 right, and I don't foresee that happening in the next couple of
3 months.
4 THE COURT: Do you expect that you'll be involved with
5 vendor selection after the next couple of months?
6 THE WITNESS: It is possible but I think we, you know,
7 as it pertains to Optum, if that becomes a limiting factor in
8 vendor selection, then I would not be involved in vendor
9 selection.
10 THE COURT: Were you involved in vendor selection when
11 you worked for Optum?
12 THE WITNESS: No. Optum is a vendor, and so they
13 provide services to companies like ABC. Now, Optum uses other
14 kinds of services, you know, legal services, other kinds of
15 things where there might be vendor selection, but I wasn't
16 really involved in that at all.
17 THE COURT: Were you involved at Optum in analyzing
18 issues or problems comparable to the issues and problems you're
19 now working on for ABC?
20 THE WITNESS: So this, I think, is a really good
21 question. So it's -- the large reason why I think --
22 MR. SHEEHAN: No objection to the question, Your
23 Honor.
24 THE WITNESS: Yeah, this is the large reason why I was
25 so excited by this new company is that it's a -- it is a

144
1 different set of issues, a different set of questions. You
2 know, I am now working with -- directly with an employee
3 population. I'm essentially part of these employers. And the
4 problems that are arising are specific to this population, very
5 granular in nature. It's a difficult set of populations to
6 work with. Whereas Optum, the problems I was working on
7 were -- you know, Optum has existing products that sell into
8 the market for a profit and the -- the problems I was working
9 on was how to grow those businesses by selling to companies
10 like ABC. And I think that distinction for me was a big piece
11 of why I was willing to take a job that I had no real job
12 description on and take a risk at this point in my career, you
13 know, and a step-down in pay and a step-down in title to tackle
14 something that is in my mind a fundamentally different
15 question.
16 BY MR. BECK:
17 Q. What other kind of job duties do you have there?
18 A. That's -- that's the job. It's a big job.
19 Q. $300,000 to look at their patient pool and analyze that
20 and then maybe at some point look at vendors?
21 A. Yeah.
22 Q. Are you working with anybody else there, or are you doing
23 this on your own?
24 A. There's a team of us.
25 Q. How many of you?

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1 A. So there's five.
2 Q. Okay. How do you divvy up who is going to do what part of
3 it?
4 A. Well, one significant thing is obviously Optum, so I don't
5 get involved with anything around Optum. I'm kind of one of
6 the limiting factors. I don't touch anything to do with
7 pharmacy because I think there's not a lot of competitors in
8 the pharmacy space and so getting involved there would take me
9 relatively close to Optum even if I was just, you know, looking
10 at it broadly, so I try to stay away from that, and then the
11 rest is, you know, we kind of juggle. We actually change what
12 we're doing from time to time so it's not -- not consistent,
13 and I should caveat that I've only been there for a week and
14 change, so.
15 Q. And you've already changed the things that you're doing
16 there?
17 A. Yeah. I mean, I've looked at different -- different
18 aspects, different employer subpopulations. I've looked at
19 different elements of this overall problem, but again within
20 those guidelines that I mentioned earlier.
21 Q. What --
22 THE COURT: Excuse me for interrupting. When you say
23 you don't "touch pharmacy, that would be close to Optum," can
24 you explain that to me, please?
25 THE WITNESS: Sure. So I think we talked a little

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1 earlier about one of the businesses of Optum is Optum Rx. It's
2 a pharmacy benefit manager. Think of it as a group purchaser
3 of pharmaceutical drugs for employers but also for state
4 governments, for lots of different customers in the market.
5 It's a fairly concentrated industry. There's kind of three big
6 players: Optum, Express Scripts and Caremark, which is part of
7 CVS. And so, you know, I think because of what's happened over
8 the last month, and because I think we as an organization are
9 trying to be, you know, clear about where my role is and where
10 my role is not, I'm not involved in work surrounding pharmacy
11 benefit management because it would be -- Optum is kind of such
12 a big presence in that particular space.
13 THE COURT: Did you work on pharmacy benefits
14 management at Optum?
16 THE COURT: Okay. Go ahead.
17 BY MR. BECK:
18 Q. So is anybody at ABC working on developing their own suite
19 of services down the road?
20 A. Can you --
21 Q. Products or services, pharmacy benefit management, for
22 example?
23 A. No. I mean, I think we're looking at it -- the next --
24 you know, a lot of the work is about understanding for the
25 employees where those pain points are and the potential

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1 solutions that exist today, so the vendors that are out there.
2 I don't think any discussion has happened around us selling
3 things into the market. I think that's been a public statement
4 that's been made as well.
5 Q. I'll assume that you're not doing anything into the market
6 right now, but you have Amazon -- you have Amazon, Berkshire
7 Hathaway, and JP Morgan Chase spending $300,000 on you and five
8 other -- four other people on your team and various others,
9 spending a lot of money to look into this issue at a minimum
10 for the employees; is that right?
11 MR. SHEEHAN: Objection, Your Honor. Is there -- it's
12 not time for argument. Is it -- it's just an argumentative
13 statement and not a question.
14 THE COURT: Overruled.
15 A. Sorry, can you say the question again.
16 BY MR. BECK:
17 Q. So you've got Amazon, Berkshire Hathaway and JP Morgan
18 Chase paying you $300,000, paying your peers presumably some
19 similar amount of money to just do some research on their -- on
20 their people with no plan about -- no effort to try to improve
21 that and then maybe carry that out publicly?
22 A. I think it is helpful to think about the scale of this
23 problem. So these are three pretty big companies, as I've
24 pointed out.
25 Q. You can -- about 1.2 million people, right?

148
1 A. Right. So think about the scale of health care costs that
2 they incur. It's really significant. Average cost, you know,
3 per person in the U.S. is $10,000, so these zeros start to add
4 up very quickly. So I know $300,000 is a lot of money. I'm
5 very aware of that, and even though that was a step-down from
6 where I was, it's a significant amount. But relative to the
7 scale of the problem that these companies are facing, it is a
8 drop in the bucket.
9 They have enormous health care costs that are growing
10 every year, and so for them, the tradeoff of understanding at a
11 greater degree of detail from a group benefit consultant what
12 these costs are, how they can work with vendors who are out
13 there with solutions to really pull this together in a way that
14 impacts those costs, the employees that they have, 1.2 million
15 people, think about how often people are missing work, people
16 are unhappy with their health care experiences, these kinds of
17 things, you start to get to a sense that really the -- a
18 significant part of all of these businesses is their health
19 care business.
20 THE COURT: Excuse me. Is it one of the goals of ABC,
21 as you understand it, to essentially use A, B and C as a
22 laboratory to develop new and better ways to deliver quality
23 health care more affordably?
24 THE WITNESS: I mean, I don't mean to be evasive, but
25 yes, that could be. Or, you know, it could be that, you know,
149
1 the great solution is already out there, and it's about kind of
2 pulling all the right ones together. And it might be about,
3 you know, thinking about how to work with your employees when
4 you hire people, when people move on to other jobs, how do you
5 connect. There could be a lot of solutions out there.
6 THE COURT: Putting aside whether A, B and C would use
7 existing products and services or develop its own, did you
8 understand that ABC was aiming to do something innovative in
9 this health care space and found that attractive?
11 THE COURT: And did you expect that if AB is -- ABC
12 developed something that could deliver high quality health care
13 at a good price to its employees they wanted to make that model
14 available to others?
15 THE WITNESS: I think so. This is -- I think this is
16 an important point. We talked about when I first reached out
17 to ABC and it was after the CEO was announced, and I think that
18 for me was the piece that helped me see this organization as
19 something that was not necessarily, not directly looking to
20 monetize this kind of solution and the CEO has a reputation
21 well established in the media --
22 THE COURT: Who is the CEO?
23 THE WITNESS: -- Dr. Gawande -- for trying to solve
24 system problems, not trying to build businesses; and I think,
25 you know, when we come back to this idea of fundamentally

150
1 different types of problems, fundamentally different companies,
2 not in competition, that to me was an indication that this
3 organization was focused on solving a problem for these
4 employees directly, and your question is a good one, right? If
5 you come up with a great solution, why wouldn't you make it
6 available? But that's -- that's not -- that's not the point
7 and that's certainly not the goal in the next 12, 24 -- you
8 know, it's not the near term goal, and I think that's something
9 that's been stated in the press fairly publicly, that this is a
10 long-term view on helping these three companies with a
11 significant problem.
12 THE COURT: Okay.
13 BY MR. BECK:
14 Q. What I heard just now was that at some point then you do
15 expect that if through the course of your work and the work of
16 your peers that if ABC does come up with a fantastic product,
17 that is something that you would expect in the future, that
18 that would be rolled out and commercialized; is that right?
19 A. No, I wouldn't expect that.
20 Q. You wouldn't expect that?
21 A. I wouldn't -- I don't expect it or I don't -- sorry, the
22 word "expect" is a little -- I don't -- it's not on my radar.
23 It's not something I expect or not expect. It's not a focus,
24 and so I don't -- I don't know what will happen in five years
25 so I'm not going to --

151
1 Q. Well, I think you said in 12 months, 24 months, 36 months,
2 you don't know what's going to happen. You know that you are
3 looking at finding products that work for Amazon, Berkshire and
4 JP Morgan, right?
5 A. Today, yes.
6 Q. Today. And some of those are already, today, being
7 provided by Optum, right?
8 A. Yes.
9 Q. Okay. And so if you found better products or services,
10 presumably those are going to replace Optum?
11 A. Yes, but I wouldn't be involved in that.
12 Q. Right. Okay. Are you physically or electronically
13 blocked off from what anybody else is doing in their research
14 and anything having to do with Optum?
15 A. No, I don't think so.
16 Q. Okay. Where did the other four directors that you
17 mentioned come from? Where did they work before?
18 A. Very similar backgrounds to me. They all had -- I think
19 all had done some degree of consulting and then some degree of
20 something else in the health care space.
21 Q. Do you know what any of them do, where any of them came
22 from?
23 A. Yeah. I can -- I can talk to them. So you know,
24 consulting firms like BCG and Deloitte --
25 Q. Health care firms, not to interrupt, but what about health

152
1 care firms?
2 A. Well, I mean there's Caitlin, obviously. And then one
3 came, I think, from an insurer and, I apologize, I'm not being
4 evasive. I'm just trying to recall. And another, I think he
5 was working in government before this.
6 Q. And Optum helps large companies manage their employees'
7 health needs, right?
8 A. Optum -- sorry, say that again.
9 Q. Mm-hmm. Doesn't Optum help large companies to manage
10 those companies' health needs, their employees' health needs?
11 A. Yes.
12 Q. That's one of the things Optum does, right?
13 A. Through specific products, yes.
14 Q. Mm-hmm. And before you came over to ABJ, did you talk
15 with ABJ about your noncompete agreement?
16 A. Yes.
17 Q. And when did you have that conversation?
18 A. Some -- I don't -- I don't recall.
19 Q. Let me ask you. Was it before or after you signed the
20 offer on December 11?
21 A. I believe it was before, but I'm not -- it was sometime
22 right around -- I think it was before, but I'm not sure.
23 Q. Okay. Was it before or after you received the offer in
24 the first place on December 7?
25 A. I think it was definitely after that, but I want to say it

153
1 was -- I'm not sure. It was sometime around there.
2 Q. Okay. And without knowing -- you disclosed the noncompete
3 to ABJ. You didn't know what job you were going to be doing.
4 You went over to ABJ without -- without any more information
5 than that; is that right?
6 A. Correct -- well, aside from all of the press.
7 Q. What we've talked about.
8 A. All the information.
9 Q. All of the press, I'm sorry?
10 A. All the press about ABC. There's been a lot of articles
11 written about the people, the time --
12 Q. About what ABC was going to do?
13 A. Right. Those kinds of things, yeah.
14 Q. And have you -- have you had conversations with ABC about
15 what would happen if you were enjoined today?
16 A. I don't know what that word means.
17 Q. Well, have you had conversations with ABJ about whether
18 they would continue to pay your salary if you were enjoined
19 from working there?
20 A. No.
21 Q. You've not had a conversation?
22 A. No.
23 Q. You haven't had any discussions about it?
24 A. No.
25 Q. Do you have any understanding about whether they would

154
1 continue to pay your salary?
2 A. I mean, I would like them to continue to pay my salary,
3 but we haven't had a conversation where it's been --
4 Q. Do you have some indication as to whether they're going to
5 continue to pay your salary besides the fact that they're
6 paying your lawyers?
7 A. No.
8 Q. Does --
9 MR. BECK: May I have another moment, Your Honor?
10 THE COURT: Yes.
12 Nothing further.
13 THE COURT: Cross-examination.
14 MR. SHEEHAN: I have a few follow-up questions, but,
15 Your Honor, may we take a brief break for the same reason we
16 took a break this morning?
17 THE COURT: Yes.
18 MR. SHEEHAN: And I can inform the court I believe we
19 are now on file with our --
20 THE COURT: I know. Christine, print out the motion.
21 All right. It's 4:20. We'll resume at 4:30. I want to
22 complete the questioning of this witness, at least, which may
23 include some questions from me. Court is in recess.
24 (Recess taken 4:18 p.m. - 4:29 p.m.)
25 MR. BECK: Your Honor, may I ask one housekeeping

155
1 matter before --
2 THE COURT: What is that?
3 MR. BECK: Well, we have other witness, and I don't
4 know what your timing was and what you were thinking about
5 today versus tomorrow. We've got three more people sitting
6 out.
7 THE COURT: Yeah, they should stay there. I'm going
8 to ask you when we finish this witness whether you want to call
9 Mr. Wolin -- whether you want to call any of the additional
10 witnesses. Do you expect you will?
11 MR. BECK: Yes, we do.
12 THE COURT: I'm sorry, who do you -- who do you expect
13 you'll want to call?
14 MR. RIDEN: I expect to be calling both Mr. Wolin and
15 Mr. Weissel for nonoverlapping, very targeted testimony.
16 THE COURT: All right. All right. Mr. Sheehan, you
17 may proceed.
19 CROSS-EXAMINATION BY MR. SHEEHAN:
20 Q. Mr. Smith, I may jump around a little bit. I'm going to
21 try not to cover the same ground that has just been covered. I
22 think Your Honor will appreciate that and everyone else will.
23 I'd like to put up -- on your very first day of work, at
24 the joint venture at ABC, you were asked, who did you talk to,
25 what did you do. I'm going to put before you an exhibit.
156
1 MR. SHEEHAN: Your Honor, this is ECF -- this has been
2 filed. Document 23-1 was filed on January 22, 2019. I've got
3 copies, and I'd like to put it up for the witness and put it in
4 the record.
5 THE COURT: That's his affidavit.
6 MR. SHEEHAN: This is an acknowledgment signed by
7 Mr. Smith on his first day of work with the company.
8 THE COURT: Actually, that's not 23-1. 23-1 is his
9 affidavit.
10 Doesn't matter. You can --
11 MR. SHEEHAN: It doesn't matter. I believe it's an
12 attachment to the affidavit.
13 THE COURT: Do you have two copies for us?
14 MR. SHEEHAN: I've got plenty of copies.
15 THE COURT: We'll make this be Exhibit 3.
16 BY MR. SHEEHAN:
17 Q. Mr. Smith, do you see Exhibit 3?
18 A. Yes.
19 Q. And is that your signature?
20 A. Yes.
21 Q. And is January 17 your first day at the company?
22 A. Yes.
23 Q. And just explain -- was this presented to you in the
24 morning, in the afternoon, what was the context?
25 A. It was, I think, part of the first set of materials I

157
1 received when I walked in the door.
2 Q. You read it?
3 A. Yes.
4 Q. You signed it?
5 A. I did.
6 Q. And it's true?
7 A. Yes.
8 Q. Thank you. You've talked quite a bit about -- you've
9 testified quite a bit about your job at Optum and your job at
10 ABC over the past few days. Just take a step back, if you
11 could, and briefly explain to the court and counsel what has
12 been your career path, what has been your experience, taking us
13 all the way back in the health care industry, 2004?
14 A. Sure. I started my career working with a family office,
15 essentially a family that was interested in investing their own
16 money in the health care space. And we did it through a number
17 of different venues, including venture capital. So early stage
18 biotech, medical technology companies, devices, things like
19 that. That was about five years. I decided after that that I
20 needed to gain a deeper level of expertise more broadly than
21 just biotech and med tech. So I went back to business school
22 and got a joint degree in health administration and policy with
23 the idea of continuing to deepen that expertise in health care.
24 I -- between the two years of business school, I interned,
25 and then at the end of business school, accepted a full-time

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1 job with Bain & Company, which is a consulting firm, at which I
2 spent 75 percent of my time doing health care and close to 100
3 percent by the end of my tenure. You tend to specialize a
4 little bit more as you progress through these consulting firms.
5 THE COURT: What year did you start there?
6 THE WITNESS: I started -- I interned the summer of
7 2010, and then started full-time in 2011.
8 In 2016, my wife and I had our first daughter.
9 Consulting is a lot of time on the road, and so I decided to
10 make a change in my career. I also wanted to focus more on a
11 certain part of health care. So I really like the payer, the
12 insurer and provider side of health care and so Optum was a
13 natural fit for that. So I joined them in 2016 in the
14 corporate strategy group.
15 THE COURT: Let me just stop you right there, just
16 brief interruption. When you started at Optum, did you sign
17 anything, did they have you sign anything like this Exhibit 3?
18 THE WITNESS: I don't remember one, no.
19 THE COURT: Did they admonish you in any way or take
20 any measures, protocols to make sure that the confidential
21 information you had worked on with your health care clients was
22 not used or disclosed --
23 MR. BECK: Objection, Your Honor.
24 THE COURT: -- in your job at Optum?
25 MR. BECK: Objection, Your Honor.

159
1 THE COURT: What's the objection?
2 MR. BECK: The relevance of what happened at the time
3 that he signed at Optum, given the circumstances.
4 THE COURT: Well, whether something constitutes a
5 trade secret is influenced by the measures taken to protect the
6 purported confidentiality.
7 MR. BECK: But he's asking about some prior employer's
8 information.
9 THE COURT: No, I think he asked at Optum, I was going
10 to say.
11 MR. BECK: Yeah, whether Optum had him sign an
12 acknowledgment like this about prior employment information.
13 MR. SHEEHAN: This goes to, Your Honor, the
14 time-tested "goose and gander" rule.
15 THE COURT: I'm not familiar with the "goose and
16 gander" rule.
17 MR. SHEEHAN: And again, I just described what I
18 thought was the relevance of it.
19 THE COURT: No. I don't know -- I don't know if you
20 would benefit from the "goose and gander" rule if it means
21 what's good for the goose is good for the gander. The
22 objection is overruled. He can answer the question.
23 A. Sorry, can you ask it again?
24 BY MR. SHEEHAN:
25 Q. Sure. When you were -- when you on-boarded at Optum in

160
1 2016, did anyone sit down with you and establish any sort of
2 practice or protocol or admonish you as to how to deal with the
3 various confidential information you would have got -- you may
4 have gotten in working with Bain for your health care
5 clients --
6 A. No.
7 Q. -- as you came on to Optum?
8 A. No.
9 Q. No?
10 A. No, there was no conversation like that. Obviously as a
11 consultant, everything I would do would be under
12 confidentiality agreements, and that's kind of how the
13 consulting industry works is through that. But nobody sat me
14 down and had that conversation.
15 Q. Were you able to in your job in the years you worked with
16 Optum not draw upon or not use or disclose prior clients'
17 confidential information?
18 A. Yes, I was able to not do that.
19 Q. Let me ask you that very same question in your job today
20 at your new employer, at the new employer, ABC. Are you able
21 to do your job without using or disclosing or relying upon any
22 of the confidential information you had -- you were privy to at
23 Optum?
24 A. Yes, I walked in with nothing and was able to pick up and
25 start working without exposing any of Optum's trade secrets or

161
1 anything like that. Again, the work is -- and now I'm working
2 for the company. I can -- I have experienced the work. It is
3 fundamentally different. There is no -- I would have had no
4 interest and certainly wouldn't have taken anything, but there
5 is no reason why I would take it either. And there's no reason
6 to use any of that information, given the difference in the
7 problem, and it just -- it never occurred to me to even think
8 about to doing that but it hasn't been an issue and I don't
9 foresee it becoming an issue.
10 Q. Sir, you had a few direct, face-to-face meetings, one with
11 the COO, Mr. Stoddard, and other, a series of interviews after
12 that with employees of the joint venture.
13 A. Mm-hmm.
14 Q. Did you at any time have any Optum documents with you when
15 you met with them?
16 A. No.
17 Q. Did you ever give any of them any Optum documents?
18 A. No. When I -- you know, when we started going through
19 this, as you know, I've turned in my computer and all of my
20 electronics, and there's -- I don't -- I have nothing. I
21 didn't bring anything. I wouldn't bring anything.
22 Q. I'm just talking about while you were still working at
23 Optum.
24 A. Yeah.
25 Q. Because there's been some allegations in the complaint and

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1 some argument that -- about while you were still at Optum.
2 A. Mm-hmm.
3 Q. And I just want to be clear and I want you to be clear
4 with the court. When you met with Mr. Stoddard, did you have
5 Optum documents to --
6 A. Got it. No. We touched on Optum only to talk about
7 people we knew in common.
8 THE COURT: I think Mr. Sheehan's question was, did
9 you have any Optum documents with you when you met with
10 Mr. Stoddard? Did you --
11 THE WITNESS: No. The only thing I had with me was my
12 resume.
14 Q. And on that day, October 29, when you met with
15 Mr. Stoddard, I think you said in a coffee shop?
16 A. Yes.
17 Q. That was the day that you also printed out a document that
18 is referred to as the Fact Book?
19 A. Yes.
20 Q. Okay. Can you explain -- first of all, did you have the
21 Fact Book with you when you met with Mr. Stoddard?
22 A. No.
23 Q. Did you take it out of Optum's offices?
24 A. No.
25 Q. Can you explain why you accessed and printed that document
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1 that day?
2 A. Yes. So I think I made clear in my affidavit that I
3 frequently printed out documents, and I think that Fact Book, I
4 likely printed out multiple times. I would print out whatever
5 piece of work I was working on at the time, work on it with
6 Mr. Wolin or Mr. Weissel or work with it with the different
7 business partners that I might have, and having that document
8 physically there to walk through with the business partner I
9 was working with is incredibly helpful to be able to look at
10 the same page, not have a computer in the way. And for me,
11 reading physical documents is -- I'm able to focus. The screen
12 is not a problem. It's a little bit easier.
13 THE COURT: Why did you print it out on October 29?
14 THE WITNESS: So that Fact Book, I won't go into the
15 details of the content, but essentially it was a perspective on
16 I think, as has been mentioned, what Optum foresees as the way
17 in which they are going to start to -- you know, they're going
18 to continue to grow their business. And a lot of the internal
19 consulting that I would do is with business leaders thinking
20 about how they want to grow their business. And so -- but they
21 live in a particular business, right? They would work in
22 business A or business B or business C, and this was a
23 perspective across Optum; and so conversations with business A
24 here would be around how should we start to think about how we
25 interact with the other businesses, business A, business B,

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1 business C. How do we come to market together, how do we think
2 about different decisions that we need to make, and core to
3 that is an understanding of what corporate strategy is
4 perceiving Optum overall to look like. So I printed that
5 document out. I would bring it to a meetings.
6 THE COURT: Well, testify based on your memory. You
7 printed it out at 9:51 a.m., the parties seem to agree.
9 THE COURT: And then -- did you read it then?
10 THE WITNESS: Honestly, I don't remember. I think I
11 printed it out before then as well. So I would have been
12 reading it or using it for meetings or a number of different
13 reasons and other documents as well that I printed out on a
14 regular basis.
15 THE COURT: Well, I want to know about October 29.
16 There doesn't seem to be a dispute --
17 THE WITNESS: Yeah. No, I --
18 THE COURT: -- that at 9:51 a.m. --
20 THE COURT: -- you printed out the confidential Fact
21 Book, correct?
22 THE WITNESS: Correct.
23 THE COURT: And right after that, I think they say a
24 minute later, you printed out your resume.

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1 THE COURT: And then in the afternoon, you went to see
2 Mr. Stoddard, correct?
3 THE WITNESS: Yes.
4 THE COURT: Did you read the Fact Book on October 29
5 or look at it, the content of it, on October 29 before you went
6 to see Mr. Stoddard?
7 THE WITNESS: I -- honestly, I may have. I probably
8 did. I probably used it in a meeting that day. This is a
9 small point, but the way the printer works is you send files
10 and then when you go to the printer, you badge in and print
11 out, so files are always right after each other. That's how --
12 so I would have printed out the things I needed for the day,
13 and that would have been one of them and the resume was
14 another.
15 THE COURT: You don't remember why you needed it for
16 that day?
17 THE WITNESS: I don't. I can tell you a couple of
18 different situations in which I used that Fact Book broadly.
19 THE COURT: Well, I don't want you to speculate or
20 guess. Are you a person who generally shows up for meetings or
21 important events prepared? Is that your practice?
22 THE WITNESS: Generally, yeah, yes.
23 THE COURT: And one of the things on your schedule
24 that day was meeting Mr. Stoddard, correct?

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1 THE COURT: And since you had taken the initiative to
2 try to work for ABC, were you excited about the opportunity to
3 meet Mr. Stoddard. What is he, the COO?
4 THE WITNESS: Yes. I actually knew I was going to
5 meet him -- I think the 29th was a -- was a Monday. I knew I
6 was going to meet him that Monday the Friday before and had
7 spent the weekend talking with my wife, as I often do, about
8 health care and what kinds of problems these employees might
9 have and so did my preparation over the weekend and so by the
10 time Monday came, I was pretty ready to go. But obviously had
11 a day of work to do and so --
12 THE COURT: Part of a day at work.
13 THE WITNESS: Part of a day of work, thank you.
14 THE COURT: Do you remember seeing Mr. Stoddard on
15 October 29?
16 THE WITNESS: Oh, I remember that, yes.
17 THE COURT: Do you remember anything else you did that
18 day?
19 THE WITNESS: Honestly, no. That was kind of the
20 significant event of the day for me.
21 THE COURT: Yes. It was significant.
23 THE COURT: So why shouldn't I believe that you
24 printed out the document to continue your preparation for your
25 meeting with Mr. Stoddard so you could impress him?

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1 THE WITNESS: The document wouldn't have been relevant
2 for Mr. Stoddard. It was a focus on Optum and growing Optum's
3 businesses in the health care market, not a benefits consultant
4 looking to improve employee-specific issues. At no point in
5 our interview did that topic even come up, nor would it have.
6 There's really no reason why I would have used that for that
7 purpose.
8 I agree the timing is unfortunate. But again, this is
9 a corporate strategy document. I was on the corporate strategy
10 team. I printed out documents like this all the time. And
11 this day happened to be the day that I went and talked to
12 Mr. Stoddard and, you know, I -- I think it's also worth noting
13 that, you know, I think we talked about the interview, so I
14 won't go into that again, but at no point in that interview and
15 other interviews I've had or my time working at ABC has
16 anything that was in the Fact Book or frankly work that I did
17 specific to Optum that was confidential come up as a useful
18 piece of information for me.
19 THE COURT: When you went to the interview, did you
20 know what role you would be discussing with Mr. Stoddard?
21 THE WITNESS: No. I knew it was for ABC.
22 THE COURT: Did you know it would be a pension
23 benefits role as you've described it?
24 THE WITNESS: Yeah, so that part I -- I mean, that has
25 been kind of described in the press as these three

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1 organizations are coming together for this purpose to help
2 their employees, you know, all that stuff. So that stuff, I
3 knew that. And I knew, I think, coming back to my earlier
4 point, this was the thing that was so exciting is that it was
5 so different for me.
6 THE COURT: But it drew on your experience in the
7 health care industry?
8 THE WITNESS: Absolutely.
10 BY MR. SHEEHAN:
11 Q. Sir, you've testified that you had printed off that
12 document on more than one occasion?
13 A. Yes.
14 Q. And you sat in meetings with it. Did you sit in a meeting
15 with Mr. Weissel with it?
16 A. Yes. There would have been -- I can think of a couple of
17 different times I sat in a meeting with it.
18 Q. And have you seen your colleagues also with copies of that
19 document?
20 A. I don't know that I've seen specifically other colleagues
21 with that -- well, yes, I have seen one colleague with it,
22 yeah, at least, that I can remember.
23 Q. Who was that?
24 A. So the woman who was leading the team that did most of the
25 work on that was a woman named Mimi McCauley who -- I don't

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1 know if she had -- I mean, there were -- people had copies. I
2 think Mike had a printed-out copy at one point as well. So
3 this was a document that was used regularly with the strategy
4 team and then for the strategy team to use with business
5 leaders to help them understand the direction of the strategy.
6 Q. Now, there's been some evidence presented by a forensic
7 expert in this case -- well, forensic investigator in this
8 case, where Optum had your emails reviewed and your computer
9 reviewed and then in that affidavit presented to the court, in
10 the motions, they talk about your past three months of printing
11 and access. Do you have any -- is there any reason that your
12 printing of documents and access to documents would have been
13 different in the last three months of your work at Optum, or
14 was it pretty much the same throughout your employment?
15 THE WITNESS: It was pretty consistent throughout.
16 THE COURT: So pretty much consistent in October,
17 November and December as well as the three months prior to
18 that, right?
20 THE COURT: And pretty much consistent before that as
21 well?
22 THE WITNESS: Yeah. So in about August of 2017, I
23 took on this broader product role, and so before then my
24 documents would have been more focused on strategy. And after
25 August of 2017, it was a bit of product and a bit of strategy.

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1 So that's the only kind of significant difference in access.
2 Q. And sir, you've testified in your affidavit, but I think
3 it would be beneficial here now to testify live. Did you
4 leave -- did you take anything out of the office on the day
5 that you left, anything at all belonging to Optum?
6 A. Nothing belonging to Optum.
7 Q. Did you retain anything? Had you had anything in your
8 possession in your home or anywhere else, any documents that
9 were Optum's?
10 A. No.
11 Q. So any of these documents that they've referred to in
12 their pleadings or that counsel has referred to in argument,
13 did you at any time possess them outside of Optum?
14 A. Before I left Optum, I would sometimes take documents home
15 to read and bring them back. Yeah, I definitely did that. But
16 I threw everything away after I would use it. Or it was in my
17 office when I left.
18 Q. Okay. There's been an allegation that you were -- you had
19 inappropriate conversations with some junior members and this
20 apparently came to the attention of Mr. Wolin on December 4 of
21 2018. I'd like to just read the paragraph here. I'll just --
22 it was December 4. It's alleged that you asked junior members
23 on the corporate strategy team for secret information that had
24 nothing to do with your job. What do you have to say about
25 that?
171
1 A. I think it's helpful to understand the layout of the
2 Boston office. There are -- where I work, there are three
3 offices in a row, Beth Merle, myself and Steve Wolin, and then
4 there's a bay of 10 to 15 cubicles, and that is kind of the
5 strategy team broadly in Boston. And people are in and out all
6 the time from New York, from Minneapolis, as well as the
7 broader strategy and product team. Daily I am out talking with
8 the people who are in the cubicles, talking with Beth, talking
9 with Steve. We use each other as a broad team to brainstorm
10 ideas, think about problems that we're looking at, work
11 together on issues. And so as a regular occurrence, I will be
12 working with, brainstorming with people in -- junior to me,
13 senior to me, everybody on the team on topics that are relevant
14 to me, that are relevant to them. They'll bring me into
15 brainstorming.
16 There was a session at some point in December where we did
17 a brainstorming session on a couple of junior employees' work
18 and we framed up the problem and thought through what the
19 potential answers would be. This happened all the -- and the
20 response back from -- you know, I think there should be an
21 email of that, that said, you know, this was great, we should
22 do this, you know, do this specific brainstorming session again
23 tomorrow, if we can. So this happened regularly. And it's how
24 we worked. It was our -- that was our job was to work together
25 to solve these problems.

172
1 So on December 4, does not stick out to me in any
2 particular way. As with any other day, I probably had multiple
3 conversations that day with multiple people, and at no point in
4 the last couple of months of my employment do I recall anyone,
5 you know -- I may not be the best judge of -- of discomfort for
6 other people, but at no point did I feel like anybody was
7 uncomfortable or did I feel like I was sticking my nose where
8 it didn't belong. This was an ongoing way that we did our
9 jobs.
10 Q. And two days later there was the big -- the strategy
11 meeting?
12 A. Yeah.
13 Q. That has been referred to. Now, where was Mr. Wolin's
14 office compared to yours?
15 A. Right next to mine.
16 Q. Was he around on December 4th and 5th and then for the
17 meeting on the 6th?
18 A. He was around on the 6th for the meeting. And the meeting
19 on December 6 happened in Minneapolis, so I don't recall if he
20 was there on the 4th or not.
21 Q. At no time did he or anyone pull you aside before you went
22 into that meeting on the 6th and say, we need to talk to you?
23 A. No.
24 Q. Now, you went to the meeting on the 6th. Did it cross
25 your mind or even now, thinking about it, do you think it was
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1 appropriate for you to be there for that meeting?
2 A. Yes. I think it was required for my job.
3 Q. And explain why, given where you were relative to the ABC
4 joint venture opportunity, why you attended the entire day?
5 A. At that stage I hadn't had the call from the recruiter
6 yet. I had no sense whether I was going to get an offer or
7 not. I was still an Optum employee. I worked very hard for
8 this company for a long period of time and continued up
9 until -- and honestly was going to go through until the end of
10 December. So this activity was no different than the one that
11 had happened in September, the one that had happened in July,
12 the one that happened a few months before that. These were
13 regular off-sites that we had where we would bring the team
14 together. Sometimes it was strategy, sometimes it was product.
15 Sometimes it was strategy and product. To talk through, excuse
16 me, again the work that we were all working on. So things that
17 maybe we weren't directly assigned to, we would all discuss and
18 work through problems on. Again, this collaborative nature of
19 driving to get an answer.
20 And the December 6 meeting was similar to that. The
21 structure of the team is that there's a -- you know, Mike runs
22 both product and strategy. There's -- Steve Wolin is the head
23 of strategy. Nick Seddon is the head of product, and then
24 there's six, seven of us, depending on when in the year you're
25 talking about, who kind of are the junior leaders on the team
174
1 below Nick and Steve, and then there's a team of, you know,
2 five or six people underneath that. And so the whole thing was
3 maybe 20 or 30 people across both teams.
4 As with most of the other regular off-sites that we were
5 having, I as a junior leader had a session. So did a number of
6 the other junior leaders. And I -- my session was sometime
7 around midday, so if I had not gone to that meeting, there
8 would have been a gap in the schedule. I was expected to be
9 there. The topic was product development and how we could work
10 together better, across different -- different product areas.
11 It was a kind of discussion and presentation combined. There
12 was a session earlier in the day, there were multiple sessions
13 later in the day and then at the end of the day, I got the call
14 from the recruiter.
15 Q. Was there anything that you, when you think of it today,
16 that you learned in that meeting that you didn't know before
17 you walked in there?
18 A. No. I -- each of the -- each of the junior leaders and I
19 talk on a regular basis, as I discussed earlier. So we all
20 know the work that we're all working on in different areas. It
21 was really an opportunity for the team, you know, the folks
22 kind of who reported in to us to engage a little bit more,
23 understand the -- the work, see what else is happening, work
24 through some problems together as a team. But the topics were
25 all topics that I already had exposure to. So nothing new came
175
1 out of that meeting for me.
2 Q. Did -- so when you were thinking about and hoping to get
3 an offer from the company, did you view this as getting an
4 offer from a competitor of Optum?
5 A. No.
6 Q. Can you explain your answer?
7 A. So partly we covered this in -- in some other contexts,
8 but to me, this is a -- you know, when I think about a
9 competitor, I think of the example that was raised earlier of
10 CVS, you know, working for the CVS pharmacy benefit manager.
11 That is a great example of a competitor. This is -- you know,
12 and I always saw it as this benefits consultant. Essentially
13 I'm working for JP Morgan benefits consulting or Amazon
14 benefits consulting. That is the -- that is the job. And so
15 it is a customer of Optum. Optum thinks about benefit
16 consultants all the time. And -- and so it never at any point
17 seemed like a direct competitor, nor did it -- nor does it seem
18 like that now.
19 Q. Take us back to the September of 2018 meeting in Boston,
20 in which there was war gaming going on.
21 A. Mm-hmm.
22 Q. I'd just like you to talk about it, if you would. Explain
23 it, describe it, give us the setting.
24 A. Sure, it was in Boston at the -- near Boston Landing,
25 where they have that new train station, and we got in a room
176
1 and talked through a number of things that day, again, similar
2 to other off-sites that were multiple topics and different
3 junior leaders would lead different sections and one of the
4 sections was on new entities in health care. So CVS and Aetna
5 are combining and Cigna and ESI are combining and, you know,
6 ABC is happening and so it was kind of a what should we do
7 about these companies? What are they going to say about us?
8 What are they going to do? What should we do in response?
9 And for most of the other -- or all of the other entities,
10 the conversation was, well, gosh, they're a competitor. Here
11 is how they might try to come in and, you know, compete with us
12 in particular areas, and when we got to ABC, the conversation
13 was, gosh, this is much more of a -- like, in fact, the direct
14 quote from Mike Weissel was this is a -- this is a customer
15 more so than a competitor. We need to think about how to
16 partner with them, and so that to me reinforced, as we talked
17 about earlier, the -- the idea that I kind of already was, you
18 know, stewing on, that this is a -- you know, a partnership
19 opportunity, not a -- not a competition.
20 Q. Did others -- you said what Mike Weissel said. Did others
21 share that view and express that view at the meeting?
22 A. Yeah, Mike put it out there. Steve was in -- was in
23 agreement and there wasn't much debate about this. There
24 wasn't a -- a big argument. Some of the other ones are
25 arguments about what we could and couldn't do so there was

177
1 argument in the air, but it was not -- this one was a pretty
2 clear how can we work with this company going forward.
3 Q. Okay. Was there ever any other time, say, on a periodic
4 basis when you and your team or -- there at Optum either
5 identified who they viewed as competitors and talked about
6 that?
7 A. Yeah. On a quarterly basis, we would submit a -- think of
8 it as kind of a one-page document to the board. It's both
9 sides that would say, you know, here is the latest description
10 of the businesses that we have, a little bit about the really
11 high-level financials and then who are the key competitors for
12 each of these areas. And so there would be a list of
13 competitors down each of the -- you know, Optum has 500
14 products. It has all of these different, you know, business
15 units. So breaking it down a little bit more tactically to
16 these are the competitors for each of these types of businesses
17 that often runs as if -- it's a helpful way to understand the
18 marketplace and who is a competitor.
19 And, you know, part of the reason, I think, you noted
20 that, you know, board of directors document is one that I
21 printed out because I often helped to update that document and
22 so, you know, on the list of competitors is not ABC, which is
23 partly why I was surprised that -- that we had that
24 conversation earlier about the email with -- with Ananya.
25 Q. Now, let's go back to when you got the offer.

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1 THE COURT: Let -- let me ask you this, about how much
2 longer do you expect to be? And I'm not trying to hurry you.
3 I just want to know.
4 MR. SHEEHAN: Maybe ten minutes.
5 THE COURT: Okay.
6 MR. SHEEHAN: Hopefully less. May I proceed?
7 THE COURT: Yes.
8 BY MR SHEEHAN:
9 Q. Okay. Mr. Smith, when you got the offer, you didn't
10 decide on the spot, you had to think about it; is that right?
11 A. Correct.
12 Q. Explain to us that process because this was now December
13 6 --
14 A. Right.
15 Q. -- through December 10, the weekend?
16 A. Yeah. So I received the call on December 6. I called my
17 wife. We talked about it for a while on the phone there in
18 Minneapolis and then when I came home that weekend, you know,
19 in interviewing, we didn't really talk about whether or not I
20 would take the job because it was unclear that I would get it
21 and it was this, you know, again, a once in a lifetime
22 opportunity so, you know, I didn't -- I had no assumptions
23 about whether or not I would -- I would receive an offer.
24 So when I got the offer, we had the conversation. We kind
25 of co-parent two kids. We share pick-up and drop-off and, you

179
1 know, I think had a very good system in place at my current
2 employment with Optum and so needed to think about this new
3 entity, ABC. It was going to be a different lifestyle. It
4 might mean a lot more time on the road. Might look a little
5 bit more like my consulting experience at Bain beforehand. And
6 so there was a -- we had to talk about whether or not we as a
7 family could do this because if I was going to do it, I was
8 going to do it, you know, all in.
9 And so we talked over the weekend, called our respective
10 parents and figured out a new system of childcare and -- and
11 so, you know, by the time the 11th rolled around, we had kind
12 of gotten to the, you know, I think -- I think we can do this.
13 Q. There was some suggestion that it was a -- you made a move
14 and you were being paid more money. That's not accurate, is
15 it?
16 A. No. So I think the confusion is the -- the base salary
17 at -- at Optum is lower, but that is only because it doesn't
18 include the options and a bonus. And when you put the actual
19 compensation next to each other, Optum -- I would have received
20 more compensation at Optum than I did at -- than I am at ABC.
21 Q. When did you make your decision and then announce your
22 decision to resign?
23 A. I signed my offer on -- I think my wife and I finally
24 decided on the -- on the 10th so I signed my offer the evening
25 of the 10th. So I signed my offer on the 11th, and I called up

180
1 Nick Seddon as my -- he's not my in-line boss so I report to
2 Steve Wolin but I spend most of my time working with Nick
3 Seddon -- spent, sorry, and so I called Nick first to say I've
4 been offered and accepted a role with ABC. And I'm here
5 until -- I'd like to be here until the end of the year to help
6 you transition and I'll start working on that now, but let me
7 know how you want to manage communication, because I didn't
8 want to -- there's optics and politics and I just wanted to
9 give him the opportunity to talk to Mike and Steve and figure
10 out how they wanted to do it.
11 They had a meeting out of town on Tuesday, so Mike and
12 Steve were not in the office, I think, Monday or Tuesday and so
13 they were back on Wednesday, the 13th. I may be wrong on the
14 days of the week but I feel like -- sorry, the 11th is a
15 Tuesday. They were out of town on Tuesday, Wednesday and then
16 Thursday they were back on the 13th.
17 So on the 13th I went and spoke with Mike in person
18 because I felt like this wasn't something I, you know, was
19 going to do over the phone and he was going to be here in
20 person. So I talked to him in person. I said I've accepted an
21 offer to go work at ABC. He said, I'm -- you know, sorry to
22 hear it. We always like to have the opportunity to, you know,
23 counteroffer. But good luck and I'm sure we'll be partnering
24 together soon. He also said go down and talk to Steve Wolin.
25 THE COURT: I'm sorry, who were you having that

181
1 conversation with?
2 THE WITNESS: That was with Mike Weissel and that was
3 the morning of Thursday the 13th. Then I immediately went down
4 and talked to Steve Wolin, very similar conversation, very
5 cordial, you know, sorry to see you go. And then I, you know,
6 said the same thing. You know, I'll be here until the end of
7 the year, working on transition. I -- you know, obviously
8 there's a lot of stuff I'm still working on.
9 BY MR. Sheehan:
10 Q. Let me stop you right there.
11 A. Yeah.
12 Q. So was it your expectation -- when you were announcing
13 your resignation to Mr. Weissel and Mr. Wolin, was it your
14 expectation that you -- you'd start with your new employer in
15 January but you would work for Optum through the end of the
16 year?
17 A. Yes, a woman who is very similar to me in role had left
18 in, I think, November and done something very similar where she
19 had two weeks where she worked, and she was going to another
20 company in the health care space, and so I wanted to -- she had
21 kind of done a good job of transitioning, so I wanted to do the
22 same thing; so my expectation was that I would work through the
23 end of the year for -- for Optum.
24 Q. Well, that changed a little later in the day.
25 A. Yes.
182
1 Q. Explain what happened.
2 A. So around midday Mike Weissel came to me and said, I've
3 talked a bit with legal and we think it's best that you recuse
4 yourself from anything that might be sensitive information for
5 Optum.
6 And so I said okay and I canceled a few meetings that I
7 could see later in the week or that next week that might be
8 sensitive and kind of went back to working on the transition
9 that I talked about with Nick. Around 3:00 Steve came out --
10 or walks next door and said, I had a conversation with legal.
11 We think it's best that you leave now. And so I -- I asked him
12 if it was okay for me to finish up that transition email to
13 Nick and he said, you should probably just send it and go, so I
14 sent him a partially finished email about all the things that
15 were up in the air that I was working on and then left the
16 building with, as I said earlier, absolutely no files, no
17 nothing from -- from Optum. Nick then replied to that email
18 and sent it to my personal email to finish it up. There wasn't
19 anything confidential in that email. It was just a list of
20 things that I was working on. And so I finished up that email
21 that evening at night and sent it back to him from my personal
22 email; and then that was essentially the end of my
23 communication with Optum.
24 Q. Until the day that you got the letter --
25 A. Correct.
183
1 Q. -- from the company with all of these allegations against
2 you, right?
3 A. Correct.
4 Q. Did you also have another communication with anyone from
5 -- anyone from Optum that day?
6 A. Yes. So Mike Weissel called me on the 21st when the
7 letter from Mrs. Short came and just said, I think you
8 mentioned this earlier, but wanted to let you know this letter
9 is coming, it's not pretty. It's not personal. But wanted to
10 just kind of give you a heads up. You should get a lawyer.
11 And I think a courtesy call and, you know, that was -- that was
12 the conversation. And then I think I got the email that day
13 with the letter and the physical letter showed up a couple of
14 days later.
15 Q. I need to go back to one that I missed. In the day -- on
16 December 10th --
17 A. Yes.
18 Q. -- there's been an allegation about your printing of the
19 OES socialization deck.
20 A. Yes.
21 Q. Do you recall that -- seeing that allegation?
22 A. Yes.
23 Q. Explain to the court what that's all about.
24 A. So the two documents that are specifically called out, the
25 first one is a -- as we talked about, a high-level perspective

184
1 on the market from Optum -- excuse me -- what, you know,
2 specifically pertained to how Optum can grow its businesses,
3 you know, fairly -- fairly high level, very market focused. I
4 contributed to some of that work. Second document, the one on
5 the 10th was the socialization deck, was a more refined view of
6 the types of things that businesses should do for strategy.
7 I think this is a really, really important point. So the
8 deck was called "the socialization deck." The point of the
9 deck was to help the businesses understand how to drive their
10 strategies and how to construct their strategies. These were
11 early views of the overall enterprise strategy. The businesses
12 were then going to take those, work on them, and then come back
13 in February, March, April -- I don't know exactly when the --
14 the full length of the project was. But my job was to help
15 businesses understand those strategies.
16 And so printing out that document in the -- the purpose of
17 -- of why, you know, the corporate strategy group was to use
18 that document to help businesses understand the direction of
19 their strategy. I apologize if I'm repeating myself, but I
20 think it's a very important point that I'm not printing out
21 these documents for -- to solidify some understanding of what
22 Optum's strategy is. I'm printing out these documents because
23 that is my job, and I did my job as hard as I could.
24 THE COURT: So you printed it out on December 10th?

185
1 THE COURT: About what time?
2 THE WITNESS: I don't know, honestly.
3 THE COURT: And then what did you do with it?
4 THE WITNESS: So I was working on a project in the
5 pharmacy benefit management space with Optum Rx. They were
6 looking at -- I won't get into too much detail on this, but
7 they were looking at strategies to grow in certain segments
8 with insurers that they wanted to grow in, and part of the --
9 part of the goal was to say across -- you know, think about how
10 you can work better with different businesses. And so the -- I
11 used that document to help shape the conversations we were
12 having about, you know, don't just think about selling one
13 product to insurers or how you can do that better. Think about
14 all the different pieces you can sell and what is that total
15 opportunity.
16 THE COURT: Do you remember doing that on December
17 10th?
19 THE COURT: Who did you talk to?
20 THE WITNESS: So there was a junior member of the
21 team, Laurie Graham, that I worked directly with on this
22 project and there were three or four folks that we worked
23 directly with in Optum Rx that I honestly do not remember the
24 name of, but that was kind of the working team that was focused
25 on this particular piece of work.

186
1 THE COURT: Okay. Thank you.
2 BY MR. SHEEHAN:
3 Q. And your expectation at that point was even when you
4 resigned you'd continue to work through the end of the year?
5 A. Yes, yes, I -- the 10th -- you know, even after I talked
6 to Nick and talked to Mike and Steve, my intention was to
7 continue to help this group and, quite frankly, just do my job
8 for the rest of the year.
9 Q. Anything in the socialization document that is useful in
10 any way to you in your job --
11 A. No.
12 Q. -- at ABC?
13 A. No. Again, these are documents that are specific to Optum
14 and the set of assets that Optum has and the products that they
15 sell into the market. ABC has no products, has no specific
16 plans to sell products into the market and would be -- if
17 anything, you know, I think this is kind of -- comes to the --
18 the surprise that I had at all of this event, is that I would
19 have expected Optum to be excited that somebody who really
20 enjoyed working at this company was working at a potential
21 customer or a customer that -- that existed going forward and
22 so I think this is -- that kind of helps explain a little bit
23 of why I was fairly surprised by frankly all of this.
24 Q. Sir, if a -- if there was an order -- let me -- let me
25 step back. You know that several times since December 21st,
187
1 one of the -- one of the requests, sometimes demands, of Optum
2 have been that you stop working for your new employer. And
3 you've declined that, right?
4 A. Correct.
5 Q. Sir, if the court were to order that, what would be the
6 impact to you?
7 A. Well, I would be out of work. My income would stop. We
8 would have to start drawing down on our savings. I -- I'm
9 honestly not sure where else I would go to work, given kind of
10 the conversation here today and what I understand. And so I
11 don't -- I don't really know what I would do.
12 Q. Well, and also just -- your testimony is you weren't
13 planning on leaving Optum. You weren't look -- you weren't
14 looking to leave your job?
15 A. No. I was happy at Optum. I enjoyed that role. I liked
16 the people I worked with.
17 Q. But this opportunity, how do you describe this?
18 A. This was a once in a lifetime opportunity for me. This
19 was a unique set of circumstances, a very unique CEO. It was
20 an opportunity I -- I couldn't -- I couldn't pass up and
21 frankly it was a new situation for me, a new opportunity, a new
22 challenge.
23 MR. SHEEHAN: Your Honor, I -- I believe I'm done but
24 I just want to confer with my colleagues.
25 THE COURT: Okay.

188
1 BY MR. SHEEHAN:
2 Q. Now, Mr. Smith, there's been some communication between
3 you and Optum and your counsel on your behalf and Optum. And
4 fair to say that you have represented to Optum that you do have
5 some documents, not confidential, but some documents, the one
6 with the head shot?
7 A. Yes.
8 Q. Some personnel documents?
9 A. Yes.
10 Q. And have you gotten any -- have you asked what they would
11 like you to do with them?
12 A. Through my counsel I have asked multiple times.
13 Q. Have you gotten any direction from them to return those?
14 A. No.
15 Q. And that's all you've got, right?
16 A. Yeah, that's -- that is -- those are the -- that's
17 everything.
18 MR. SHEEHAN: I don't have any more questions, Your
19 Honor.
20 THE COURT: Is there any redirect?
21 MR. BECK: Very little, Your Honor.
22 REDIRECT EXAMINATION BY MR. BECK:
23 Q. Mr. Smith, the documents that you were -- the email that
24 you were just discussing is in your personal email account?
25 A. No longer.
189
1 Q. No longer. Where is it now?
2 A. So when I turned my computer over to the forensics folks,
3 StoneTurn, they went through everything, looked at everything,
4 found the November 10th email with the head shot and they --
5 they've deleted it, but they've recorded it so they have -- I
6 still don't have my computer back so it's all -- it's all with
7 them. But they --
8 Q. Okay. So --
9 A. -- disposed of that email.
10 Q. And -- and does your counsel know that?
11 A. Yes.
12 THE COURT: I think -- here. What are you asking
13 about, the documents that --
14 MR. BECK: The email document that he's talking about
15 that he had and that they've made an issue that -- they've
16 offered to turn that back and we've said no. In conversations
17 with counsel, we asked about whether it was forensically
18 preserved. It's very hard to forensically preserve emails.
19 And so we've said until the -- prior to him starting work we
20 had understood that he wasn't going to be working so there
21 wasn't a risk of its use at that point and also that because
22 it's not forensically preserved, we would need the ability to
23 actually see the document in context, not pulled out by
24 somebody else. Now we have an interesting issue, that the
25 email was deleted out of the account. So now we don't know

190
1 what, if any, metadata has been lost around that.
2 MR. SHEEHAN: Well, Your Honor, if I could just speak
3 to that, it's really not a --
4 THE COURT: I was just --
5 MR. SHEEHAN: -- it's not an issue for the witness. I
6 can speak to it.
7 THE COURT: You don't need to speak to it now.
8 MR. SHEEHAN: I can speak to later.
9 THE COURT: I was trying to understand.
10 MR. SHEEHAN: Nothing's been spoliated. Everything's
11 been preserved.
12 THE COURT: Okay.
13 MR. SHEEHAN: Not a problem.
14 THE COURT: I just wanted to understand the question.
15 I didn't -- I didn't know what document we were -- you were
16 talking about. Go ahead.
17 BY MR. BECK:
18 Q. You said Mr. Weissel told you to get a lawyer on December
19 21st?
20 A. Yes.
21 Q. And two weeks before that, you had spoken with Mr. Wolin,
22 right?
23 A. On the 13th.
24 Q. On the 13th. Almost two weeks before that you told
25 Mr. Wolin -- well, let me ask you, do you deny that you told --
191
1 that Mr. Wolin said to you that he was uncomfortable with your
2 plans to join ABC? Do you deny that?
3 A. Yes.
4 Q. You deny that.
5 A. I would have remembered him saying the word
6 "uncomfortable."
7 Q. You don't remember that or you deny it?
8 A. No, I -- I don't know the difference.
9 Q. Well, the difference would be that Mr. Wolin might have
10 said it, and you're not sure, or you're saying Mr. Wolin did
11 not say that to me?
12 A. No. He did not say that to me.
13 Q. Okay. Did Mr. Wolin tell you -- do you deny that
14 Mr. Wolin told you that you would have an issue with your
15 noncompete if you went to ABC?
16 A. Yes. I -- he did not say that to me.
17 Q. He did not say that to you. So -- and do you deny that
18 Mr. Wolin told you that you'd have a problem with your equity
19 grounds if you went to ABC?
20 A. Yes, I --
21 Q. You deny that as well?
22 A. Yes.
23 Q. So according to you, Mr. Wolin never -- never said that?
24 A. No. What he said when I left was --
25 Q. That's -- he never said that to you, period, right?

192
1 A. He never said what to me, sorry?
2 Q. The two things that I just asked you.
3 A. No.
4 Q. Thank you. And did you -- do you deny that you told him
5 you had spoken with a lawyer?
6 A. I don't remember that.
7 Q. Did you tell him that your lawyer -- did you tell
8 Mr. Wolin that your lawyer told you that you wouldn't have a
9 problem with your noncompete?
10 A. I don't -- I don't -- I don't think so, no.
11 Q. You don't think so, or you don't know?
12 A. I do not remember.
13 Q. You did not do it?
14 A. I won't deny that, but I don't remember it.
15 Q. So it's possible that you told him that?
16 A. It's possible.
17 Q. Okay.
18 THE COURT: Possible he told him what?
19 BY MR. BECK:
20 Q. Is it possible that you told Mr. Wolin that you had spoken
21 with a -- with a lawyer who told you the noncompete was not
22 going to be an issue?
23 A. Yes, it's possible.
24 Q. Okay. So I understand and make sure that I heard you
25 correctly, on the Fact Book, did you say -- I think you I heard
193
1 you say two times that you printed that out on multiple
2 occasions?
3 A. The Fact Book, yes.
4 Q. Yes. Fact Book on multiple occasions?
5 A. I had -- I had -- yes.
6 Q. Okay. And the most recent -- the most recent one was on
7 October 29, at 9:51 a.m.?
8 A. I don't remember if that's the most recent.
9 Q. Do you have any recollection of printing it at any other
10 time?
11 A. I do remember -- I do remember that I have thrown it out
12 and then a couple of days later realized I needed it again and
13 had to print it out again, but I do not remember if that was
14 the 29th or that was a different day and I may have printed it
15 other times.
16 Q. So if Mr. Andrews testifies that on a print log there are
17 zero other times of you ever printing that document, are you
18 suggesting that that would be incorrect?
19 A. I would be very surprised if that was the case.
20 Q. Okay. But if Mr. -- so -- you'd be surprised?
21 A. Yes, because I definitely had a physical copy, and so that
22 would mean that I got it from somebody else.
23 Q. I'm sorry. So you got it from someone else or you printed
24 it?
25 A. So I had a physical copy. I threw it out. Then I

194
1 realized I needed it again. So I printed it out again.
2 Q. Okay. So --
3 A. I remember the --
4 THE COURT REPORTER: I'm sorry. I'm sorry.
5 The COURT: You're going to have to go one at a time.
6 THE WITNESS: Okay. Sorry.
7 THE COURT: You've asked some questions. Now you've
8 got to let him answer it.
9 MR. BECK: I just want to make sure I'm hearing it
10 correctly. We have two times that you just said you printed
11 it.
12 A. I had -- I had a physical copy. I believe I printed that.
13 and I threw it out at some point, as I did with all of these
14 documents. Then a couple of days after that, I realized I
15 needed it, and I was frustrated that I had thrown it out, which
16 is why I remember that and I printed it out again. I believe I
17 printed it out the first time. But if I didn't, I would have
18 gotten it from somebody else, whether it was that document, or
19 a different version of that document or something like that,
20 but I definitely know that I've had the document two separate
21 times at least.
22 Q. Okay. So the -- so the testimony before that you
23 printed -- that you said twice and then initially to me as well
24 that you had printed it out multiple times, what I'm hearing
25 now is that you don't know whether you've printed out -- you've
195
1 had it before, but you never -- you're not sure whether you
2 printed it out multiple times?
3 A. Yes.
4 Q. All right. So if Mr. Wolin -- if Mr. Andrews testifies
5 that you never printed it out before, maybe now that's
6 consistent with your current testimony?
7 A. If that's what comes out, that could be consistent, yes.
8 Q. Okay. And by December 10, you were planning to accept an
9 offer -- strike that.
10 You mentioned there was a woman who -- who left a little
11 bit before you and went over to another health care company?
12 A. Correct.
13 Q. Who was that woman?
14 A. Elena Avramov.
15 Q. Did she have a noncompete?
16 A. I don't know.
17 Q. And do you know where she went to work?
18 A. She went to a health system in New Jersey.
19 Q. What's a health system?
20 A. A hospital that has primary care facilities and acute care
21 centers, so just like Optum has some primary care facilities,
22 this also has things like that. They also have surgery
23 centers, so similar to how Optum has surgery centers.
24 MR. BECK: That's it, Your Honor. Thank you.
25 THE COURT: Are there any further questions?

196
1 MR. SHEEHAN: No further questions, Your Honor.
2 THE COURT: I may have a few. Were you in Minneapolis
3 on December 6?
4 THE WITNESS: Yes.
5 THE COURT: And you made a presentation at midday?
6 THE WITNESS: Yes.
7 THE COURT: And then you received an offer later that
8 afternoon?
10 THE COURT: How did you receive it?
11 THE WITNESS: By phone.
12 THE COURT: And what were the terms of the offer?
13 THE WITNESS: It was a salary, was the number that's
14 been discussed --
15 THE COURT: $300,000?
16 THE WITNESS: Yes, the title, which was a director.
17 And I think that was mostly -- those -- that was the
18 conversation.
19 THE COURT: And had you had discussions with the
20 recruiter or someone at ABC about what your salary would be if
21 they made you an offer?
22 THE WITNESS: Before that call?
23 THE COURT: Before that call.
25 THE COURT: Once or more than once?

197
1 THE WITNESS: Once.
2 THE COURT: How much before December 6?
3 THE WITNESS: Early in the conversation, like sometime
4 in -- I want to say, like, early November or something like
5 that. It's a standard question that people ask in interviews
6 to say, how much do you make now? What are you expecting for
7 another job? That kind of thing.
8 THE COURT: And had you had any negotiations about
9 what your salary would be in discussions back and forth prior
10 to December 6th?
11 THE WITNESS: No. I just said, here is what I make
12 now. I'm very interested in this organization. I mean, that
13 was it.
14 THE COURT: But just one time?
16 THE COURT: Because you said you had no idea that you
17 were going to be offered a job on December 6; is that right?
18 THE WITNESS: That's correct.
19 THE COURT: Can somebody give him a copy of his
20 affidavit, also put it up on the presenter? Docket No. 23-1.
21 And does he have a copy of it?
22 MR. SHEEHAN: I just put a copy in front of him, Your
23 Honor.
24 THE WITNESS: Yeah, I have one here.
25 THE COURT: Thank you. I'm sorry. I wasn't looking.

198
1 Would you go to paragraph 15, please, on page 5.
3 THE COURT: It says "On December 21, 2018, Optum sent
4 me a letter threatening to bring legal action against me. As I
5 have represented to Optum through my counsel, the only UHG or
6 Optum documents I have in my possession are an email chain with
7 a slide deck attachment containing my head shot, some of my own
8 personnel and on-boarding documents and some publicly filed UHG
9 reports."
10 And you signed this affidavit on January 21, 2019.
12 THE COURT: Prior to January 21, 2019, did you have
13 any Optum documents in addition to those in paragraph 15?
14 THE WITNESS: Between -- from the moment I walked out
15 of Optum on December 13th through today, this is -- this is
16 true. I had no --
17 THE COURT: That's all you ever had?
18 THE WITNESS: That's all I ever had.
19 THE COURT: What about prior to December 13; did you
20 have outside of Optum's offices some Optum documents?
21 THE WITNESS: Yes. I would -- if I was flying to
22 Minneapolis, I would bring printouts in my backpack. I would
23 bring printouts home from time to time to read them. Again,
24 physical printouts, as my new employers will attest to as well,
25 is kind of my preferred method of reading and digesting

199
1 information.
2 THE COURT: This you just testified to somewhat, but I
3 want to be clear on it. Paragraph 25 on page 9, it's about the
4 socialization deck. You say you relied heavily on this
5 document when preparing for the December 6, 2018 quarterly
6 strategy meeting.
8 THE COURT: It's about six lines down; is that right?
9 THE WITNESS: Yes.
10 THE COURT: And did you have a printed copy of it to
11 prepare for the December 6 meeting?
12 THE WITNESS: I did. I remember one. But the
13 printing records say that I didn't print it, and so I must have
14 got it from somebody else somehow.
15 THE COURT: All right. And then you printed it on
16 December 10?
18 THE COURT: That's correct? And at that time you had
19 an offer from Optum.
21 THE COURT: And I may have just asked you this a few
22 minutes ago myself. Do you have a memory of having discussed
23 that document or used that document in discussions with someone
24 at Optum on December 10 after you printed it out?

200
1 THE COURT: With whom?
2 THE WITNESS: With Laurie Graham, who was a junior
3 member of the strategy team, for purposes of the -- there was a
4 pharmacy benefit management piece of work that I was part of
5 and she was a part of and a few others, and Optum Rx were also
6 part of it, and our goal was to help them understand what was
7 in that deck and think about their strategy in relation to
8 that.
9 THE COURT: Where did that conversation or meeting
10 take place?
11 THE WITNESS: In Boston.
12 THE COURT: Where in Boston?
13 THE WITNESS: In my office in Boston. For reference,
14 Laurie sits directly -- you know, in that same set of cubicles
15 and so --
16 THE COURT: Take a look at paragraph 5 of your
17 affidavit, please. It's on page 2.
18 THE WITNESS: Yep.
19 THE COURT: So you say "My role at Optum involved
20 working on Optum's strategies and products in areas including
21 workmen's compensation, population health and pharmacy
22 benefits."
24 THE COURT: What did you do relating to workmen's
25 compensation?
201
1 THE WITNESS: So workers' compensation, Optum has a
2 number of different businesses, including the pharmacy benefits
3 side of things, so when you get injured, who covers your -- the
4 drugs you need to recover. Medical equipment like the -- the
5 walkers you might need or a cane. It includes, you know,
6 transportation to --
7 THE COURT: But are any of those things workmen's
8 compensation?
9 THE WITNESS: All of those happen when you get injured
10 and you're covered by workers' comp. They could be covered by
11 that. And so some of the work I did was around how to bring
12 that together a little bit more holistically.
13 THE COURT: And are you doing -- or do you expect to
14 be doing the same or similar work for ABC?
15 THE WITNESS: No, I don't -- so it's a weird
16 technicality of -- of the health care market that workers' comp
17 is kind of a separate issue. It's a -- there's -- for various
18 reasons there's workers' compensation carriers that are kind of
19 separate and Optum is selling services to those carriers. So
20 it wouldn't really pertain at all to an employer because the
21 employer contracts with the carriers.
22 THE COURT: And you also said you worked at Optum on
23 strategy and products in areas including population health?
24 THE WITNESS: Mm-hmm.
25 The COURT: You may have answered this already, but

202
1 what do you mean by population health.
2 THE WITNESS: So there are services like if you have
3 diabetes, and you have -- you want to know what next
4 appointment to go to or Optum has nurses on call who can help
5 talk to you about where to go, and so that kind of a business
6 they might actually sell to somebody like Amazon or JP Morgan
7 or Berkshire.
8 THE COURT: Are you working on population health for
9 ABC, either strategy or products?
10 THE WITNESS: Sorry?
11 THE COURT: Are you working on population health for
12 ABC, either strategy or products?
13 THE WITNESS: Not currently.
14 THE COURT: Do you expect to be in the foreseeable
15 future?
16 THE WITNESS: Not in the foreseeable future, no.
17 THE COURT: And I think pharmacy benefits you talked
18 about earlier. That's like what you might get -- one --
19 THE WITNESS: Group projects.
20 THE COURT: -- might get from CVS Caremark?
21 THE WITNESS: Right.
22 THE COURT: Let me give you -- I know I asked you this
23 once before. But let me give you a chance to address it again.
24 So October 29 at 9:51 a.m., you print out the confidential Fact
25 Book. Immediately following that you point out -- print out

203
1 your resume and you took your resume to see Mr. Stoddard,
2 correct?
4 THE COURT: And you don't -- am I correct that you
5 don't recall why specifically you printed out the Fact Book
6 that day or what, if anything, you did with it that day; is
7 that right?
8 THE WITNESS: That specific day, no. I can tell you
9 broadly what I was working on at that time.
10 THE COURT: So why shouldn't I believe that you didn't
11 print out the -- why shouldn't I find -- why shouldn't I find
12 that you printed out the Fact Book to prepare for your
13 important interview with Mr. Stoddard?
14 THE WITNESS: So a couple reasons. One is, I guess,
15 partly you have to believe -- I wouldn't do something like
16 that. Partly is that it wouldn't be relevant to that
17 conversation. Discussion with Jack was not going to be a -- I
18 mean, I knew this going in, but he also at no point asked me
19 any questions about Optum's strategy or Optum's perspective on
20 the market. The conversation was around the employees of
21 Amazon, Berkshire, JP Morgan and some of the issues that they
22 probably are facing. So it wouldn't have been useful to me.
23 So, A, I would not have done it; B, it would not have
24 been useful; and C, I did my prep for that interview over the
25 weekend. I spent a lot of time talking with my wife, thinking

204
1 about kind of what issues those employees might have. You
2 know, it was -- it was a very engaging weekend, frankly. I
3 remember that very distinctly. And so Monday I worked. I,
4 again, did my job until it was time to go to the interview, and
5 for me, those are -- those were different -- different things,
6 different worlds for me.
7 THE COURT: All right. Did my questions suggest
8 further questions to counsel?
9 MR. SHEEHAN: No, Your Honor.
10 THE COURT: Mr. Beck?
11 BY MR. BECK:
12 Q. Do you have a printer at home?
13 A. Yes.
14 Q. Did you ever print documents from Optum at home?
15 A. No.
16 Q. Never?
17 A. No.
18 Q. All the time you worked there, you never printed a
19 document at home?
20 A. No. I don't -- I think you can look at my work computer.
21 I don't think it's connected to -- it would have to be
22 wirelessly connected to that printer to print anything from --
23 from home so, no. Short answer. Sorry.
24 THE COURT: Okay. You may be seated.

205
1 THE COURT: It's quarter of 6:00, and I'll express
2 great gratitude to my staff for staying here, but this is an
3 urgent matter. So let's see where we are. I do now have
4 defendant -- Mr. Smith, you can take your seat back in the
5 gallery -- Mr. Smith's motion to stay the proceedings in a
6 memo. No affidavit is required by Rule 7.2. I note that page
7 2 of the memo says, "This court's decision to deny Smith's
8 motion to compel arbitration and to stay proceedings pending
9 arbitration are both immediately appealable as a matter of
10 right."
11 I haven't denied a motion to compel arbitration, and I
12 haven't denied a motion to stay. I just got the motion to
13 stay. I don't have a response. And I think the fact that this
14 is not a motion to -- that I haven't denied a motion to compel
15 arbitration, I'm dealing with a temporary restraining order.
16 It may make a difference. But in any event, can the
17 defendant -- I'm sorry -- the plaintiff respond to this by 9:00
18 tomorrow morning? Or is that not reasonable or feasible?
19 MR. BECK: We already have half our firm working --
21 MR. BECK: We already have half the firm working on
22 the case, Your Honor. And we have to get ready for tomorrow
23 with the other witnesses.
24 THE COURT: Well, I mean, here, I don't know really
25 where we are in this. Now I've heard from Mr. Smith, who was
206
1 the primary witness I was interested in hearing from. If I
2 hear some more testimony, I may be in a position to decide this
3 matter, although I still don't know how. I have to hear from
4 you, and I have to hear all the evidence I'm going to hear.
5 But will the next witnesses be shorter, do you expect?
6 MR. RIDEN: So --
7 THE COURT: Who are the next witnesses you want
8 called?
9 MR. RIDEN: So three. Mr. Stoddard, who I believe is
10 already lined up to come in tomorrow morning. And I don't
11 expect that he would be speaking as long, obviously, as
12 Mr. Smith would because he's only speaking about work at ABC
13 and what Smith is doing at ABC and what ABC does and certainly
14 the communications before Smith went to work for ABC.
15 Mr. Weissel, I think that the relevance of his testimony was
16 highlighted here today through Mr. Smith.
17 THE COURT: I don't think I have an affidavit from
18 Mr. Weissel, do I?
19 MR. RIDEN: You do not, that's correct, Your Honor.
20 THE COURT: So what's the relevance of his testimony?
21 MR. RIDEN: So what we've heard today is a lot of
22 discussion about his conversations with Mr. Weissel. One of
23 the most important points that keeps coming up and what's being
24 used against Optum here is Mr. Weissel's comment that is quoted
25 repeatedly that ABC is more of a customer than a competitor. I

207
1 think it's fair for this court to hear what Mr. Weissel meant
2 when he said that and how, in this ecosystem of companies, it's
3 possible to be both a customer and competitor.
4 THE COURT: That, hopefully, will be surgically
5 focused.
6 MR. RIDEN: Yes, Your Honor.
7 THE COURT: Because I don't have an affidavit. I
8 said -- I listed yesterday in my order who I regarded as the
9 potential witnesses. It didn't include Mr. Weissel. And then
10 who else?
11 MR. RIDEN: Then Mr. Wolin.
12 THE COURT: Mr. Wolin will testify about what
13 Mr. Smith did at Optum and their communications?
15 THE COURT: And the results of the forensic tests?
16 MR. RIDEN: That is for Mr. Christopher Andrews.
17 THE COURT: I thought you just -- I mean --
18 MR. RIDEN: If we were to get there.
19 THE COURT: I thought you said there were going to be
20 three witnesses.
21 MR. RIDEN: I think as far as the forensics, Your
22 Honor, I'm not hearing much dispute that the forensics are what
23 they are, and that Mr. Smith has acknowledged his printing
24 history is what it is. So I think that we can skate without
25 having the forensics expert testimony if the court doesn't want

208
1 to hear it.
2 MR. SHEEHAN: Well, not so fast.
3 THE COURT: What's that? Go ahead.
4 MR. SHEEHAN: I certainly -- there's been inferences
5 made and allegations referred to through questioning of counsel
6 that I think need to be met and challenged through the
7 cross-examination of this forensic investigator.
8 THE COURT: So you want Mr. Andrews to testify?
9 MR. SHEEHAN: I would like him to testify, and I will
10 be very short. I don't see the propriety of bringing
11 Mr. Nick -- I don't want to --
12 MR. RIDEN: Seddon.
13 MR. SHEEHAN: -- Nick Seddon, who was never presented
14 as a witness in the opening papers, closing papers.
15 THE COURT: I've canceled two criminal matters for
16 tomorrow afternoon, but my goal was to finish this, and I don't
17 always achieve this. It's always my goal to decide things
18 orally. And as always, I want to be fair about this, and now I
19 have a motion to stay proceedings, just based on certain
20 erroneous facts as of the moment, but -- you know, this was
21 very helpful this morning. This is a fluid situation. You
22 say, Here, listen to Mr. Smith. Now I've listened to
23 Mr. Smith. And it's helpful. I'll have to hear you and
24 consider what the implications of his testimony are, but it's
25 helpful. Should we just keep going and hear these witnesses

209
1 tomorrow morning and then --
2 MR. SHEEHAN: Well, one witness who I -- we have a Ms.
3 Caitlin Fleming who has been reading a book in the hall all
4 day, and I don't think -- I don't want to -- I don't make the
5 decision here.
6 THE COURT: They haven't said they wanted to call
7 Ms. Fleming. You haven't said you wanted to call Ms. Fleming.
8 I haven't said I perceive a need to call Ms. Fleming. But my
9 point is, putting aside who the witnesses are, I can order them
10 to -- and I typically hate -- well, I always hate to do this --
11 stay up all night, write me a memo, get it to me by 8:30 in the
12 morning, which would be about an hour at least after I get
13 here. But, you know, we seem to be an a track, you know, to
14 develop the record. And, you know, then I'll aim to decide the
15 matter soon, although I don't know how soon. And, you know, if
16 this should be -- you know, then you can go back to the stay.
17 What do you think you want to do?
18 MR. SHEEHAN: First, Ms. Fleming, so we'll just
19 release Ms. Fleming with Your Honor's permission.
20 THE COURT: Does she work here in Boston?
21 MR. SHEEHAN: She does. I think she can be called
22 back.
23 THE COURT: That's what I was going to say. If
24 something emerges that she should be called, we'll get her, but
25 you can release her.

210
1 MR. SHEEHAN: Then the other witness, Mr. Stoddard has
2 come to this the city. He's prepared to be here. But the
3 question is, after having this fulsome testimony by Mr. Smith,
4 whether he'd be redundant and necessary.
5 THE COURT: I think they want him. Do you want
6 Mr. Stoddard?
7 MR. BECK: I think we will confirm tomorrow morning,
8 but as of right now, yes, Your Honor.
9 THE COURT: Is he in Boston already? Or he's on his
10 way --
11 MR. SHEEHAN: I don't think already. I think sometime
12 this evening.
14 MR. SHEEHAN: I think sometime this evening. I don't
15 know exactly.
16 THE COURT: Hopefully by train with the weather
17 forecast. That's okay. No. I think if they want
18 Mr. Stoddard, I foresaw -- you know, he's subject to the
19 sequestration order. We'll see what he has to say.
20 MR. SHEEHAN: Just last, Your Honor, with regard to
21 your question to counsel, I want the record to be clear that
22 it's a conditional response, our motion to stay, and I hope
23 they're just typographical errors and not real factual errors
24 in what we've filed with the court. Ours is a motion to stay
25 while we appeal --
211
1 THE COURT: I understand.
2 MR. SHEEHAN: -- the court's order. But if the court
3 is --
4 THE COURT: My decision that I have the authority to
5 decide this, I understand that. But it says here the court's
6 decision to deny Smith's motion to compel arbitration is
7 immediately appealable. I haven't denied the motion to compel
8 arbitration. I read the contract to say I should decide that
9 after I decide whether a temporary restraining order is
10 justified.
11 MR. SHEEHAN: I would say, Your Honor, you haven't
12 reduced your decision to a writing, but by effectively
13 proceeding to this hearing, you've denied our motion in part.
14 THE COURT: Well, look, first, you agreed after I told
15 you what the options were that Mr. Smith should be called. If
16 you had taken a different view, I may have stopped and decided
17 the case based on the record as it then existed, whatever I
18 said earlier, whatever you said earlier.
19 Look, it's late. Everybody wants to be careful. But
20 silence might appear to be an adoptive admission. I didn't
21 deny the motion to compel arbitration. I'm going to allow the
22 motion at the appropriate time. It's not disputed. And I
23 haven't denied the motion to stay proceedings. I just got the
24 motion at the 4:15 break.
25 Well, plaintiff needs to be prepared to address this

212
1 motion to stay proceedings at some point tomorrow morning. And
2 if it can't be in writing, you know, just bring me the cases
3 you rely on, if you have any other than those I alerted you to.
4 Because at some point if I'm persuaded that I should stay the
5 proceedings, I'll just stop. But I'm not persuaded yet. All
6 right.
7 I ordered Mr. Stoddard to be here at 9:00 tomorrow
8 morning. I'm going to order you all come at 9:30, though.
9 There's a little more I want to read and reflect on. All
10 right? Anything further for today?
11 MR. RIDEN: Just to confirm, so I understand who we're
12 to have here tomorrow, that is Mr. Stoddard will be here, from
13 the other side, Mr. Weissel will be here for our side,
14 Mr. Wolin will be here and Mr. Chris Andrews will be here. Is
15 that correct?
16 THE COURT: Right. We will see if Mr. -- we'll see
17 how many of them are necessary but try to, you know, prepare
18 focused questioning for all of them. Okay?
19 All right. With great gratitude to the deputy clerk,
20 to the stenographer, to my law clerks, court is in recess.
21 (Adjourned, 5:53 p.m.)
22
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1 CERTIFICATE OF OFFICIAL REPORTER
3 I, Kelly Mortellite, Registered Merit Reporter
4 and Certified Realtime Reporter, in and for the United States
5 District Court for the District of Massachusetts, do hereby
6 certify that the foregoing transcript is a true and correct
7 transcript of the stenographically reported proceedings held in
8 the above-entitled matter to the best of my skill and ability.
9 Dated this 4nd day of February, 2019.
10
11 /s/ Kelly Mortellite
12 _______________________________
13 Kelly Mortellite, RMR, CRR
14 Official Court Reporter
15
16
17
18
19
20
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Optum Vs Smith Jan 30 Hearing

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Optum Vs Smith Jan 30 Hearing

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1

* S E A L E D * Attorneys' Eyes Only *

UNITED STATES DISTRICT COURT

BEFORE THE HONORABLE MARK L. WOLF

January 30, 2019

John J. Moakley United States Courthouse

Kelly Mortellite, RMR, CRR

2 Counsel on behalf of Plaintiffs:

8 Counsel on behalf of Defendant:

13 John F. Welsh, III

2 (Case called to order.)

3 THE COURT: Good morning. Would counsel please

4 identify themselves for the court and for the record.

5 MR. RIDEN: Good morning, Your Honor. For the

6 plaintiffs, Optum, Inc. and Optum Services, Inc., hereinafter

7 Optum, my name is Steve Riden from Beck Reed Riden.

8 MR. BECK: Good morning, Your Honor. Russell Beck

9 from Beck Reed Riden.

10 MS. JOSEPH: Good morning, Your Honor. Hannah Joseph

11 from Beck Reed Riden.

12 MS. SCHAEFER: Good morning, Your Honor. Lauren

13 Schaefer from Beck Reed Riden.

14 MR. SHEEHAN: Good morning, Your Honor. Michael

15 Sheehan on behalf of the defendant David Smith.

16 MR. WELSH: John Welsh on behalf of defendant Smith.

17 MR. MEAD: And Brian Mead on behalf of defendant Smith

20 Mr. Andrews present to testify if necessary as I ordered

23 is here, as is Mr. Andrews, in addition to other witnesses as

2 THE COURT: Because I issued that order on short

3 notice, I offered an opportunity for potential witnesses to

4 request being excused for today. And I did excuse

5 Mr. Stoddard, because I was told he doesn't live in Boston, on

6 the condition that he make arrangements to be here by 9:00 a.m.

7 tomorrow if his testimony is necessary. Where does he live?

8 MR. SHEEHAN: He lives in Philadelphia, and he's made

9 those arrangements, so he will be here if necessary for

11 THE COURT: Okay. And who is the representative of

12 the plaintiff for purposes of my sequestration order?

13 MR. RIDEN: So I'll give you a list of everybody who

14 is here for the plaintiff, if you don't mind, Your Honor. We

15 can go through who should be sequestered.

16 THE COURT: Okay.

17 MR. RIDEN: In attendance in the courtroom right now

18 are Marianne Short, chief legal officer of Optum; Mike Weissel,

19 who is the vice president of product and strategy for Optum;

20 and also Matthew Shores, who is the chief litigation counsel

22 Nick Seddon. He is somebody that can speak to the facts of

23 this case. Steve Wolin, who is a potential witness identified

24 by yourself, Your Honor, and Christopher Andrews, who is also a

25 potential witness you had identified.

1 THE COURT: Well, I think my intention was that

2 anybody who is a potential witness be sequestered, except you

3 have the right to designate a representative of Optum to be in

5 be the Optum -- and I wouldn't -- I assume that the two lawyers

6 you just mentioned are not potential witnesses; is that right?

7 MR. RIDEN: That's correct, Your Honor. And both

8 potential lawyers, if they could stay in the room, that would

9 be great. I'd also like to identify Matthew Starts [phon], who

10 is from Optum as well and not a witness.

11 THE COURT: All right.

12 MR. RIDEN: Mr. Weissel would like to testify, if

13 possible. He is sitting in the courtroom.

14 THE COURT: All right. Well, all of the potential

15 witnesses, so that's Wolin, Andrews and who are the other --

16 MR. RIDEN: Mr. Weissel.

17 THE COURT: Wasn't there another one?