Hartford Business Journal

12 HARTFORDBUSINESS.COM | MAY 31, 2021 By Liese Klein lklein@hartfordbusiness.com W hen a top executive resigns without explanation, rumors begin to fly at most companies. But in the weeks following Marcus Lanznar's resignation from Hartford- based healthcare technology firm CareCentrix, the water-cooler rumors took on a particularly urgent tone. Lanznar, formerly associate vice president at CareCentrix for new strategies and products, had gone to work for what the company considered a direct competitor, Signify Health, which has its principal executive office in Norwalk. Lanznar left CareCentrix on Nov. 6, 2020, declining to detail his future plans to his bosses. CareCentrix filed a lawsuit a month later, in the federal district court in Delaware, alleging the former VP violated numerous non- compete agreements and shared confidential trade secrets with a competitor. "CareCentrix has recently discovered that Lanznar transmitted trade secret and confidential information to his personal email account in the months prior to his separation from the company," the complaint alleges. "The commercial dangers and injury are quite stark. … [Lanznar] had access and knowledge of virtually every piece of sensitive product information at CareCentrix." Signify Health said it disputes the lawsuit's claims and intends to "vigorously defend against" it, but wouldn't comment further. Many companies quickly settle complaints like CareCentrix's lawsuit, but litigation was ongoing as of press time. The next hearing on a preliminary injunction in the case is scheduled for July 28. Hot sector sparks moves In addition to the strong language and blunt allegations of wrongdoing, the lawsuit is notable in that it shines a light on the fast- growing healthtech sector. With more startups forming and moving toward IPOs, the competition for talent is hotter than ever. CareCentrix uses data analytics to help patients determine the best site for post-acute care, among other care coordination services it provides. Operating out of the Stilts Building at 20 Church St., CareCentrix made news in recent years for acquiring a palliative care company and applying machine learning and artificial intelligence to optimize post-acute care. In 2016, CareCentrix reached a record $1.4 billion in revenue, the Hartford Business Journal reported at the time. It was also a recipient of state funding under former Gov. Dannel P. Malloy's First Five economic incentives program. The privately-held company is led by CEO John Driscoll. Signify offers a value-based care platform that employs advanced analytics, technology and a nationwide provider network to create and support payment programs that aim to move hospitals and doctor practices away from the costly fee- for-service business model in favor of contracts that provide incentives to keep patients healthy. Signify Health employs over 2,000 people, including about 110 in Norwalk, and posted $610.6 million in revenue in fiscal 2020. In a sign of the healthcare technology sector's appeal, Signify raised $564 million in an IPO in February initially expected to top out at $100 million. Do the companies' businesses overlap? Absolutely, CareCentrix argues in its complaint. Lanznar had access to information including financial data, business plans, product specifications and even a 2020 competitive SWOT analysis on CareCentrix's main competitors — including Signify. Lanznar sent emails containing proprietary information to Signify using his CareCentrix work email address, the complaint alleges. "This case is not about a theft of trade secrets. There was none. It is about an attempt by CareCentrix to try to stifle what it perceives to be a potential competitor," Signify argued in an answering brief. Signify's products overlap with CareCentrix's only in limited areas, the company said, adding that the Hartford company's lawsuit was likely motivated in part by jealousy over the company's blockbuster IPO. Lanznar has been placed on administrative leave pending the resolution of the case, Signify said. Non-competes under scrutiny Restrictive covenants in employment — which prevent workers from competing against CT healthtech companies CareCentrix, Signify Health in bitter legal dispute over trade secrets Jonathan B. Orleans CareCentrix CEO John Driscoll in his downtown Hartford office. PHOTO | COSTAR Signify Health has its executive office in Norwalk at 800 Connecticut Ave, (shown above). PHOTO | CONTRIBUTED

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