The Delaware Chancery Court entered summary judgement in favor of Alphatec and its chairman and CEO Pat Miles.
Seven things to know:
1. NuVasive claimed Mr. Miles — former president, COO and vice chairman at NuVasive — violated the non-compete in his contract with NuVasive when he left the company and joined Alphatec. The company sued Mr. Miles on Oct. 10, 2017.
2. Mr. Miles spent 17 years in several leadership and product development roles with NuVasive. While employed by NuVasive and serving on its board member, Mr. Miles negotiated an offer from Alphatec to serve as executive chairman.
3. Mr. Miles, of NuVasive, notified the company of his resignation Oct. 1, 2017 and informed them that he would not honor his contractual commitments to refrain from:
- Working as a competitor
- Soliciting NuVasive customers
- Recruiting NuVasive employees
He joined Alphatec as executive chairman the following day and became CEO March 9, 2018.
4. In March 2017, Mr. Miles completed a securities purchase agreement of $500,000 of Alphatec stock in a private placement and didn't disclose himself as the beneficial owner, according to the complaint. Alphatec granted him 1 million restricted stock units valued at $3.2 million, and he purchased 1.3 million shares at $2.26 per share, representing a $2.9 million investment. He also received warrants to purchase an additional 1.3 million shares upon closing.
Mr. Miles' equity investment in NuVasive appreciated over 40 percent on the day he was hired by Alphatec.
5. Alphatec and Mr. Miles denied wrongdoing and claimed NuVasive's post-employment restrictions were void under law. The court rejected NuVasive's claims of non-competition and employee non-solicitation against Alphatec and Mr. Miles.
6. In a June opinion, the Delaware Court ruled in favor of the defendants, finding that the post-employment non-compete restrictions were contrary to "California's strong public policy interest against noncompetes."
7. On Aug. 26 the court doubled down on its opinion, stating that NuVasive's "employee non-solicitation covenants are a restraint of trade in violation of California fundamental policy." All non-competition and non-solicitation claims were ended following the court's summary judgement.