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Celera Lab Subsidiary in Settlement Talks with HDL, Former Employees

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Celera said Friday evening that it is in settlement talks with Health Diagnostic Laboratory and several former employees of Celera subsidiary Berkeley HeartLab, who have been named as defendants in a suit filed last month.

BHL filed the suit in the US District Court for the Eastern District of Virginia in mid-January alleging that HDL and the former Berkeley employees — who resigned en masse from Berkeley on Jan. 1, 2010, and subsequently began working for HDL directly or indirectly — had been "successfully soliciting BHL's client healthcare providers to refer their patients to HDL."

According to the filing, the employees named in the suit were responsible for nearly 35 percent of BHL's total sample volume in 2009. In the first full week of 2010, the sales regions covered by the former employees fell around 38 percent from the prior year weekly average.

Among the individual defendants named in the suit are G. Russell Warnick, BHL's former SVP of lab operations and chief scientific officer, and Tonya Mallory, formerly senior manager of lab operations. Those two co-founded HDL, based in Richmond, Va., in October 2008, with Mallory serving as president and CEO of the firm and Warnick serving as CSO. In addition, five former BHL sales representatives, who all resigned on Jan. 1 and later began working for HDL, were named as defendants.

BHL alleges in the suit that starting in October 2009, and possibly before, HDL had "conspired with others to injure BHL and its business by stealing clients, employees, property, and confidential and proprietary information." The suit further alleges that the former employees also "conspired to steal BHL's proprietary information regarding its '4myheart' program to further HDL's business."

Celera released a statement on Friday evening saying that the court had issued a temporary restraining order that restricted the sales representative defendants from soliciting certain BHL physician clients and imposed restrictions on HDL from soliciting BHL employees for employment. That restraining order has since been replaced by a consent order agreed to by the parties that remains in effect until trial, which is scheduled for May 10-12, 2010.

Celera also noted that BHL and the defendants have been in mediation and are continuing to assess a possible settlement.

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