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Celera Signs $7M Settlement Agreement with HDL, Former Employees

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Celera said after the close of the market Thursday that it had reached a settlement agreement with Health Diagnostic Laboratory and other defendants in a suit that the firm's Berkeley HeartLab filed in January.

Celera said that under the settlement — which was reached with HDL, Blue Wave Healthcare Consultants, and seven former employees of Berkeley HeartLab — it will receive at least $7 million. The defendants have agreed to pay Celera $3.8 million in 2010, $3.2 million in 2011, and an additional amount in 2011 based on samples HDL receives during 2010 from an agreed upon set of healthcare providers.

Berkeley 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 Berkeley'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, said Celera.

In addition to the payments, the settlement prohibits the defendants in the litigation, until an agreed upon date during the first quarter of 2011, from performing lab testing services for healthcare providers that were BHL customers during the latter half of 2009. The restrictions do not apply, however, to the agreed upon set of healthcare providers referenced in the settlement. In addition, HDL, Blue Wave, and the former BHL employees named in the litigation also are prohibited from soliciting or hiring BHL employees for a defined period, subject to certain agreed upon exceptions.

Celera said that it intends to record all payments from HDL as a separate line item under "legal settlements" in the periods when received, and these amounts will be excluded from its non-GAAP earnings.