Judge Awards Medical Devices Company $923,743 After Another Company Improperly Hired Away Its Former Heart Valve Salesman.(Sulzer Carbomedics Inc.)(Brief Article)

Doug Clark was the sole shareholder of two corporations through which he had conducted a business selling medical devices, Oregon Cardio-Devices, Inc. ("OCD") and Northwest Cardio-Devices, Inc. ("NCD").

In 1996, Clark entered into two agreements with Sulzer Carbomedics to sell Carbomedics's heart valves. One agreement covered Oregon and a small part of the state of Washington ("Oregon contract"), and the other covered other parts of the state of Washington ("Washington contract"). For a term of four years, those contracts gave Clark the exclusive right to sell Carbomedics's heart valves in the covered regions, and made Clark exclusive to Carbomedics, subject to termination provisions in the two contracts. That right of termination was "absolute," and provided that a "party availing itself of such right will not be liable to the other party for any loss, damage, indemnity, cost, expense, or thing of any kind or nature whatsoever, and any and all claims of such liability and the right to make such claims are . . . expressly waived."

The contracts further stated: "In no event will either party be liable to the other for incidental, special or consequential damages, including but not limited to loss of anticipated revenues or profits or good will, for the [lawful] termination or cancellation of this Agreement for any reason whatsoever."

The contracts also contained non-compete clauses. For one year after his relationship with Carbomedics ended, for any reason, the contracts prohibited Clark and his subrepresentatives from contacting former customers for "purposes of selling, offering for sale or promoting the sale" of any competing heart valves.

In the fall of 1997, Clark communicated with St. Jude Medical, Inc. and St. Jude Medical S.C., another seller of heart valves. Clark met with St. Jude's top executives to discuss his becoming a St. Jude sales representative. At the end of 1997, Clark entered into five agreements with St. Jude. Two of these contracts, both effective January 1, 1998, involved the sale of St. Jude's medical devices. One contract was for the sale of St. Jude's pacemakers in Oregon and the other was for the sale of St. Jude's heart valves in eight designated hospitals and medical centers in Oregon.

Under the heart valve contract, Clark was not eligible for commissions for two years. However, Clark and St. Jude entered into a separate agreement guaranteeing Clark a minimum commission of $ 815,000 annually for the first two years, under both of the St. Jude ...