Omeros, one of Seattle’s biggest biotech companies, is in the midst of a contentious legal battle with its former chief business and commercial officer, whom the company alleges violated his non-compete agreement when he left for a Boston-area company that is developing a potentially competing drug.
The company sued Leonard Blum last month, aiming to block the executive from working at EyePoint Pharmaceuticals in Watertown, Mass. This week, Blum fired back with a counter-claim, alleging the company never paid annual bonuses he claimed to have earned while working at Omeros.
Omeros alleges in its lawsuit that DEXYCU, a therapy EyePoint is developing that replaces eye drops meant to treat inflammation associated with cataract surgery, is competitive with Omeros’ only commercial drug, OMIDRIA.
During Blum’s resignation, Omeros alleges, he said he would not be able to abide by the terms of his non-compete. The company worries that Blum will try to peel off its customers, recruit employees to work at EyePoint and divulge confidential information, all things Omeros claims would violate his non-compete.
“During his resignation, Blum indicated that he would not directly solicit Omeros employees for one year, but later explicitly reserved the possibility of hiring Omeros’ employees and did not otherwise commit that he would not induce, recruit or encourage Omeros’ commercial employees or consultants to terminate their relationship with Omeros. Because he denies that the OMIDRIA and DEXYCU products are competitive, Blum also did not commit to abide by his obligation to not solicit any licensor, customer or licensee of Omeros.”
Blum joined Omeros in May 2016, and left two years later. He has more than 30 years of executive and management experience in the pharmaceutical industry, working at companies like Theravance and Merck Co, and he founded his own company that later sold to Eli Lilly and Co.
In his counterclaim, Blum said his offer letter included possible 25 percent annual incentive bonus and up to a $150,000 sales bonus. Blum claims he met the criteria for the annual bonus program, and the company never set targets for the sales bonus.
Blum went on to allege that Omeros has a history of withholding bonuses and omitted that during recruitment, which he claims consitutes fraud.
“During the recruitment process leading up to the time that the counter-plaintiff executed the offer letter, no one from Omeros told him that Omeros had a history of holding bonus payments beyond a reasonable period based on commercial practice — in some instances, multiple years.”
Omeros and Blum did not return requests for comment.
At the time Blum joined Omeros CEO Gregory Demopulos said in a statement that: “Leonard brings valuable experience and a proven track record in leading commercial organizations and driving sales – all of which we expect will be assets to Omeros as we continue to accelerate our OMIDRIA revenue growth. We also expect that Leonard will add significant value in the strategic partnering of one or more of our development programs.”
When he joined the company, Blum signed Omeros’ Proprietary Information and Inventions Agreement, which included non-compete provisions. It is written into Blum’s non-compete agreement that violations entitle the company to seek “extraordinary relief” in court, including restraining orders and injunctions.
“Monetary damages are insufficient to remedy Defendant’s wrongful conduct because, unless Defendant’s employment with EyePoint is enjoined, Defendant will utilize and misappropriate Omeros’ proprietary information, solicit employees or consultants of Omeros, and/or unlawfully compete, all in violation of the provisions of the PIIA.”
Blum is seeking damages for alleged breach of contract and withholding of bonuses and wages.
Non-compete clauses have become a hot topic in the tech industry, with proponents claiming they are necessary to protect valuable trade secrets and critics arguing they hinder worker mobility and startup activity. Washington state, which has seen a couple of recent high profile non-compete lawsuits, has attempted several times in recent years to pass a law banning non-competes, though those efforts have come up short.
Here is the full lawsuit and Blum’s counter-claim:
Omeros v. Blum by Nat Levy on Scribd
Blum counter-claim by Nat Levy on Scribd