Anthem sues former executive over trade secrets

  • Comments
  • Print

Indianapolis-based health insurer Anthem Inc. is suing a former executive, claiming he stole trade secrets, went to work for a direct competitor, and breached a contract involving restricted stock agreements.

Anthem filed suit this month in U.S. District Court against Chad Piper, who served as president of the company’s Healthy Blue Nebraska Medicaid program.

According to the suit, Piper resigned from Anthem last November to accept a job as president at a competing insurer, CareSource, which was bidding for an Iowa Medicaid program in direct competition with Anthem.

At the time, CareSource did not have a Medicaid contract in Iowa. Anthem was one of only two Medicaid plans that participated in the state’s managed care program, Health Link.

The suit said Piper joined CareSource only after obtaining highly confidential insider information about Anthem’s bid strategy and extensive confidential information about Anthem’s approach for the Iowa bid.

Just weeks before submitting his resignation, the lawsuit alleges, Piper attended a “critical strategic planning review,” where Anthem officials provided detailed information about Iowa’s operational metrics and its strategy for that state’s Medicaid bid.

Anthem said Piper flagrantly violated his obligations to obtain an unfair advantage over Anthem for the Iowa state contract, which it said was worth billions of dollars.

“Piper apparently saw that Anthem’s generosity in preparing him for the upcoming Nebraska rebid provided him with a unique opportunity to take the playbook Anthem shared with him and use it to secure a position with a competing Iowa plan,” the lawsuit said.

Piper, who lives in Indianola, Iowa, could not be reached immediately for comment. His lawyer has yet to file a response in the court docket.

The suit claims that over several weeks Piper forwarded a number of Anthem documents to himself, including confidential and proprietary information “that would be extremely helpful in preparing a response” to the Iowa bid, the suit said.

One of the documents was a 74-page “Iowa Health Needs Assessment” prepared by Anthem, which contained a high-level summary of the assessment and competitive intelligence about other companies likely to submit bids for the Iowa Medicaid contracts, including CareSource, the suit said.

Anthem said it awarded Piper restricted stock agreements worth hundreds of thousands of dollars, which contained restrictions on his ability to use Anthem’s confidential information, to compete against Anthem and to solicit Anthem’s customers, providers and employees.

Piper joined Anthem through a corporate transaction in 2020, when the Indianapolis-based company acquired WellCare of Nebraska from its parent company, WellCare Health Plans Inc.

Anthem is one of the largest U.S. health insurers, with more than 45 million members, behind only leader UnitedHealthcare, based in suburban Minneapolis. Anthem is the largest public company in Indianapolis, with 2021 revenue of $136.9 billion.

In January 2021, Anthem promoted Piper to regional vice president of operations for Healthy Blue Nebraska. In May 2021, Anthem promoted Piper again, to president of the Nebraska operation.

On Nov. 23, 2021, Piper submitted his resignation, saying he had been solicited for a job opportunity with a competitor, which he did not name.

“It is located in a separate state for which I have no confidential information, no direct Anthem operational knowledge or oversight, nor any known trade secrets,” he wrote.

He added: “While it is a risky venture for me, it also affords me a sizable increase in benefits and salary when compared to my current compensation.”

Anthem countered in its suit that Piper had received “extensive confidential information” about the company’s Iowa operations, bid strategy, strengths and competitive concerns, and other highly confidential and economically valuable information.

Anthem terminated Piper’s employment on Nov. 30, 2021.

“Piper has intentionally misled Anthem regarding the circumstances of his separation, his retention of trade secrets and other confidential information, and his compliance with his non-competition and non-solicitation obligations,” the suit said.

Anthem is seeking a preliminary and permanent injunction against Piper from misappropriating or disclosing Anthem’s confidential information and trade secrets, and from involving himself in the Iowa bid process, along with unspecified compensatory damages.

The case was assigned to Judge James R. Sweeney II.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.