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June 28, 2016

Ex-Zimmer Sales Rep Says Whistleblowing Got Him Canned

This article originally ran in Law360 on June 28, 2016.


A former Zimmer Biomet Inc. sales representative filed a $15 million suit in Pennsylvania federal court on Tuesday, contending that the medical device company fired him after he gave grand jury testimony about a doctor who was allegedly performing unnecessary procedures.


Dominick Pistone’s complaint says that he was merely following Zimmer’s code of conduct when he reported and later testified against an Allentown, Pennsylvania, orthopedic surgeon who was performing unnecessary knee replacements with a product that hadn’t received U.S. Food and Drug Administration approval, only to be retaliated against and ultimately fired for speaking out about the physician and his medical practice.


“On June 15, 2015, Zimmer terminated Pistone’s employment in retaliation for his whistleblowing activities (including his providing testimony before a grand jury) regarding what he reasonably believed to be illegal conduct by Company Y, one of Zimmer’s largest customers, and one of Company Y’s doctors, Dr. X,” the complaint says.


Pistone doesn’t name Dr. X or Company Y because of fear of further retaliation, according to the complaint.


During Pistone’s 25 years at Zimmer, he received a number of awards and moved up through the ranks, starting as a trauma consultant in late 1989 and working his way up to head a five-person sales team in 2012, according to the complaint.


In 2007, Zimmer instituted a new code of conduct that set out compliance and reporting guidelines in light of an agreement with then-U.S. Attorney for the District of New Jersey Chris Christie over alleged violations of the federal anti-kickback statute, Pistone contends.


That year, Pistone realized Dr. X was performing far more than the average number of double knee replacements using the OtisKnee, which wasn’t FDA-approved at the time and was later denied approval altogether, he says.


After getting his supervisor’s permission, Pistone went to the FBI with his concerns, asking to remain anonymous, the complaint contends. However, the FBI agent he spoke to said that nothing further could be done if Pistone wasn’t willing to give his name, so the matter stalled, according to the complaint.


Following a speech that Christie made at a Zimmer sales meeting after becoming New Jersey governor, Pistone says that he was inspired to renew his whistleblowing efforts. Between 2008 and 2012, he made multiple attempts to report Dr. X’s activities, which allegedly continued after the doctor joined Company Y, the complaint alleges.


Finally, in February 2015, Pistone received a subpoena to appear before a grand jury, he says. He testified after getting approval from Zimmer management, according to the complaint.


In late May 2015, a Zimmer in-house attorney told Pistone that Company Y and its CEO were threatening to sue because of an anonymous letter he had written about the alleged misconduct, chastising him over how much the litigation would cost, the complaint says. Later that day, he was informed that Company Y had suspended both him and his son — who was on his sales team — from working the account.


Zimmer suspended Pistone without pay the next day and ultimately fired him in mid-June, offering less than a year’s severance in an agreement that required him to return the payment if it was later discovered that he had failed to disclose violations of the law or the code of conduct during his time at the company, the complaint says.


“The hypocrisy of this statement is inexplicable and mind-boggling: Zimmer fired Pistone because he did exactly what that clause indicated he was supposed to do — disclose violations of applicable law and/or Zimmer’s code of conduct,” the complaint alleges.


Pistone requests compensatory damages of no less than $5 million and punitive damages of no less than $10 million for allegations of wrongful discharge, slander per se and intentional infliction of emotional distress.


Representatives for the parties didn’t immediately return request for comment on Tuesday.

Pistone is represented by John E. Riley and Kevin D. Kent of Conrad O’Brien PC, and Donald Kravet of Kaplan Kravet & Vogel PC.


Counsel information for Zimmer wasn’t immediately available on Tuesday.


The suit is Dominick Pistone v. Zimmer Biomet Inc., suit number 5:16-cv-03526, in the U.S. District Court for the Eastern District of Pennsylvania.


--Editing by Stephen Berg.


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