A whistleblower who claimed his employer Cardiovascular Systems Inc. (CSI) retaliated against him for complaining of an illegal kickback scheme has been awarded more than $25 million by a Los Angeles Superior Court jury.
Steven Babyak, a regional sales manager for Minnesota-based CSI in the Southwest, sued his former employer for violation of whistleblower protections and wrongful termination after he was fired without warning on June 1, 2015. CSI manufactures and markets medical devices for the treatment of cardiovascular diseases.
According to the StarTribune, Mr. Babyak claims in his lawsuit that his supervisor, area sales director Todd Goldberg, introduced a news sales strategy he called the “Triangle Offense.”
The plan involved CSI reps obtaining “patient information through their relationships with referring providers,” the StarTribune reported. “The sales reps would then go to their network of surgeons, promising a connection with these providers and patients, but only if the surgeons agreed to use CSI’s device.”
Mr. Babyak raised his concerns about the scheme to Mr. Goldberg, CSI lawyers, and the human resources department multiple times. The company eventually investigated the claims, even interviewing other representatives on Mr. Babyak’s team who claimed Mr. Goldberg was retaliating against them. But the company wrapped up the investigation with no finding of retaliation and conclusion that the complaint lacked merit.
After denying wrongdoing had occurred and dismissing the complaint, CSI then issued Mr. Goldberg a warning for improperly engaging with health care professionals and intimidating sales reps under his supervision.
Mr. Babyak alleges CSI transferred him to another supervisor, increased his required sales quota, and diminished his geographic territory. CSI ultimately fired him without warning but never gave him any verbal or written warnings.
The Los Angeles jury awarded Mr. Babyak $2.7 million for past and future loss of earnings and $22.4 million in punitive damages.
CSI disputes the allegations and says it is “committed to ethical business practices.” The company plans to appeal the California ruling.
Less than a year ago, CSI paid $9 million to settle a similar case brought by a whistleblower under the federal False Claims Act alleging it paid illegal kickbacks to physicians to coax them to use the company’s medical devices.