Facts

Plaintiff Steven Babyak worked for a medical device company, Cardiovascular Systems Inc., from 2012 until June 2015. Plaintiff sued his former employer for whistleblower retaliation and wrongful termination.

PLAINTIFF'S CONTENTIONS:
Plaintiff claimed he was terminated after reporting what he reasonably believed were serious violations of the law, such as off-label promotion, illegal kickbacks to doctors and ongoing violations of the Sarbanes Oxley Act.

Plaintiff was the top sales manager at the company at the time of his termination. After he reported suspected violations of the law to upper management, including the Vice President of Human Resources and legal counsel for defendant, plaintiff claimed he became persona non grata. His new supervisor was irritated by his complaints regarding violations of the Sarbanes Oxley Act and illegal kickbacks and told him to stop complaining. His quota increased by 41 percent, territories were drastically changed and he ultimately was terminated under pretext reasons.

DEFENDANT'S CONTENTIONS:
Defense claimed that during the time of the events, which the trial concerned, the company was growing rapidly and the sales force was substantially expanding. This resulted in changes to sales territories and quotas throughout the country, which upset a number of salespeople, including plaintiff, admittedly because it might adversely affect their compensation. As these changes were taking place, plaintiff began complaining about a variety of alleged improper activities at the company.

Defense contended that each of plaintiff's complaints was taken seriously, investigated and addressed. Plaintiff was unwilling to accept the results of those investigations and focus on his work, and the situation came to a head in a meeting at headquarters where plaintiff yelled and cursed at his supervisor while pounding the table in front of officers of the company. Rather than terminate plaintiff for his behavior, as many employers would likely have done, the company reassigned plaintiff to report directly to the SVP of Sales on an interim basis to see if the situation could be salvaged. After two months, this reporting relationship proved unworkable and the company could identify no other way to effectively manage plaintiff within its changing sales structure and so reluctantly made the decision to terminate him.

Settlement Discussions

According to plaintiff, defendant's CCP 998 pre-trial offer $275,000 was rejected by plaintiff. Plaintiff's final pre-trial demand of $1.5 million was rejected by defendant. According to defense, defendants CCP 998 was for $275,000, plus reasonable attorney fees to date (which, at the time, immediately before trial, were likely significant and may have exceeded the stated monetary component of the offer). A formal demand of $1.5 million was never conveyed to defense. Pretrial settlement discussions were held through a mediator and defendant was never given a formal demand below $2.7 million, which is why, according to defense, they decided to try the case.

Damages

Plaintiff suffered $2.7 million in past and future lost earnings.

Result

The jury found in favor of plaintiff and awarded him $25,142,120, which included $2,742,120 in compensatory damages and $22,400,000 in punitive damages.

Other Information

FILING DATE: Nov. 16, 2015.