Jilted vendor claims trade-secrets disclosure in UCHealth contract talks

A food service vendor for multiple UCHealth hospitals has sued the organization, and a food service competitor, alleging breach of contract and disclosure of trade secrets.

In a lawsuit filed Dec. 1, California-based Integrated Support Solutions Inc. alleged that UCHealth facilities in Broomfield, Colorado Springs and Highlands Ranch — along with the University of Colorado Hospital Authority — misled ISSI and caused it to disclose trade secrets including staffing plans, pay levels, cost structure, profit margins and more, all of which ISSI contends were protected by existing contracts.

ISSI also claims that competitor Sodexo Inc., a French company with U.S. headquarters in  Maryland, should have known that the material was protected trade secrets but used it anyway in its effort to wrest away ISSI’s contracts.

SPONSORED CONTENT

Business Cares: June 2024

BizWest Business Cares June 2024 recognizes LGBTQ+ businesses and the Colorado LGBTQ Chamber of Commerce.

Neither UCHealth nor Sodexo responded to requests for comment on the lawsuit.

ISSI had contracts with three of UCHealth’s 12 hospitals, including the Broomfield hospital, to provide food services and other services. Sodexo had contracts to provide similar services to four UCHealth hospitals, and UCHealth managed the remainder internally. 

UCHealth sought to negotiate contracts for future services and began a request-for-proposals process in October 2019, according to the lawsuit.

During the process, ISSI alleged, it learned that UCHealth may have already decided on where to award the future contracts but was assured by UCHealth executives as late as November 2020 that was not the case. UCHealth sought additional financial and operational information from ISSI, which it provided.

ISSI later learned that a decision had been made in September 2020. The company alleges in the lawsuit that instead of supplying information in hopes of new contracts that UCHealth was gathering detailed information in order to negotiate better terms from Sodexo.

In December 2020, detailed information that ISSI maintains was confidential was displayed at a vendor’s meeting and later shared with Sodexo. Sodexo’s information was not displayed at that meeting.

ISSI said in the lawsuit that existing contracts it had with UCHealth required the hospital organization to treat the information as confidential.

ISSI seeks damages for breach of contract, misappropriation of trade secrets, violation of the Defend Trade Secrets Act and fraud. The trade-secrets claims also apply to Sodexo.

The case is Integrated Support Solutions Inc. v. UCHealth Grandview, UCHealth Broomfield, UCHealth Highlands Ranch, University of Colorado Hospital Authority, and Sodexo Inc., case number 21-cv-03225.

© 2021 BizWest Media LLC