Allscripts Healthcare Solutions is suing startup Andor Health and its founder, Raj Toleti, alleging they breached numerous contracts and misappropriated trade secrets.
Allscripts on Monday accused Orlando, Fla.-based Andor Health and Toleti, a former Allscripts executive who was appointed Andor Health's chairman and CEO last year, as well as another company Toleti founded, called Mahathi Software, and another former Allscripts employee, Amar Bulsara, of violating confidentiality, non-disclosure, non-solicitation and non-compete provisions of various contracts.
Allscripts, which is based in Chicago, filed the lawsuit in a Delaware federal court.
Andor Health, a startup that sells software tools that connect and send information to care teams and patients, was founded in 2018. Since then, it's attracted investment from Microsoft Corp.'s venture capital arm M12 and struck an agreement with the National Institutes of Health amid the COVID-19 pandemic.
Andor Health did not immediately respond to a request for comment on the lawsuit.
Allscripts does not comment on pending litigation as company policy, a spokesperson told Modern Healthcare via email.
Allscripts in 2018 acquired HealthGrid, a patient engagement company founded and led by Toleti, which Allscripts planned to bring into its patient portal and engagement tool FollowMyHealth. As part of the acquisition, Allscripts employed Toleti as senior vice president and general manager of Allscripts' Health Grid unit. Bulsara, an employee of Health Grid, also joined Allscripts as a director of professional services.
Both Toleti and Bulsara signed inventions restrictive covenant agreements when they joined the company, according to Allscripts. When Toleti resigned from Allscripts last year, he entered into a settlement agreement with Andor Health, Mahathi Software and Allscripts, according to Allscripts.
Since then, "Allscripts discovered that Toleti, Andor and Bulsara were willfully and wantonly disregarding their non-solicit, non-compete and confidentiality obligations" included in the HealthGrid merger, inventions restrictive covenant and other agreements, according to the complaint.
That includes Andor selling new patient engagement, mobile patient experience and telehealth tools that allegedly compete with FollowMyHealth and HealthGrid to Allscripts' customers.
Under the HealthGrid merger agreement, Toleti was allegedly barred from engaging in "competitive business" for four years following the merger's 2018 closing, according to Allscripts' complaint. They also allegedly agreed that restricted people, including Toleti, would not solicit any of Allscripts' customers during that period.
Allscripts also alleged that Andor's user interface for its product is "nearly identical" to FollowMyHealth, and accused Mahathi Software of abusing its access to Allscripts' coding and intellectual property as part of services Mahathi Software provides to Allscripts customers and allegedly stealing such intellectual property, which Allscripts says Andor has integrated into its products.
According to the complaint, Andor also asked Allscripts to allow Andor to hire Bulsara and engage services of other former Allscripts employees, which Allscripts rejected. However, Allscripts alleged that Andor still engaged the services of Bulsara, who is now a consultant and no longer works at Allscripts.
Allscripts said it has told Andor and Toleti to stop violating the contracts and sent a cease-and-desist letter. But Andor Health and Toleti have denied engaging in misconduct, according to the complaint.
"The full extent of defendants' improper solicitation, competition, misuse and misappropriation of Allscripts' confidential information and trade secrets, interference with Allscripts' prospective economic advantage, disparagement of Allscripts' brand and services, and theft of Allscripts' intellectual property, along with the full extent of the damages those activities have caused, is only known to defendants at this time," the complaint reads. "Discovery will uncover the full scope and extent of the misconduct and harm."
Allscripts in its complaint said it's asking the court to award damages and order Andor to stop its alleged violation of non-compete and non-solicitation obligations, stop its alleged use of Allscripts' confidential information and trade secrets, and to stop its alleged interference with Allscripts' business relationships with customers.