Flatiron Health, Inc. v. Tempus, Inc., 1:19-cv-08999

Background

Flatiron sued former senior medical director Dr. Kenneth Carson seeking a declaratory judgment and permanent injunction enforcing a one-year post‑employment non‑compete and Flatiron’s nondisclosure obligations after Carson accepted a Tempus offer; bench trial held and Court issued judgment denying the employment‑bar relief but upholding the nondisclosure clause.
Carson joined Flatiron in 2016 working on Real‑World Evidence (RWE) products for biopharma (curation, aggregation, and population‑level analytics); he had prior Ph.D. training in data methods and continued limited clinical practice.
Tempus recruited Carson for a Vice President of Clinical Solutions role focused on helping physicians interpret Tempus patient‑specific lab/genomic reports (dissemination and implementation work), not on curating or analyzing EHR‑derived data for pharmaceutical clients.
Tempus and Carson, with counsel, limited his Tempus duties, conditioned his hire on a certification prohibiting use/disclosure of Flatiron confidential information, and restricted access to Tempus real‑world datasets.
The Covenants Agreement’s non‑compete defined a “Competing Business” and barred broadly any activity “similar to” Flatiron’s businesses for one year; the Court found those restraints facially overbroad, vague, and not narrowly tailored to Flatiron’s legitimate interests.
The Court found some categories of Flatiron technical and business information could be trade secrets but concluded Flatiron failed to show inevitable disclosure or irreparable harm from Carson’s Tempus role; therefore no injunction issued, but the nondisclosure provision remains enforceable.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of non‑compete (breadth / legitimate interest)	Flatiron: one‑year restriction protects trade secrets, customers, and business lines; applies to Tempus hire.	Carson: covenant is facially overbroad/vague ("similar to" and "Competing Business") and not narrowly tailored to protect legitimate interests.	Court: Non‑compete is broader than necessary and unenforceable; restricts areas where Flatiron has no legitimate interest.
Anticipatory repudiation (accepting Tempus offer)	Flatiron: Carson’s acceptance of Tempus constituted a positive unequivocal repudiation of the Covenant.	Carson: No repudiation because the covenant is unenforceable and his Tempus role was carved to avoid overlap.	Court: No anticipatory repudiation — non‑compete unenforceable in these circumstances.
Trade secrets / inevitable disclosure / irreparable harm	Flatiron: Carson knows Flatiron’s curation, CGDB, pricing, and client plans; his Tempus role could lead to inevitable disclosure requiring injunction.	Carson/Tempus: Role differs materially (physician‑facing dissemination), access limited, contractual and practical safeguards in place; disclosure not inevitable.	Court: Some information qualifies as trade secrets, but Flatiron failed to show inevitable disclosure or irreparable harm; injunction denied.
Severability / partial enforcement of overbroad covenant	Flatiron: If overbroad, court should partially enforce narrower restraints (e.g., solicitation limits).	Carson: Covenant was a condition of initial employment and was broadly imposed on all employees — partial enforcement would reward overreaching.	Court: Declined partial enforcement given employer‑drafted, facially overbroad covenant and absence of good‑faith tailoring; nondisclosure clause, however, remains enforceable.

Key Cases Cited

BDO Seidman v. Hirshberg, 712 N.E.2d 1220 (N.Y. 1999) (sets multi‑factor test for enforceability of employee non‑competes and discusses partial enforcement/severance concerns)
Columbia Ribbon & Carbon Mfg. Co. v. A‑1‑A Corp., 369 N.E.2d 4 (N.Y. 1977) (rejects broad restraints that lack limitations tied to trade secrets or unfair competition)
Brown & Brown, Inc. v. Johnson, 25 N.E.3d 357 (N.Y. 2015) (addresses when courts may partially enforce overbroad restrictive covenants and focuses on employer conduct in imposing covenants)
Princes Point LLC v. Muss Dev. LLC, 87 N.E.3d 121 (N.Y. 2017) (defines anticipatory repudiation standard under New York law)
Karpinski v. Ingrasci, 268 N.E.2d 751 (N.Y. 1971) (principle that restraining a person from practicing a profession for which trained can be unreasonable)
Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F. Supp. 2d 489 (S.D.N.Y. 2011) (discusses irreparable harm standard and uniqueness of employee’s services)
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (U.S. 2006) (four‑factor test for permanent injunctions)