Wednesday, April 6, 2011

Raiders of the Lost Ark

Indiana Jones would be proud. As many of our bloggers reported, Stryker is suing Zimmer Spine after the new Indiana Jones of the spine industry, Paul Graveline allegedly poached their sales force.  Thank you fellow bloggers.  Just like Indy, Graveline was probably hired to excavate the spine world's Ark of the Covenant, immediate gratification, instantaneous revenue, a real shining star, a feather in his brown Stetson Fedora.  The most entertaining aspect of the suit is that Stryker alleges that it stands to lose millions of dollars of sales as a result.  But here's the irony of this action.

Many years ago Stryker  set the precedent for this type of activity, by raiding the employment ranks of Smith and Nephew, Howmedica, Synthes, and Biomet.  But the plot thickens as one reads that Stryker is accusing Zimmer of "willfully and maliciously" targeting Stryker employees to establish a spine related products division, (does Zimmer have a spine division, or at least an imitation of one?) without expending any effort to build it.  So look at whom is calling the kettle black?  Stryker infamous for its twenty percent growth, the darlings of the Street, known for increasing its market share in their orthopaedic and spine divisions by acquiring other company's people and technology is now going to sue Zimmer.

As for claiming that these former employees will be stealing confidential and proprietary information to unfairly compete is ludicrous at best.  What's so proprietary about Stryker's spine portfolio.  They rarely if ever have created a product from concept, and when they did they couldn't even file it properly. They acquired Dimso to catapult themselves into the spine arena, they acquired the licensing rights to OP-1 from Curis, they acquired Surgical Dynamics and the rights to Theken's products, only to screw the pooch on that deal, in addition to other acquisitions that took place in reconstruction and trauma.  What proprietary secrets?

As for targeting Stryker customers, let's get serious.  For all the spouting off on this blogs site that it comes down to relationships, weren't these relationships fostered by the distributors/sales people?   The only reason doc's get involved in any company's venture is because they are interested in getting paid for their intellectual property, i.e. their knowledge.   Most of them cannot stand the stiff suits.  To accuse Zimmer of devising a scheme to create an instantly successful spine division is laughable at best.   Even with this raid, Zimmer is a spine company operating with one hand tied behind their back.  As for a corporation stating that these employees breached their fiduciary duty to the company, that's laughable at best, considering there isn't a company in spine that operates in a respectful manner.  You're a piece of meat, and once you become expendable you're gone.

Graveline does bring a "fresh new approach" to Zimmer, one that Zimmer never really tried before.  He is using the same old tricks that were taught to him by his mentor, Stryker, offering huge signing bonuses and guarantees at least for a short period of time.  So in closing fellow bloggers, remember the old expression, misery loves company.  Yes, Stryker will flex its financial and legal muscle against Zimmer, and, it will be interesting to see the Zimmer Board of Directors reaction in the long run if this little plot doesn't unfold as planned.  The bigger question is, if Stryker wins the suit, could this be Double D's death knell?  Yes, fellow bloggers, this is how we build revenue in a zero-sum market.  No longer do company's create innovative technologies, today, the trend is to identify distributors and sales people that can bring immediate revenue wishing for the a shooting star, a meteor as it enters the spine atmosphere only to burn out before it hits the ground.  If there ever was a self-immolating industry, look no further, you work in it.

75 comments:

  1. Can you post the link to the lawsuit?

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  2. Bloody fracking hell. Even a blind squirrel gets a nut every once in a while. It only took that blind squirrel named Zimmer 9 years to figure out that their Spine problem was in Sales.

    They shoulda just asked, well, anyone who didn't work for Sales.

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  3. Defendants:

    ZIMMER, INC., ZIMMER US, INC., ZIMMER SPINE, INC., PAUL GRAVELINE, CHRISTOPHER GIEBELHAUS, CHRISTOPHER LOUGHRAN, RYAN LIVELY, RYAN HERMANSKY, ZACH HILTON, THOMAS FALLON, RUBEN BURCIAGA, ALEX POULEMANOS and BRIAN ROWAN

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  4. Snap! I got over a Million in business. Let the bidding begin!!!

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  5. Paul give me a call, I'm willing to negotiate. I can bring four surgeons over to the Big Z, but they will need a cut of the action. Let's start at 50% commissions, and my distributorship will run the interference for you so the company can avoid violating its compliance. 1.800.382.5968

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  6. Get your popcorn ready!

    http://dockets.justia.com/docket/new-jersey/njdce/2:2011cv01857/256279/

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  7. Someone is suing Zimmer? Usually it's the other way around.

    As ye reap...

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  8. Well . . . so I guess it's true what someone posted a few days ago regarding the entertainment of spouses in Vegas? Is that an example of this "fresh new approach" that Stryker brings to the table?

    TSB: You've posted twice regarding a "new approach" and a "fresh new approach" that Graveline brings to the Big Blue Z. Can you provide details or expand on those points? From where I sit, it seems to be the same old tired attempt at increasing market share.

    If I'm a Z distributor that's been around for more than 24 months, I'm looking hard at getting the F out of Dodge. Heck, they already carry multiple lines so why not move what little business they have to someone else and drop the headaches of "we're committed to the Spine Marketplace" BS corporate has spewed every quarter for the last 7 years. Dynesys is dead and it's never coming back.

    The way Z rolled over in the DPA and their overall ineffectiveness at enforcing non-competes, I'd have to say the early money is on Stryker to prevail in this one.

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  9. 2:47 I was being facetious when I said he was bringing a fresh new approach. The fresh new approach was buying old salespeople and distributors.

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  10. By the way I would take the over and under on Stryker, and the bigger question is does Double D survive this ordeal?

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  11. 2:47:

    I would have to agree with you in regards to early money on Stryker. After reading the legal paperwork from above post these guys should be ashamed of themselves

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  12. Dvorak has obviously entrusted Jeff Paulsen to go fishing back in his ol' Stryker pond and grab Graveline and the rest. The mere fact that Dvorak hired Paulsen should make the Z board second guess his "chops". Ray Elliott is looking not too bad right about now

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  13. what can you possibly sue these guys for ? what a joke!

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  14. Depending upon the language in their distribution agreement, I guess you can sue them for plenty. Surely Stryker covered their ass if not, they'll be the laughing stock of the industry

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  15. Does anyone think Globus will go public?

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  16. What can these guys get sued for? I guess in order for us to know that we would have to see their corporate agreements/ non-competes. Stryker is a conservative company and I'm sure if their moving forward it's probably an open shut case based on found evidence. Getting sued is no fun, enjoy having your life probed for the next 6 months!

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  17. As someone that has had extensive experience getting screwed by Zimmer, I for one am glad to see they are getting put back in their faces. And I promise you Ray Elliot looks no better than Grvalin or Dvorak at any time.

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  18. Did you say Gremlin or Gravelin

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  19. Sounds like a desperate attempt by Dvorak and Paulsen to squeeze every last $$ out of a spine before its demise.

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  20. If Stryker can sue Zimmer for this...Globus will be suing Lanx very soon.

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  21. what will globus file against Lanx? Instead of focusing on legal fees both companies should take the time to realize that without a diversified product portfolio the next few years will be brutal. $600 pedicle screws won't cut it soon. How long can you get 6k for an Interspinous device?

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  22. Notice ZMH minions are lawyered up...to bad about the reps and agent. Maybe ZMH will idemnify them...nah did'nt think so. Reminds me of that line from Animal House to Flounder.."Hey you F'ed up, you trusted us"


    Plaintiff: HOWMEDICA OSTEONICS CORP. represented by DAVID MICHAEL MONACHINO

    Defendant: ZIMMER, INC.
    represented by JAMES P. WALSH, JR.

    Defendant: ZIMMER US, INC.
    represented by JAMES P. WALSH, JR.


    Defendant: PAUL GRAVELINE
    represented by JAMES P. WALSH, JR.

    Defendant: CHRISTOPHER GIEBELHAUS represented by JAMES P. WALSH, JR.


    Defendant: CHRISTOPHER LOUGHRAN
    Defendant: RYAN LIVELY
    Defendant: RYAN HERMANSKY
    Defendant: ZACH HILTON
    Defendant: THOMAS FALLON
    Defendant: RUBEN BURCIAGA
    Defendant: ALEX POULEMANOS
    Defendant: BRIAN ROWAN

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  23. if they took distribution agreements outside their old territory lines, its an easy case, stryker loses.

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  24. If Zimmer fails to take responsibility providing legal representation for the defendants, each individual should personally sue Zimmer, David Dvorak, Jeff Paulsen and Paul Graveline. Corporations are great at making promises, nitwits like Graveline are out to make a name for themselves, and care less about your own personal well being. The mob exhibits more loyalty. Everyone wants to make Wall Street money in a Main Street industry. GREED WILL SUCK THE LIFE OUT OF YOU

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  25. to 3:26.......SHUT UP. You don't have nor don't deserve a view at the truth. Let me tell you that they are well represented. So stop spouting your drivel to create a new perception. Your National Enguirer mentality and those of similar rep quality should look in the mirror; pack your bags and ride out of town or put on big people hats and earn it.

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  26. If they are all "represented" now..who is paying and will that substantial and unexpected cost now be worth any short term gains from trying to switch business to ZMH? Time will tell

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  27. Great post, 7:49 when all is said and done, will it have been worth the time and effort defending oneself, let alone the money. You know what the great John Lennon once sang, instant karma's gonna get you.

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  28. 6:05...How long have you been waiting to throw some of that drivel out? Too funny

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  29. From a Stryker Spine rep- it was communicated to us that we bought Globus. Now, it seems to have fallen apart.

    If that's true, then Stryker is really screwed. That's their only way to get products and grow market share, temporarily.

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  30. Musculoskeletal Man said...
    By the way I would take the over and under on Stryker, and the bigger question is does Double D survive this ordeal?

    I say...

    The real question is, why was this clown allowed to stay on this long as CEO at all? Maybe his impressive musculature scares somebody...

    The smart money, at the beginning of DD's tenure, @ ZS was that DD was picked to be CEO because he was the M&A guy, and they wanted to sell the whole kit and kaboodle.

    They should have. The Big Blue Empire is shrinking by the day thanks the to stellar leadership it enjoys.

    Not that Ray's leadership was anything to write home about, once the DOJ discovered the most excellent business plan was simply bribery...

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  31. I wonder when everyone will figure out that the grass is never greener on the other side, ever seen the other side of grass? its definitely not green. At the end of the day this will be bad for Z and SYK and if I'm an MDT, Synthes, JJ, Globus, Nuvasive or any other company rep in these areas I'm sending these guys a christmas card this year for their gift of opening the door.

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  32. Whats the story about Dr. John Steinmann in CA? It looks like we have another father-son deal or brother-brother deal. And by the looks of it John Steinmann has his hand in several companies that actual sell back to him many times over.

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  33. My money is on Stryker. Paulson must have placed PG in a COO position to get around no compete issues with Stryker. PG has zero knowledge of operations and is obviously working the sales angle "behind the scenes".

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  34. Graveline may have somewhat of a pass being "pseudo hidden" in Ops, but the other regional and territory-based sales guys will most likely have issues. Getting around certain non-competes is not as easy as people think. On another note, it appears that the vast majority of the Stryker Arizona branch is listed as defendants. Even if they get nailed, I'm assuming that can't be good if you are the current Zimmer distributor there -- just a matter of time.

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  35. Sounds like the rerun of an old movie when Stryker moved Drue DeAngelis out of the Phoenix area in favor of the Howmedica distributor, or something like that

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  36. the sex is on fire

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  37. Interestingly, Drue is now a recruiter doing work for Zimmer Spine.

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  38. Wasn't he recruiting for Stryker, Paradigm and SBI?

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  39. Of those defendants, who do you think has the best handicap in golf ? Do you think their customers are good golfers ?

    make the popcorn pop, bitches!!

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  40. is it better to be pissed off or pissed on?

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  41. Like others, he will recruit for whoever is willing to pay the fee. ZMH, Stryker, Lanx, Taliban, etc

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  42. Let's be honest, the bottom line is that ZS has an inferior product line. For God's sake, they don't even have a complete pedicle screw system. Even the smaller companies in this industry have a system that will go all the way up the spine. Pity those Stryker reps that have signed on with something they will quickly regret...along with a lawsuit! I will be enjoying my popcorn as well while watching this.

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  43. 6:26 is right. He's a ho like many others.

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  44. MM,

    Screw ZMR and ZTRK. I'm worried about government shut down and more so troubled - if happens, will blog cease too?

    All hands to arms and support! We cannot allow MM to go down with the ship.

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  45. I really hope Stryker pounds Big Z. Our industry needs a clear message that non-competes matter.

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  46. 6:43 Never fear, TSB is in the basement printing benjamins to spend in this banana republic, regardless what happens with our over coiffed and anal retentive politicians the show must go on. Hey is Graveline still 5'4?

    'In the summer time when the weather is high, you can reach right up and touch the sky, when the weathers right you got women, you got women on your mind, Have a drink have a drive go out see what you can find"

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  47. Gonna sit down in the Kitchen fix me somethin good to eat, and make my head a lttle high, make the whole day complete,

    Gunna lay round the shanty mama (reading TSB) and put a good buzz on!

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  48. How much does it cost I"ll buy it time is all we lost I"ll try it he can"t seem to run his own life I"ll be damn if he runs mine

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  49. MM, it's 6:43 Thanks man!
    ...the show must go on...

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  50. "fill it, light it, shut up and close the door".

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  51. what is medtronic going to do ?

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  52. ^^^ DUH! WINNING!!!!

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  53. This entire issue is a joke. Whoever puts their money on SS has their head in the sand. This happens every day. SS’s only motive is to buy time to get out to see all of the surgeons in this branch in an attempt to save the business. They will achieve this via an injunction, which will last about 90 days. All of the reps/mgs who moved to ZS will be completely indemnified by ZS and have nothing to worry about. 90 days from now – business as usual and all who went to ZS get their big checks and move on. Keep in mind there is very little difference between ZS and SS products, thats why this works so well. BTW - graveline probably had very little to do with this - he really doesn't have enough vision to pull it off. I for one congratulate them for their balz. Stay strong & best of luck.

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  54. POD POD POD wave of the future coming to a state near you!!!

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  55. 401am: my bet is that you live in Phoenix and used to work for Stryker. ZMH will likely have to settle and - as part of that settlement - will pay damages and agree to a period of time for the guys to sit out. Given the large numbers, Z will pay big for these guys.

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  56. Stryker Interventional Spine (different entity) just poached several Arizona Kyphon/MDT reps and is being sued by big blue over it...they are under orders not to bring aboard anyone form any Medtronic company...

    what comes around....

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  57. Reminds me of a joint rep in NYC who went to S&N as the distributor and took 5 or 6 reps with him. Stryker came after them hard and 3 or 4 of the reps got scared and came back......to different territories

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  58. The Arizona market has been decimated with "construct cap" pricing. What these former Stryker reps are about to realize is (a) the Z bag is really really bad and (b) their relationships aren't as strong as they think they are. Good luck scratching out a living on 1-3 level pure Degen Spine cases with that bag. Kiss your "tip to tail" constructs good bye, but have no fear you now have Trabecular Metal and Dynesys!!

    My $ is on the Depuy, NuVasive, Globus, and Medtronic reps to clean Stryker and Zimmer's clock in these markets. No way all these reps flip 100%. At best they might flip 30% but the Zimmer Spine bag is weak and incomplete and that 30% will drop to 10% within 9 months. There is a reason Stryker Spine sells more in Xia than all of Zimmer Spine's combined sales.

    I hope the former Stryker reps have an ironclad guarantee with CASH in hand. One thing you can never ever do is TRUST Zimmer Spine corporate sales management (especially DK and JC ... laughable those guys are still around). If the reps that flipped made a "points only" deal they won't last 6 months before they are gone. I hope they have the cash.

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  59. Don't underestimate Paul G. He took a very similar company from laughable to respectable, it's called Stryker Spine. He's got more leadership ability in his index finger than most of you dart-throwers do in your trembling puny bodies. Semper Fi!

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  60. Do you want us to laugh now or later, pleaaaaaze give us a break, he came up the ranks sucking the teat of Rainey, Smith and Mogul. Another in the long line of geniuses man up

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  61. Gravelin is just a short used car salesman. As for DD he just needs to go away. ZS is imploding, just sit back and watch. Think the company is bad now just wait until 3rd quarter. The reliable life that the distributors enjoy now is coming to an abrupt end. With that sales will continue to plummet. Life will suck if you work for ZS

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  62. 4:45pm

    Good joke! Looks like you are PG yourselves...just posting it under anonymous profile. What a shame! Do you believe that this stupid trick really works?

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    1. The fact that you guys waste your time on this bellyaching over PG is pretty sad... But nothing gives more satisfaction than anonymously ripping on people behind their backs right?

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  63. 8:45 is spot on. Being a former ZS employee I can attest to the erosion of morale, diminishing benefits, and you don't need to speak to PG very long to reach the same conclusions(with apologies to used car salesmen everywhere). All DD is concerned with is the short term bottom line and lining his pockets (35% raise?). The sad part is any of his success has come at the expense of a talented and dedicated workforce.

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  64. Agreed! All ZS is concerned about is how much money can they make and how many people do they get to screw while having their fun. The demise of the Austin facility is the worst mistake they can make! Or maybe the smartest, since most of the employees there won't put up with much of their lies, deceit and all-around double talk. The FDA will have a field day next audit.

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  65. The Austin facility should have never been allowed to remain open after Z Spine bought that gawd awful company who based their entire USA existence on paying doc's off (their #1 doc's distributor was the doc's SA in Virginia ... and the VP that oversaw that area? Still with Z Spine to this day).

    Z Spine's CFO and (get this) new biz development, HHHAAAAAAA, decided to shut down Memphis and move distribution to Austin. (yep, he's still around too) Sooooo Austin is there for the long haul. I'm sure the CFO got a nice bonus but that move alone showed Zimmer is freakin' clueless when it comes to running a spine business (suureee ... Zimmer Ortho runs out of Warsaw so what could it hurt to run Spine out of an Austin facility that's almost an HOUR from the airport? morons).

    Yep ... Zimmer Spine is riddled with inept leaders but it all starts with Dvorak and goes right through every group president he's hired and fired. In a desperation move, he hires Paulsen (former stryker, but spent some time in the US auto industry (that turned out well)) who brings on more stryker folks (almost all were passed over or fired) and they break out the 'ol styrker/zimmer recon playbook. "here's the rules mr sales reps ... but just don't tell us Mr. Ohio distributor when you lavish a luxury day at the spa on a surgeon's wife while the surgeon "attends" a Zimmer Spine course". Ahh just like the good 'ol days. Mr. former Abbott VP, who is still around, could only improve this if he hired the doc's wife to be his rep.

    So much for Dvorak's "compliance first" stance. I guess he didn't learn the first time around when the Christie hammered his ass with a fine over 5X worse than the next closest competitor. Sure Zimmer you're "clean" while you lead a once proud franchise right over a cliff.

    Seriously TSB. It's time to stop giving these clowns ink.

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  66. What does it say when 10-15 direct Stryker reps go over to Zimmer Spine? I mean who are the bigger losers in this deal? This bunch of retards deserve each other.

    Their "competition" wins this one.

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  67. 6:28 Yes ZS should have moved everything to Memphis to begin with. That would have been the smart business move. only problem is they decided to send all the screwed up stuff to Austin, let us fix their problems and then cut everyone loose. Guess you must be a damn distributor who only cares about your bottom $$. What no one has ever realized is that in Austin we actually give a d*** about the patients, not the doctors or distributors. We would have been better off left alone. Another interesting fact, over half the Austin peeps are former Centerpulse employees. Guess what they got screwed out of a job twice by the same stupid company.

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  68. Seems like you bloggers all have too much time on your hands! I love reading the comments about getting screwed by ZS or SS or whatever company screwed you. Maybe you are not as innocent as you think you are. Everyone blames the company when things don’t work out, maybe you just spent too much time golfing and not selling. It’s sad that it is even stated on this board that all a company cares about is $$. Very good people, Making money is the number one goal of everyone invoved. And yes we are all replaceable, shocking I know, your not the only/best sales person in the country. Get over it!

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  69. It is laughable to hear that the "Big Blue Empire" is on it's way down... They remain the largest ortho company in the WORLD!!! The spine division is only a small part of the whole. Dynesys was a killer, the real question is how will they bounce back? Or will they?

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  70. 11:57

    I believe most posts regarding Big Blue refer to Spine and not the company as a whole. Zimmer is the largest "pure play" ortho company, but Depuy and Stryker are no doubt "bigger" entities.

    Regarding Zimmer Spine. Organically there is no way for them to bounce back. They could attempt a few more acquisitions but the Endius and Abbott purchases turned out to be complete busts. Lots of $ and no market share gain (only loss). The writedowns they've taken in the last 18 months are soley because of Spine's pathetic performance.

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  71. If Bryan Clauseman is still there, no need to ask why, the guy never executed a successful deal.

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  72. This division is such a joke. There are actually some really good people that work in the field but unfortunately they have never been given much of a chance with the pitiful products and terrible leadership that Big Blue Spine has. Amazing how much morale has changed since Ray Elliott first made his statements at the NSM that they were going to be the #1 spine company in the world. I feel kind of bad for the rep in my area because he's a good guy but has zilch to work with. They will be sold off in my opinion within the year.

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  73. In the past I felt bad for Zimmer Spine reps. Some were good but you get to a point, this far post-Dynesys crash, and what talent can they attract and if you have any sense why are you still there? Pathfinder II? WTF?

    I now think they all just suck. Yes, I'm sure there are some "old dogs" out there that are really good, but most of the ones i run into carry so many other lines it's no wonder their sales decline every quarter.

    Weak Corporate = weak distributor principals = weak sales force = declining market share = corporate finally realizes they need to jetision this division (and Zimmer has no qualm with layoffs).

    How many more Presidents and VPs are going to tell you what you want to hear? Only to be fooled again?

    Honestly, they would probably be better off if they sacked everyone, including distributors, and made them "re interview" for their jobs. The only problem is they have NOBODY in Warsaw, or anywhere else, that has a clue about what it takes to WIN in Spine.

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  74. Screw the distributors. All you people think is the world revolves around you. Well guess what, mistakes and mis-planning on your part is not an emergency on our part. Get a clue. Most of you have docs that actually schedule surgeries in advance but you don't plan in advance. Maybe if distributors paid for extra shipping costs and late loaner fees, then ZS would be in the black now. Not dying a slow death and taking good people back down with them. Yes, leadership is non-existant but the "worker bees" are some of the best in the industry. ZS and the field just don't see that. Well wait until October and all will be apparent. Plan your orders a week in advance.

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