BRK.B Berkshire Hathaway Inc

By Jon Kamp and Anna Wilde Mathews 

A federal judge on Friday denied a UnitedHealth Group Inc. attempt to block a former employee from joining the new health-care venture launched by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co.

The judge's denial of a request for a temporary restraining order could make it harder for UnitedHealth's Optum health services to use the legal discovery process to learn more about the unnamed start-up venture and what the employee at issue, David W. Smith, will be doing there. The venture's chief operating officer has testified that it is focused on the health-care needs of its three founders' own employees and isn't an Optum competitor. Optum, in a lawsuit filed in January, contends the venture is a potential rival.

U.S. District Court Judge Mark Wolf also on Friday ordered that the case move to arbitration, something the defense had been seeking.

"The parties shall select an arbitrator promptly," the judge said in a one-page order.

A spokesman for Optum said Friday, "We are committed to protecting our confidential information and will aggressively do so in arbitration." A spokeswoman for the new health venture declined to comment.

Optum has been trying to stop Mr. Smith, who spent 2-and- 1/2 years working in Optum's corporate strategy and product units, from joining the new venture or sharing trade secrets, alleging his job change violated a noncompete agreement. Mr. Smith joined the venture, known in court filings as ABC, last month after quitting his job at Optum in December. Mr. Smith has said he didn't leave Optum with any company files and doesn't want or have any use for that information in his current job at ABC.

The new venture has sparked scrutiny in the health-care world since its formation last year, in part because of its three high-profile backers and the limited details about its scope and plans that its leaders have offered. Its broad goals are to improve health care and rein in costs for employees of the founding companies, the founders have said.

"We're in fundamentally different parts of health care" compared with Optum, Jack Stoddard, the venture's chief operating officer, testified in late January. He also said the venture's efforts include focusing on the complexity of health insurance and asking if it can "reinvent what insurance looks like in terms of benefit design."

Optum has argued that testimony from Mr. Stoddard and Mr. Smith show the venture is a competitor.

"Smith has failed to offer any reason to believe he not will share Optum's information with ABC," Optum said in a filing this week, before the judge's ruling. "And ABC has offered no reason to doubt that the real reason Smith was hired was his keen insights into Optum's strategy."

Write to Jon Kamp at jon.kamp@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

February 22, 2019 13:29 ET (18:29 GMT)

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