Wellpoint Sues Aetna, Reveals Possible Merger Plans

August 29, 2001 (PLANSPONSOR.com) - WellPoint Health Networks is suing managed-care rival Aetna Inc. over the hiring of a former WellPoint executive and has revealed that the two companies had considered a merger, according to a Wall Street Journal report.
In the suit filed in the US District Court for the Southern District in New York Wellpoint charges that Aetna breached an August 2000 agreement between the two companies not to solicit or hire certain of each other?s employees for one year, according to the report.

According to the complaint, the companies entered into the non-hiring agreement in order to evaluate a possible merger of the healthcare businesses of both companies.

However, Wellpoint charges that Aetna hired Ronald Williams, a senior WellPoint executive, to be Aetna’s operations chief in March this year and accuses Aetna of obtaining confidential and proprietary information concerning WellPoint, including its business plan, from Williams.

According to the report, Wellpoint further charges that Aetna has hired or plans to hire more WellPoint employees who worked for Williams at WellPoint. The suit seeks to prevent Aetna from hiring more WellPoint employees and asks for financial damages.