Express Scripts Sues Ernst & Young Alleging Theft of Trade Secrets

By Frank Byrt

Express Scripts Holding Company, one of the nation's largest pharmacy benefits managers, has sued its accounting firm, Ernst & Young LLP (E&Y), and one of that firm's former partners, alleging theft of its trade secrets and confidential and proprietary business data. 
The lawsuit asks for "substantial punitive damages" and that Express Scripts be granted an injunction to block E&Y from using or disclosing any of the information, which included product pricing and business strategies, according to court documents filed on February 14 in state court in Clayton, Missouri, near Express Scripts' St. Louis headquarters. 
In its complaint, Express Scripts alleges that Donald Gravlin, then an E&Y health care information technology partner, "had been sneaking into Express Scripts' headquarters and stealing confidential and proprietary information belonging to Express Scripts and Medco [which Express Scripts had just acquired] over the course of several months, with assistance from other E&Y partners and employees." 
The theft, which is alleged to have included over 20,000 pages of data, occurred over several months in 2012 and was discovered in August of that year by Express Scripts security team.
The complaint states that Gravlin's motive was "to grow and develop additional business in its health care segment, including potential additional business with Express Scripts, Medco, and their direct competitors." 
According to the complaint: "E&Y is liable for Gravlin's acts because at the time they were committed, Gravlin was an E&Y partner, acting for the benefit of E&Y. . . . E&Y and Gravlin's conduct is even more reprehensible when measured against the importance E&Y purports to place on its clients' data and the professional standards E&Y claims it maintains to protect that data." 
Express Scripts also alleges that E&Y and Gravlin violated Missouri computer tampering and trade secret protection laws. 
In a February 27 prepared statement to AccountingWEB, Amy Call Well, Ernst & Young's director of public relations, said: "[E&Y] will vigorously contest the claims in the complaint. When we were notified about this matter several months ago, we immediately conducted an investigation and concluded there was a violation of E&Y policies and the company's policies. We take client confidentiality seriously. We are fully committed to following our clients' security protocols."
E&Y also said it is not aware of any instance where Express Scripts' data was inappropriately used for any purpose by the accounting firm or its employees, or transmitted to a third party.
An Express Scripts spokesperson told AccountingWEB on February 27 that the company has no statement on the suit beyond what is in the court filing.
An attempt to reach Gravlin was unsuccessful.

You may like these other stories...

With our recent coverage of the recent changes and complexities found in FATCA, we realized that regulations are just part of the story. Accounting professionals have to work with foreign financial professionals, and the...
Four years after the first iPad spreadsheet, users finally have a Microsoft-sanctioned solution. When I first installed Excel on my iPad, I immediately focused on its limitations, but upon reflection I see that Excel for...
Change. For some people, it can be a dirty word. Change means adjustment, re-thinking and perspective shifts—all daunting thoughts for an industry such as accounting that is based on mitigating risk and regulations...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.