Blue Shield Sues Former Executive Over Alleged Breach of Contract

On Friday, Blue Shield of California filed a lawsuit against its former policy director over an alleged breach of contract, the Los Angeles Times reports.

Details of Lawsuit

The lawsuit, filed in Los Angeles County Superior Court, alleges that Michael Johnson disclosed confidential company information.

Johnson resigned from Blue Shield in March and shortly after launched a campaign against the insurer (Terhune, Los Angeles Times, 11/9). He said that the insurer has been "shortchanging the public" for years, noting that he planned to launch a campaign to convert the insurer into a for-profit company and force it to return billions of dollars to the public (California Healthline, 3/18).

Blue Shield said it is not yet seeking damages. Instead, the insurer said it wants Johnson to:

• Return any confidential information he has; and
• Stop disclosing protected information.

Blue Shield said a forensic analysis of Johnson's company laptop revealed that he had accessed confidential documents shortly before resigning, according to the lawsuit.

According to the insurer, Johnson was privy to information about:

• Confidential communications with the California Franchise Tax Board;
• Executive pay;
• Legislation;
• Lobbying;
• Pending litigation; and
• Regulatory actions.

Blue Shield said Johnson has a right to share his opinion about the company, but he "is not entitled ... to publicly disclose the details of highly confidential or attorney-client privileged matters that he learned by virtue of his employment as an executive at the company, in violation of California law and the agreements he signed while employed."

Johnson's Response

Johnson argued that the lawsuit has no merit and instead is designed to burden him with legal costs.

He said, "I won't back down. I'm going to keep speaking out, louder than ever, about Blue Shield's misconduct as a" not-for-profit (Los Angeles Times, 11/9).