A trade secrets case has roiled an Augusta-born business known to thrive on secrecy.
Xytex Cryo International is accusing its former president, her husband and its former IT director of misappropriating confidential business information.
The company claims their actions are stunning violations of confidentiality and non-compete agreements the defendant signed with the sperm bank.
In court filings, defendants Lorin Cohen, Jeremy Cohen and Clint Martin deny the claims.
The trio say they were acting within the scope of their employment in retrieving and emailing the private documents to external addresses.
Founded in the 1970s at the Medical College of Georgia, Xytex filed for an injunction and damages in March, a few days after initiating a forensic investigation.
Lorin Cohen, who served as company president from 2021 to November, resigned her most recent contract position with Xytex just as the investigation got underway.
As president, she had “recruited” Martin to use his access to all company files and expertise to steal the information, the suit said.
Investigators would find “an astonishing and wide-ranging pattern of corporate espionage to steal, convert and use plaintiffs’ trade secrets and other confidential information,” it said.
In addition, she and Martin deleted thousands of files from Xytex computers, they found. Lorin Cohen returned a work computer to Xytex “wiped completely clean.”
The allegations date to at least 2022, when she sought an email chain between former CEO Clarence Blalock, Clay Blalock and outside legal counsel about the company’s employee stock option plan.
Cohen forwarded the documents and numerous others to her personal email address and her husband’s email. At one point she added a message that “no one but Clint knows I have access,” according to the lawsuit.
She forwarded sales reports, compensation reports, financial statements, a “parentage letter” containing confidential patient information, lists of doctor clients and a February company strategic plan powerpoint, according to Xytex.
Xytex sought a temporary restraining order to stop the defendants from doing anything with the documents, and Columbia County Chief Superior Court Judge Sheryl Jolly granted it.
The company also seeks punitive damages, attorney fees and a jury trial.
In a motion to dismiss the demands, Martin’s lawyer argued that he didn’t disclose anything to anyone “not working for Xytex.” Nor had he taken any steps to compete with the company, it said.
“Defendant Martin asserts his duty was to act at the instruction of his supervisors,” he said in an answer to the claims.
Moreover, Martin said he actually retrieved the documents to help Cohen conduct a different investigation – into allegations of “misuse and fraud on the part of Xytex Cryo executives” – involving the stock option plan.
In her answer to the allegations, Lorin Cohen said she obtained the emails after another employee raised concerns about possible fraudulent conduct involving the Blalocks.
She readily admitted sending all the documents in question to her personal email account or her husband’s.
Cohen claimed she did that so she should work “while she was away from her computer” and “access the information outside the office,” the filing states.
Among the at-home work she was doing included a Xytex-related venture she and Clarence Blalock were planning, it said.
The Cohens’ filings claim Jeremy Cohen, an attorney, was serving as “outside legal counsel” for Xytex, but Xytex argued his role was actually very limited.
Granting an order in the case after an evidentiary hearing, Jolly wrote there was “no evidence to show Jeremy Cohen had a legitimate reason to receive, access, retain or use” the documents.
