CNBC reported that former employee Ryan Sloan claimed he was fired after flagging breaches of the Health Insurance Portability and Accountability Act (HIPAA) to senior management.
Alphabet’s (GOOG, GOOGL) health-tech unit Verily is reportedly facing allegations that it improperly used data from more than 25,000 patients and concealed the violations, according to a lawsuit filed by a former executive.
CNBC reported that ex-employee Ryan Sloan claimed he was fired after flagging breaches of the Health Insurance Portability and Accountability Act (HIPAA) to senior management. The report added that his complaint was filed in federal court in San Francisco late last year and had not been previously reported.
Alphabet’s stock edged 0.6% lower in morning trade on Thursday, despite the broader market trading higher after the consumer price index reading for August came in hotter than expected on a monthly basis but in line with expectations on an annual basis. On Stocktwits, retail sentiment around the company dipped to ‘neutral’ from ‘bullish’ territory, and chatter also dropped to ‘normal’ from ‘high’ levels over the past day.
According to the report, the suit alleges that in January 2022, Sloan and Julia Feldman, Onduo’s general counsel, discovered Verily had improperly used patients’ protected health information in research, marketing campaigns, press releases, and national conferences. The filing claims the “extensive violations” affected more than 25,000 patients in Onduo’s diabetes program.
Sloan and Feldman reportedly informed senior leaders and repeatedly raised concerns. An internal investigation allegedly confirmed multiple HIPAA breaches, including 14 violations of agreements with large clients between 2017 and 2021. Impacted patients may include those served through Walgreens Boots Alliance, Highmark Health, Quest Diagnostics (DGX), and Delta Air Lines (DAL).
Under HIPAA, companies must notify affected parties within 60 days of discovering a breach. The reported lawsuit claims Verily delayed notifications while negotiating contract renewals, representing to clients that it remained compliant. In August 2022, Feldman and another employee who were aware of the breaches were terminated, the report said. When Sloan raised the issues again in October 2022 with Verily’s then-chief revenue officer, she reportedly defended the decision to conceal the breaches, citing concerns over public relations.
The report added that a judge rejected Verily’s bid to dismiss the case or move it into arbitration, allowing the lawsuit to proceed on Monday. “Verily believes the allegations and contentions alleged in this employment matter that was commenced in 2023 are completely without merit. Verily will defend itself to the full extent of the law,” a company spokesperson said in a statement to CNBC.
Verily, which originally developed hardware like continuous glucose monitors, pivoted to pandemic response during COVID-19 in 2020 before refocusing on precision health in 2022. Last year, the company launched an AI-powered chronic care solution called Verily Lightpath and announced in February that it would sell its stop-loss insurance unit, Granular Insurance Company.
Read also: Figure IPO: Mike Cagney Reportedly Says Company Aims to Be ‘Mag 7’ of Web3, Eyes Blockchain-Traded Stock After Nasdaq Debut
For updates and corrections, email newsroom[at]stocktwits[dot]com.<