Mar 182014
 

Arcadia Home Care & Staffing (Arcadia Health Services, Inc.) is notifying employees that their personnel information, including Social Security numbers and bank account information, is in the hands of a former affiliate who has started a new company that competes with theirs.

According to the letter sent to employees, Charles E. Symes, II

had previously obtained access to your employment information under strict agreements and protocols that he had with Arcadia. Mr. Symes was an independent contractor for Arcadia. You entrusted your personal information to Arcadia. Mr. Symes was unauthorized to access your personal information on behalf of his new enterprise, “Alegre.”

Although Arcadia’s letter describes Mr. Symes as an independent contractor, his online profile and other sources all list him as an “affiliate owner” of in the San Francisco area. Statements made in a court filing by Symes claim that he and Health Care Partners (his solely-owned business) generated about 1/4 of AHS’s revenues, and that HCP had responsibility for recruiting, training, and clinically supervising the health care employees.

Arcadia’s notification letter, signed by Kathleen Bulgarelli, VP of Quality and Standards, goes on to  say,

Arcadia does not know if your personal information has been or will be misused by Mr. Symes and his group, but we do know that Mr. Symes and his new group have made fraudulent misrepresentations to Arcadia’s employees and clients. Arcadia has learned that Mr. Symes and his new enterprise “Alegre” have told numerous falsehoods in order to mislead and manipulate Arcadia’s employees. The false and fraudulent information that Mr. Symes’s group is spreading is untrue. Please note that:

  • Arcadia is NOT dissolving.
  • Arcadia is NOT insolvent.
  • Arcadia has NOT and has NEVER refused to pay its employees.

Arcadia is pursuing civil litigation against Symes and Alegre, and is investigating whether the matter should be turned over to law enforcement for criminal prosecution.

You can read their notification to employees on the California Attorney General’s website.

DataBreaches.net obtained the following statement from Symes in response to their notification:

This is a civil matter in which Arcadia is trying to get leverage by filing complaints with the Attorney General. There is a lawsuit pending in Michigan over these issues and we look forward to the Court there deciding the case.

Symes also sent DataBreaches.net some of their court filings as background. Those documents, which include a counter-complaint against AHS, claim that when AHS changed ownership in 2012, the new owner tried to break the long-standing affiliate contract by offering Symes/HCP three unattractive options. When Symes declined, AHS started withholding monies due them and engaged in other problematic conduct, including making homophobic statements and threats to “crush” him, Symes claims.

Because AHS materially breached their contract, Symes claims, opening his own business was lawful.

The documents are a useful reminder not to just believe everything you read and that there are two sides to every story. I have covered a number of cases where companies sue former employees or contractors for allegedly taking personal data of individuals to use for a new enterprise. Some other cases of this kind previously reported include Berkeley HeartLab, Huntington National BankGulf Coast Health Care Services, San Jose Medical Supply Company, and more recently, PNC. Perhaps the most well-known – or at least one of the most well-known – cases that resulted in criminal prosecution was the David Nosal case involving Korn/Ferry.

In the meantime, my best advice continues to be to remain skeptical about claims of a breach whenever there is a contract dispute until we know more.

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