Bakotic Pathology Corp., Alpharetta, Georgia (Photo: Google)

Litigation over a noncompete agreement between a doctor and the Alpharetta medical services company he founded has exploded with allegations of illicit sex, violence and illegal drug use—with nearly $45 million at stake.

The case, filed in the Delaware Superior Court, centers on Dr. Bradley Bakotic, a podiatrist who founded and was CEO of Bako Pathology, which provides pathology, molecular biology and neurology tests. Last year, Bakotic and a co-founder, Dr. Joseph Hackel, left Bako. In December, they asked a judge in Delaware, where Bako is registered, to invalidate their agreements not to do work competing with Bako for two years after departing.

Bakotic and Hackel—represented by Cary Ichter and Dan Davis of Ichter Davis in Atlanta, and Robert Cahall of McCormick & Priore in Wilmington, Delaware—argued a Delaware law, 6 Del. C § 2707, settled the matter. The law states that any noncompete agreement “between and/or among physicians which restricts the right of a physician to practice medicine … shall be void.”

“No additional facts are needed to resolve this controversy, which is purely one of law,” their six-page complaint for declaratory judgment said.

Despite the doctors' plea for simplicity, their former employer had a lot more to say in its Feb. 12 answer and counterclaims.

Bakotic and Hackel sold much of their interests in Bako to a private equity firm in 2016, a deal that couldn't have occurred without the noncompete agreements, wrote the company's lawyers, Robert Capobianco and Adriana Midence of Jackson Lewis in Atlanta, and Lauren Russell of Young Conaway Stargatt & Taylor in Wilmington.

Bakotic was paid $30.4 million in cash and equity, while Hackel got $14.4 million, and the Bako lawyers said the company wants the money back as compensation for damage caused by their “unprofessional and destructive conduct.”

Bako's lawyers spent one sentence denying that the Delaware law voided the noncompete agreements and then offered pages of details of alleged “gross misconduct” on which their counterclaims for breach of duty of loyalty, unjust enrichment and defamation are based.

Most of the allegations focused on Bakotic, who became the subject of an investigation after he and the company received a letter from Lee Parks of Parks Chesin & Walbert in July, 2017.

Parks' letter, attached to the Bako filing, said he represented a regional sales manager who had a sexual affair with Bakotic. Parks said that, on July 23  at around 3:30 a.m., Bakotic was at her apartment, where he “brutally struck [her] in the face,” with enough force to draw blood and knock her to the ground. Parks attached two photos of the woman's face, with blood in and around her mouth.

“Your conduct has now created a hostile work environment fraught with violence and the sexual harassment of workers,” Parks wrote.

In the Delaware filing, the Bako lawyers said the company hired Latham & Watkins to investigate. The filing said that Bakotic admitted to investigators that he “engaged in sexual relationships with multiple subordinate female employees,” including the woman represented by Parks and that he hit her as described. (Parks told the Daily Report that his client reached confidential agreements with Bakotic and the company.)

The company filing, citing the Latham report, also said witnesses claimed Bakotic used cocaine at work events and provided cocaine to two female employees during a work conference. It also claimed Hackel admitted to having sexual relations with a female employee.

Ichter, who represents Bakotic and Hackel, provided the Daily Report with this statement: “I will not respond to the specifics of leaked false and unverified (privileged) allegations from a pleading other than to say this: If you follow the case and the read the pleadings as and when they are filed, you will get a more complete understanding of the facts in a forum that protects us from parties who appear prepared to make baseless claims.”

The Bako lawyers referred a request for comment to their pleadings.

The Bako filing states that a special committee of the company board removed Bakotic as CEO—he remained on the board—and before it decided whether to fire him, he left the company. The filing said he solicited Hackel and another employee to leave Bako, then campaigned to dissuade a candidate who had accepted a Bako job offer to rescind his acceptance.

Jennifer Jauffret, who heads the labor and employment practice of Wilmington's Richards, Layton & Finger, reviewed the filings at the Daily Report's request and said that her opinions did not speak for her firm.

Jauffret noted that the Delaware law relied upon by Bakotic and Hackel clearly states that physicians cannot be restricted in the “practice of medicine.”

“Thus, one of the key issues, in my opinion, will be whether plaintiffs are attempting to practice medicine, or whether their intentions are really about operations, administration, project management, marketing, sales, or other business matters that would be the 'same or similar duties that he or she performed for the Company,'” as stated in one of the noncompete agreements.

According to Bakotic and Hackel's complaint, Hackel was employed by Bako “as a practicing medical doctor.”

Bakotic's job was not described in his complaint, but he was described as the CEO in an announcement of the 2016 deal with the private equity firm.