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Health tech company Verily is facing a lawsuit filed by former employee Ryan Sloan alleging that the company wrongly terminated him after he escalated complaints that the team engaged in practices that violated the Health Insurance Portability and Accountability Act (HIPAA). 

Sloan was employed as the chief commercial officer for Onduo — the healthcare provider subsidiary of Verily Life Sciences. 

In the complaint, Sloan alleged that he reported a series of HIPAA breaches concerning unauthorized use of Protected Health Information in connection with Verily’s research, marketing campaigns, press releases and national conferences multiple times during 2022. 

The lawsuit is currently pending in a federal court in San Francisco. On September 8, 2025, the judge overseeing the request denied a request by Verily to dismiss the civil complaint. 

Legal experts say the case has a number of takeaways for medical marketers, especially as it relates to brand marketing, reputation and HIPAA. 

Additional details of the case 

In the lawsuit filing, Sloan’s lawyers outline specific instances against Verily allegedly violated HIPAA. 

In January of 2022, Sloan, along with another executive at Onduo allegedly uncovered “extensive violations” by Verily of Protected Health Information (PHI) from over 25,000 patients as part of its Onduo Diabetes Program. 

Sloan’s lawyers wrote that he and the other executive escalated concerns to Verily’s privacy officer, as well as its general counsel and board secretary as required under Verily’s policy. 

The filing also states that between January and March 2022, internal investigators at Verily confirmed multiple breaches of fourteen separate HIPAA business associate agreements with large, covered entity clients on Onduo between 2017 and 2021. 

The business associate agreements apparently strictly forbade the use of Protected Health Information outside of direct patient care. 

Pursuant to the HIPAA Breach Notification Rule, a business associate must provide notice to a covered entity, and no later than 60 days from the discovery of the breach. Since Sloan made the discovery about the breach in January 2022, he concluded that Verily had to disclose the matter to patients affected no later than the end of March 2022. 

This, however, did not happen, according to the complaint. Sloan alleged that the leadership team decided to delay the decision of notifying the covered entities. 

He also alleged that in June of the year, Verily decided to establish new business associate agreements which would permit them future use of personal health information, without disclosing that some of that information had already been violated through existing business associate agreements. 

Sloan also alleged that Verily executives ordered him to suppress a press release that showed that Onduo’s diabetes program was successful at improving glycemic levels among employees living with Type 2 diabetes. 

The press release contained data from an independent study performed by researchers at Quest Diagnostics, who offered the Onduo Diabetes program to their covered employees. 

However, the press release was apparently asked to be suppressed because executives at Verily were worried that too much attention around it “may draw attention to previous marketing studies performed by Verily in breach of Business Associate Agreements from Quest Diagnostics and other clients.” 

Sloan was then fired later in early January 2023 while on protected leave. His lawyers noted in the lawsuit that he was informed that Verily’s Onduo program was going to be reduced in force in November of 2022. 

The lawsuit claims that Verily wrongfully retaliated against Sloan in breach of contract by terminating his employment and without considering him for another position at the company. 

In a statement to CNBC, a Verily spokesperson said: ″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.”

What Medical Marketers should know 

A case like this could raise a lot of concerns for those in the healthcare world, but what are the biggest takeaways for medical marketers?

Firstly, it’s important to note that while HIPAA is a central issue in the complaint detailed by Sloan and his lawyers, the lawsuit is not specifically around HIPAA violations — it’s about wrongful termination. 

“[Sloan] alleged his executive alleged HIPAA violations, reported them and this is why he was terminated. But the courts aren’t going to get to HIPAA violations in this case. They’re going to focus on was he properly terminated,” said Dan Vorhaus, general counsel and chief commercial officer at Ostro, a life sciences company that personalizes healthcare journeys. 

So while there could be concern that the case may be around HIPAA violations at Verily, there will be no verdict about whether Verily actually violated HIPAA concerns. 

However, while there may be no answers around HIPAA violations, the fact that the case highlights potential violations may have reputational repercussions for Verily. 

This is an aspect that medical marketers should hone in on. 

“A lot of the damage has already been done. That’s the reputation that you’re talking about. And so if I’m a marketer, one of the things that I would take away and continue to reinforce is the importance of perception,” added Vorhaus. “I’d want to steer clear from even the perception that I will breach my customers trust or breach my users trust.”

Matt Bedan, Ostro’s head of compliance said in situations like this where a company’s reputation may be at risk, companies often turn to keeping things within, without addressing the greater concerns of the public. 

He advised against this approach, emphasizing the need for greater transparency and communications between companies and audiences. He added that medical marketers who are involved in situations where brand reputation may be at risk should take active steps to address the narrative that may be out there in the public. 

Although this specific case would not rule on HIPAA violations, Vorhaus advised medical marketers to pay close attention to it in the future. 

“Individuals can’t bring claims for a HIPAA violation, but the government can, and the government has lawyers and enforcement professionals who read newspapers and who will see this coverage and who might decide we need to ask some questions to Verily about their HIPAA compliance. So just because this one executive cannot sue Verily for a HIPAA violation…for employment matters, doesn’t mean that the government might not come knocking,” said Vorhaus.