Former Integrity Home Care President Philip Melugin is leading a team at Phoenix Home Care. Five employees are being sued by Integrity after they left the agency to join Melugin.
Phoenix rises from Integrity breakup
A phoenix is rising, and he’s a familiar face in the home health care industry.
Philip Melugin opened Phoenix Home Care Inc., 3033 S. Kansas Expressway, on May 31 after a messy exit in December from Integra Healthcare Inc., a.k.a. Integrity Home Care.
In the wake of Phoenix Home Care opening, a noncompete lawsuit against Melugin has been renewed and a new suit has emerged packed with breach of confidentiality claims against former Integrity workers.
Melugin said his relationships in the home-care industry led a team of 70 employees, roughly 60 from Integrity, to start with three state contracts through the Department of Health and Human Services: private duty nursing; consumer-directed care services; and in-home personal care services. Phoenix, which is backed by three Kansas City investors, also offers privately paid services.
Melugin said Phoenix is spending 2,000 man-hours a week serving those contracted customers, and those clients have represented a majority of the company’s early revenue – estimated at more than $100,000 in the first three weeks of business.
Six months ago, Melugin was forced out of his post as Integrity president by CEO Greg Horton and Treasurer Paul Reinert.
Integrity officials responded to Phoenix’s opening with a breach of confidentiality lawsuit filed May 20 against five former employees who have joined the Phoenix team. Named in the suit are former regional director Suzie Waltke and former private duty nursing staff members Lanora Porterfield, Nancy Rigsby, Jessica Sharif and Melissa Wood.
Integrity’s suit claims the women downloaded proprietary information, deleted computer files, encouraged other employees to leave, solicited clients to move to a competitor and lied to clients and co-workers.
Though total dollar amounts have yet to be determined, Integrity is asking for damages in excess of $25,000 per defendant, according to court records.
“We believed the suit was necessary to ensure that our company’s information and the information about our clients remain confidential,” Horton said via e-mail.
Phoenix Home Care was not named in the suit.
Horton estimated 30 of Integrity’s more than 2,200 employees have left recently for “personal reasons.”
Based on Springfield Business Journal research, Phoenix’s 70 employees would make it the fourth-largest home health-care agency in the Springfield area. Horton said he wasn’t concerned about its local presence.
“There are many competitors in our industry, and one more will not impact our continued commitment to our clients, patients and employees,” Horton said in the e-mail.
Attorney Ken Rogers of Frederick, Rogers & Vaughn PC, who represents the five defendants, said his clients would respond appropriately to the allegations if the case is not resolved by the time responses are due July 25.
“I think we may be moving toward a resolution of the entire case,” Rogers said, noting discussions with Integrity attorney Joseph Johnson at Lathrop & Gage were ongoing.
In September, Integrity board members moved to terminate Melugin before he took what was supposed to be a six-month leave of absence. One month in, Melugin said he wanted a permanent exit, and a struggle for control of the company began.
After a failed attempt to buy out his partners, Melugin was fired, and a court battle began over the value of his 45-percent share in the company that posted $40 million in 2008 revenues, according to SBJ archives.
Statements Melugin made under oath in that case piqued the interest of Rick Temple, an attorney representing Oxford HealthCare. Oxford sued Melugin for violating the terms of his noncompete clause shortly after Melugin left Oxford in 1998. Melugin started a Kansas City-based home-health care business in 1998 that merged with Integrity Home Care in 2003.
The two parties settled in 2001, but Oxford has since moved to reopen that case due to Melugin’s testimony earlier this year when he said Integrity was a company he “nurtured from its infancy,” according to court records.
Temple said following the defendant’s June 17 motion to dismiss, Judge Jason Brown is expected to hold a hearing in July to determine if the case would be re-opened.
“(Melugin) testified both in his deposition under oath and in his filings that he didn’t have anything to do with the starting of Integrity Home Care here in Springfield. Based on that, Oxford settled. Then, when he sued Integrity, he claimed that he formed it, nurtured it, and, in other words, it was his company. Both of those statements can’t be true,” Temple said.
Melugin believes the case Oxford is trying to re-open is baseless and should be settled soon.
“I was the founder of Integra Health Care in Kansas City, and Greg Horton was my partner in that venture. He, independently, started the Integrity operation of southwest Missouri. After my noncompete was up, the two companies merged,” Melugin said. “My statement during the lawsuit was simply that I was the founder of Integra and that I nurtured it from its infancy, which is true today and it was true then.”[[In-content Ad]]