Alphabet's health tech subsidiary Verily used the health data of more than 25,000 patients without authorization and actively covered up those violations, a former company executive alleges.
The executive, Ryan Sloan, claims Verily fired him after he discovered breaches of the Health Insurance Portability and Accountability Act, or HIPAA, and reported his concerns to the company's senior management.
Patient data in the U.S. is protected under HIPAA, which ensures the sensitive information cannot be disclosed without a patient's consent.
Sloan's allegations are detailed in a pending lawsuit in federal court in San Francisco. The suit, which was filed late last year, has not been previously reported.
On Monday, the judge overseeing Sloan's case denied a request by Verily to dismiss his civil complaint, or to send the dispute to arbitration.
"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 told CNBC in a statement. "Verily is an equal opportunity employer, and takes its responsibility and commitment to abide by all laws and regulations seriously. As this is an ongoing legal matter, Verily will not be providing further comment at this time."
Representatives for Sloan did not comment.
Verily started as a moon shot in 2015 within Alphabet's innovation lab X, formerly known as Google X. It's Google's sister company and operates under Alphabet's "Other Bets" category.
The company hired Sloan in 2020 to serve as the chief commercial officer of its diabetes and hypertension business, Verily Onduo.
In January 2022, Sloan alleged that he and Julia Feldman, Onduo's general counsel, discovered Verily had improperly used patients' protected health information in its research, marketing campaigns, press releases and national conferences. The "extensive violations" affected more than 25,000 patients in Onduo's diabetes program, according to an amended complaint filed in June.
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