A class action lawsuit has been filed against Halyard Health, Inc., Kimberly-Clark Corporation, and officers of the companies. The class action, filed in United States District Court, Southern District of New York, is on behalf of persons who purchased or otherwise acquired Kimberly-Clark and Halyard securities in a period from February 2013 through April 2016. The plaintiffs are seeking to recover damages caused by the defendants’ violations of the federal securities laws.
Halyard sells health care supplies worldwide through its surgical and infection prevention and medical devices divisions, Globe Newswire reports. Halyard markets products directly to hospitals and other health care providers and through third-party distributors.
Prior to October 2014, Halyard was the health care segment of Kimberly-Clark, a manufacturer of personal care, consumer tissue, and professional products. In October 2014, Kimberly-Clark announced the spin-off of the health care segment as Halyard Health, Inc.
In late 2013, an outbreak of the deadly Ebola virus began in Guinea and subsequently spread to Liberia, Sierra Leone, and other West African nations. As awareness grew of Ebola and how it is transmitted, demand surged for personal protective equipment including eye shields, face masks and disposable gowns. Halyard produces MICROCOOL surgical gowns.
The legal complaint in the class action alleges that the defendants failed to disclose that the MICROCOOL surgical gowns consistently failed effectiveness tests and failed to meet industry standards for protection. Further, the suit alleges Kimberly-Clark and Halyard knowingly provided defective MICROCOOL surgical gowns to U.S. workers during the Ebola crisis. Surgical gowns must be impermeable so that a patient’s blood containing dangerous viruses like Ebola cannot seep through the gown, particularly at the seams.
On a May 1, 2016 broadcast, 60 Minutes reported that Kimberly-Clark and Halyard had knowingly provided defective surgical gowns to U.S. workers at the height of the Ebola crisis. A whistleblower claimed that Halyard’s MICROCOOL surgical gowns were prone to leaks and did not consistently meet the industry safety standards for the treatment of Ebola. Bernard Vezeau, the whistleblower, said that Kimberly-Clark and Halyard had nonetheless “aggressively” marketed the MICROCOOL gowns to hospitals during the epidemic.
Vezeau was the global strategic marketing director for MICROCOOL and other products from 2012 to early 2015. Vezeau told 60 Minutes’ Anderson Cooper that the MICROCOOL gowns “would leak when we pressure tested them, especially at the seams.”
The MICROCOOL gown is supposed to provide the highest level of protection against blood-borne bacteria and viruses. The gown’s label says it meets a rigorous industry standard known as AAMI Level 4, which means it is impermeable to blood that could contain viruses like hepatitis, HIV, and Ebola.
Vezeau said the MICROCOOL gowns did not meet the AAMI Level 4 standards and, as far as he knows, the Food and Drug Administration was not notified. Nor were customers warned about the rate of test failures. Vezeau told 60 Minutes that Kimberly-Clark knew that if they told customers, it would cost the company a lot of business.