Blue Shield
Blue Shield of California sued a former employee who has criticized the nonprofit insurer. (Bob Chamberlin/Los Angeles Times)

Chad Terhune
October 9, 2015

Health insurance giant Blue Shield of California sued its former public policy director and accused him of disclosing confidential company information.

The nonprofit insurer filed the breach of contract complaint against Michael Johnson in Los Angeles County Superior Court on Friday, eight months after he resigned from the company.

Johnson worked at Blue Shield for 12 years and left in March. Soon after, he launched a public campaign against Blue Shield and criticized the nonprofit for shortchanging the public and operating too much like its for-profit competitors.

The California Franchise Tax Board cited some of those same reasons last year in revoking the insurer’s longtime exemption to state income taxes.

Some of the issues Johnson raised about Blue Shield’s corporate conduct and obligations to the public also became key issues during the state’s review of the insurer’s $1.2-billion acquisition of Care1st, a Medicaid health plan. The state approved the deal last month after imposing a number of conditions on the San Francisco company.

Johnson said the litigation is without merit and designed to burden him with big legal bills. “I won’t back down. I’m going to keep speaking out, louder than ever, about Blue Shield’s misconduct as a nonprofit,” he said.

His online petition, which has attracted more than 13,000 supporters, calls on Blue Shield to provide at least $500 million a year in community benefits or return to the public the $10 billion in assets it holds.

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