In the continuing saga of “Everybody Suing Everybody” we are learning that PayPal is suing Google and two ex-employees for what they claim are theft of trade secrets and breach of contract, claiming that trade secrets had been stolen and contracts broken.
This suit was filed on the same day Google introduced its Google Wallet mobile payment system., part of a mobile payment platform that competes with PayPal’s current and possible future mobile solutions.
PayPal’s Senior Director of Global Communications, Amanda Pires, says that “While PayPal prefers to innovate to win customers, sometimes the behaviors of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets–its trade secrets.”
At issue here are the actions of two former PayPal employees who left PayPal to join Google. Stephanie Tilenius left PayPal in October 2009 and was subsequently hired by Google in June 2010, and went on to became Google’s VP of Commerce and Payments. PayPal asserts that she was bound by contract not to solicit PayPal employees until March 2011.
According to the complaint, Tilenius contacted Osama Bedier, then at PayPal, in July 2010 and attempted to convince him to join Google. Bedier. After months of pursuit, including meetings with top Google executives, Bedier opted to remain with PayPal in December 2010. Tilenius apparently persisted and it’s claimed managed to convince him to resign from PayPal in January.
The lawsuit charges both Tilenius and Bedier with violating contractual obligations and theft of trade secrets, and it also charges Google with interfering with PayPal’s contractual relations.
The Department of Justice looked deeply into non-poaching pacts last year. Google was among several tech companies that stood accused of conspiring with each other not to try to hire each other’s employees, thereby suppressing employee wages.
Google at that time defended the right of employees to seek better opportunities, stating that, “Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy,”
A Google spokesperson has said, “We respect trade secrets, and will defend ourselves against these claims.”
Lawsuits around non-competition agreements are not uncommon and this is not the first time Google has been accused of poaching valuable employees.
In July 2005, competitor Microsoft sued Google to enforce a non-competition agreement against Dr. Kai-Fu Lee, a former Microsoft executive who left the company to work for Google in China. The two companies eventually settled in December 2005 under undisclosed terms and Lee left Google in September 2009, shortly before a virulent cyberattack that one element prompting Google to scale back involvement with China.
To quote Rodney King, “Can’t we all just get along?”