Walking the fine line
PayPal and its parent company eBay have sued Google and two of its employees on various counts of misappropriating trade secrets and violating terms of employment.
The main focus of the action is a Google exec Osama Bedier, who was VP of platform, mobile and new ventures at PayPal until 24 January this year, at which point he was recruited to a similar role at Google and is apparently one of the masterminds of the Google Wallet app and supporting ecosystem, announced yesterday.
PayPal announced the action in a blog yesterday, apparently timed to coincide with the Google Wallet announcement. It also provided a link to the legal documents, which we read for a bit of Friday morning entertainment. Joking aside, as far as lofty, verbose legal documents go, it's quite an entertaining read due to the sheer amount of foul play alleged.
The key points are:
1. Google, and specifically former PayPal exec Stephanie Tilenius, allegedly approached Bedier to work for Google last year via Facebook. Not only did this violate a claimed contract between Tilenius and PayPal, but it occurred while Google and PayPal were in protracted negotiations about working with each other.
2. It's claimed that Bedier's move to Google made the appropriation of trade secrets inevitable, but specifically PayPal alleges that Bedier used his own email and DropBox to grab a bunch of strategic documents just before he left.
3. Bedier has allegedly been using PayPal trade secrets in sales calls to retailers since he joined Google. He has also alleged to have been actively trying to poach other PayPal employees in contravention to his contract.
4. Google has has allegedly been complicit in all this naughtiness.
PayPal/eBay wants the court to prevent further misappropriation of its secrets and award varying flavours of compensatory and punitive damages. We were not aware of a formal Google response at time of writing.
When we first heard about this action we figured it was the kind of sour grapes you often get from companies when someone defects to a competitor. The allegation that Bedier would inevitably be in a position to utilise ‘secrets' seemed frivolous. It's not against the law to poach someone for their expertise, in fact that's the whole point.
But looking through the legal document you can't help but feel there has been some pretty dodgy behaviour on the part of the defendants. If Bedier did take a bunch of confidential stuff just before leaving, surely that's an issue, and if he and Tilenius did have a contract preventing them from approaching PayPal employees and did so regardless, then surely they're in breach.
This action paints a picture of a very aggressive Google that is prepared to do what it takes to succeed in its chosen markets. It could have done a deal with PayPal, but chose to poach some of its key staff and go it alone. That alone is not illegal, but Google seems to have a case to answer regarding how it went about it.
