Zillow filed suit Friday against Compass, alleging that the high-tech brokerage poached three employees from the company in a bid to abscond with intellectual property.
Two suits were filed — one in federal court and one in Washington state — claiming that the three employees had signed contracts with 12-month non-compete and non-disclosure clauses. The three employees — Chester Millisock Jr., Robert Chen, and Michael Hania — are also named in the suit.
“This calculated theft was designed by Compass to help it better compete with Zillow in the marketplace, at Zillow’s expense, and so Compass could avoid the expense of independently developing valuable machine learning and other technologies,” the federal suit said.
“Compass actively recruited these employees in order to avoid the costs associated with open and honest competition and to obtain Zillow’s confidential and proprietary information,” Zillow accuses.
The suit also alleges that Chen took photos of “proprietary wireframes and a proposed regional launch timeline related to certain Zillow services.”
The federal suit names Chen, the state court suit names Millisock and Hania. The lawsuit alleges that Millisock transferred confidential information to a personal Dropbox account, and then attempted to delete evidence that he used the account.
“Mr. Millisock still has access to the information stored in his Dropbox account and remains able to access the misappropriated software data from other devices,” the court documents state.
Hania, Zillow alleges, sent emails with confidential and/or proprietary information from his Zillow email account to his personal email account “in the months, weeks and days before he left employment with Zillow.”
The suits also accuse Compass of opening an engineering hub in Seattle to directly compete with Zillow, and then “initiated a campaign to recruit Zillow employees.”
“We support healthy competition to drive innovation. Compass’s practices are something different; they are unlawful, and because we have a responsibility to protect our intellectual property, we are taking action,” Zillow said in a statement to GeekWire. “We take seriously the agreements Zillow Group makes with its employees, and we work to fairly and completely enforce those agreements when we believe they are violated.”
Compass, however, takes a different tack, claiming that they are not a direct competitor of Zillow, so the employees could not violate a non-compete.
“You cannot break a non-compete by leaving to go to a company that does not compete with you,” Compass told GeekWire. “With hundreds of engineers and hundreds of salespeople, it’s unfortunate that losing three individual contributors would result in using scare tactics to intimidate current employees from leaving.”
“Compass has never asked and would never accept any trade secrets. A number of years ago Compass abolished non-competes for anyone that we hired as we believe that people should work at Compass because they want to, not because they are forced to,” the company added.
