Last month Move, Inc. filed a lawsuit against Zillow, Inc. and Errol Samuelson in the Superior Court of King County, Washington for breach of contract, breach of fiduciary duty, and misappropriation of trade secrets among others actions. The National Association of REALTORS (NAR) and its subsidiary Realtors Information Network, Inc. joined as plaintiffs in the suit.
According to NAR Samuelson had knowledge of two secrets which are yet to be introduced as realtor.com projects; one project which would provide “new consumer functionality” and another which is “the modification of a major product.”
According to Inman News, filings in the case reveal that Samuelson’s would-be successor at Move, Curt Beardsley, was concerned regarding the speed at which he would be expected to execute a plan to “save ListHub,” Move’s listing syndication subsidiary. Beardsley eventually left Move, Inc. as well, and followed Samuelson to Zillow.
On March 27 Move, Inc. filed a motion for a preliminary injunction (which has since been denied by the court), in which an attorney for Move argued Samuelson’s "new position is so entwined with the role he had at Move that Samuelson cannot work for Zillow without relying upon trade secret information. Hence, the court should enjoin him from employment or consulting with Zillow."
This type of motion is common in cases where a senior exec moves to work for one of the company’s biggest competitors, however courts are unwilling to grant such motions unless there are “troubling facts” involved, said I. Neel Chatterjee, a partner specializing in intellectual property at global law firm Orrick, Herrington, and Sutcliffe LLP. Orrick is not involved with this case.
“What courts are typically doing is they are trying to figure out is this a person that can be trusted to safeguard the trade secrets of their former employer,” Chatterjee said.
They gauge trustworthiness by factoring in whether the former employee took materials from the company or tried to wipe his or her computer clean, he said. Whether or not the exec’s new role is substantially similar to his or her previous role is also considered. Given Move’s allegations, each of these factors would seem to weigh in favor of the motion in this case.
Most similar cases are ultimately settled, Chatterjee said.
“These cases are hard to win without some troubling facts. Something that indicates the person is doing something kind of sketchy,” he said.