Compass sued by rival Zillow for violating non-compete and stealing intellectual property

Zillow Group, a real estate marketplace giant, has filed two lawsuits against its rival Compass, claiming that Compass, a tech-enabled brokerage platform, stole intellectual property from Zillow and actively hired its employees who violated their non-compete agreements.

The suits, filed in Washington state court and federal court, allege that Compass hired three Zillow employees — Robert Chen, former Head of Machine Learning at Zillow; Michael Hania, a former Zillow Enterprise Sales executive; and Chester Millisock Jr., a former Zillow software engineer — who previously signed contracts with 12-month non-compete and non-disclosure clauses.

Zillow also accused the employees of stealing trade secrets and confidential info such as customer lists, sales data, and highly technical information before they left to Compass.

“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,” reads the federal lawsuit involving Chen. 

This past December, New York-based Compass opened a West Coast engineering outpost in Seattle. It aimed to hire at least 100 engineers to work on a variety of projects to aid Compass real estate agents, including marketing tech, new media, web and mobile, security, streaming, image and video processing, search, data science and artificial intelligence.

“In December 2018, Compass publicly announced the launch of a product and engineering hub in Seattle to directly compete with Zillow in the highly competitive technology sector focused on simplifying the home buying and selling process. It then initiated a campaign to recruit Zillow employees,” the federal lawsuit reads. 

Zillow said that Compass has engaged in similar “unlawful poaching of its competitors’ employees,” citing more than a dozen lawsuits filed against Compass in the past five years involving “theft of proprietary and confidential information.” Zillow also states that Compass is a “direct competitor.” 

Chen’s LinkedIn profile notes that he left Zillow in March. Hania started at Compass this past June after leaving ZIllow the same month, while Millisock Jr. joined in March after leaving in February, according to LinkedIn.

Zillow is asking for monetary damages and to enforce the 12-month non-compete clause for Chen. The company also wants to prevent Hania and Millisock Jr. from sharing Zillow’s confidential information.

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