Non-compete agreements are are commonly included in employment contracts, especially contracts for high-level executives. These agreements often require the employee to promise not to work for a competitor for a certain amount of time after leaving the company’s employment. They also usually require the employees to promise to protect the company’s trade secrets. Companies tend to be even more protective of their trade secrets when they are involved in a heated competition with another company.
One such company that has been kept on its toes is Lyft, a San Francisco-based ride-hailing company that allows customers to order a personal car using an app on their smartphone. Lyft has been in stiff competition with Uber, which provides similar products and services. The competition got tighter when Travis VanderZanden, Lyft’s former chief operation officer, left his position at the company, then went to work for Uber a mere two months later.
According to a lawsuit that Lyft recently filed against VanderZanden, its former executive allegedly stole trade secrets from the company before going to work for Uber. The lawsuit alleges that VanderZanden downloaded important company information, including financial data, information on future product plans, and growth statistics. The lawsuit alleges that VanderZanden’s personal online storage account contained more than 98,000 files and folders after he left his employment with the company.
According to the lawsuit, downloading such confidential information violates, not only VanderZanden’s confidentiality agreement with the company, but it also breaches his “fiduciary duties of loyalty and confidence he owed to Lyft as an officer and employee.” VanderZanden vigorously denies these claims. Often a company may simply allege that misconduct has occurred even though it has scant proof simply to deter a former employee from fairly competing. VanderZanden claims that is the case here.
Erin Simpson, a spokesperson for the company, said in a statement, “We are disappointed to have to take this step, but this unusual situation has left us no choice but to take the necessary legal action to protect our confidential information.” In fact, the situation is not very unusual at all. Confidentiality and non-compete agreements exist to prevent this very thing from happening. When two companies provide similar products and services, the battle to one-up each other can become that more vicious when it relies on certain facts being kept strictly confidential.
The lawsuit also implies that VanderZanden was having second thoughts about leaving the company. According to the complaint, VanderZanden allegedly sent an email, before he left, to Lyft’s co-founders, telling them that everyone should “think this through … before we finalize … I love you guys like brothers.”
Whatever he may have said in his emails, VanderZanden fervently denied the allegations on Twitter, shortly after the lawsuit was filed. He claimed that “Lyft’s PR has lost it, the allegations in their complaint are ridiculous.” He also stated, “Just to be crystal clear, I did not take any confidential data to Uber.”
Lyft’s bitter competition with Uber goes back years and has allegedly included cutthroat tactics, including systematic attempts to poach drivers and employees as well as mimicking each other’s product releases. VanderZanden’s recent decision to leave one competitor in favor of another is merely the latest in a long string of bickering between the two companies.The business litigation attorneys at DiTommaso Lubin Austermuehle near Chicago and Oak Brook represent business owners and professionals regarding non-competition agreements, covenants not to compete, restrictive covenants, trade secret theft and other claims throughout the Chicagoland area, including Cook, DuPage, Lake, Kane, McHenry and Will Counties; and in the Mid-West region, including Indiana, Wisconsin and Iowa. You can contact us by calling our toll free number (877) 990-4990 for a consultation or contact us online by filling out the form at the side of this blog. We have prosecuted or defended a number of lawsuits similar to the Uber case against VanderZanden