“There are consequences for telling lies. That is so even if you are a Bay Area startup, sporting a $US4.5 billion valuation and a couple of celebrity investors, or its brash CEO. Defendants Zenefits and its CEO Parker Conrad lied about Plaintiff ADP … “
So begins ADP’s formal opposition to Zenefits’ motion to dismiss a defamation lawsuit that ADP filed against Zenefits last month.
In other words, the public war between HR software startup Zenefits and its partner/competitor payroll giant ADP is still in full swing, each accusing the other of lying about why ADP cut off Zenefits customers from using the Zenefits software with their ADP payroll accounts.
At issue is whether Zenefits needed an agreement with ADP to act as a payroll administrator. Zenefits says it was following the same rules as every other hired-hand payroll admin and ADP cut off its customers as a competitive move because it wants to offer a competing product.
ADP says Zenefits should have worked out a deal with ADP and has accused Zenefits of improperly accessing sensitive information from its computers (a claim Zenefits vehemently denies).
But the battle has taken the form of startup vs. established company with the startup waging a war of public opinion through social media. Zenefits has even started an internet petition and its Hollywood star investor, Ashton Kutcher, has tweeted public support for Zenefits to his 17 million followers.
The legacy company responded with a lawsuit.
In turn, Zenefits is trying to get the lawsuit dismissed under California’s “anti-SLAPP (Strategic Lawsuits Against Public Participation)” statute, intended to protect freedom of speech by stopping defamation lawsuits from being used as weapons to harass outspoken critics.
On Tuesday, ADP filed its own motion, asking the court not to dismiss the lawsuit and arguing the anti-SLAPP law doesn’t apply.
In other words, the legal war wages on. And, for what it’s worth, the internet petition now has 2,300 signatures.
Here’s the motion filed by ADP
Zenefits’ vice president of litigation lawyer Joshua Stein had this comment about the motion and the claims ADP is making:
“ADP continues to make the same arguments without providing any new evidence. The facts are that Zenefits uses the same secure connection to ADP that accountants, bookkeepers, and HR services firms use for their clients. ADP decided to limit small business choice in response to the popularity of Zenefits. Once we brought this to light, ADP sued us for defamation. This is a transparent attempt to intimidate and silence a smaller, more innovative competitor. Zenefits will continue to speak out in favour of small businesses and their right to choose how they run their companies. We call on ADP to do what’s right for customers, stop clogging up the courts with frivolous litigation, and compete fairly in the marketplace.”