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ADP Sues Zenefits for Defamation

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Re: ADP Sues Zenefits for Defamation

#11

Post by BinaryIdiot »

kirinan wrote: post #3

This won't end well for Zenefits. Its not quite a deathknell for them, but there is zero case where Zenefits doesn't settle outside of court or loses the case. They will need to spend time/resources to raise another round and fight the chance that ADP doesn't build a competitor them in the mean time. This is the kind of momentum shifter that kills startups.

Yeah I agree; even if Zenefits is 100% in the right here ADP has the resources to drag this out for quite some time and cost them a very large amount of money. If Zenefits is in the right I wonder if they can produce evidence and try to use SLAPP regulation (not sure if that works for companies but then again companies are people, right?). I'm obviously not a lawyer :)

Re: ADP Sues Zenefits for Defamation

#12

Post by ceejayoz »

DannyBee wrote: post #8
kirinan wrote: post #3

This won't end well for Zenefits. Its not quite a deathknell for them, but there is zero case where Zenefits doesn't settle outside of court or loses the case. They will need to spend time/resources to raise another round and fight the chance that ADP doesn't build a competitor them in the mean time. This is the kind of momentum shifter that kills startups.

ADP will lose this lawsuit very quickly

ADP's legal department is likely larger than Zenefits itself, and well funded. They can probably drag it out for quite a while.

Re: ADP Sues Zenefits for Defamation

#13

Post by DannyBee »

Reading the complaint, ADP is not likely come close to winning.

The defamation they claimed happened is that Zenefits "alleged that ADP intentionally sought to cause harm to ADP’s clients solely to gain an unfair competitive advantage against Zenefits.”

Even if you argue this is defamation per se (and not per quod), about a matter of private concern, they'd still have to prove "4. That [name of defendant] failed to use reasonable care to determine the truth or falsity of the statement(s).

"

(california jury instructions for this charge will be here: https://www.justia.com/trials-litigation/docs/caci/1700/1704...)

There is a near 0% chance they can prove a lack of reasonable care here. Plus, they open themselves up to discovery on any memos, etc they've written about this decision internally, which almost certainly show the statement is truth.

Note the above is the best case. If it's determined to be a matter of public concern, or defamation per quod, ADP's chances go down.

Re: ADP Sues Zenefits for Defamation

#14

Post by protomyth »

boomzilla wrote: post #9

Is this the same CEO who said in Quora to the effect of: if you have to ask how it's like to work here, you won't fit in here?

Are you referring to this http://www.quora.com/What-is-the-best-way-to-start-my-career... answer by Benefit's CEO? I'm not sure of the connection between that and this story. I guess you could be going for a reckless attitude in one area might translate to lawsuits in another area?

Re: ADP Sues Zenefits for Defamation

#15

Post by Someone1234 »

tdees40 wrote: post #4

The descent into lawsuits is pretty sad. When customers hate your product (i.e. the ADP front-end) so much that an entire company forms around making something less terrible, you really have to look at yourself in the mirror. I continue to be amazed by the horribleness of benefits web front-ends. I recently did a simple task in our Hewitt system, and it required five pop-up windows. It's just so, so terrible.

> When customers hate your product (i.e. the ADP front-end) so much that an entire company forms around making something less terrible, you really have to look at yourself in the mirror.

Is this really accurate? Doesn't Zenefits exist to merge several services, only some of which ADP provide? And while many people have said that ADP's front end is bad, it seems like you've taken those claims a step further by claiming that people only pay Zenefits to avoid having to use it (rather than cross-platform integration which is their real purpose).

Re: ADP Sues Zenefits for Defamation

#16

Post by DannyBee »

ceejayoz wrote: post #12
DannyBee wrote: post #8

Earlier quoted context omitted.

ADP will lose this lawsuit very quickly

ADP's legal department is likely larger than Zenefits itself, and well funded. They can probably drag it out for quite a while.

Maybe? This is an oft-repeated claim, but my experience tells me differently.

Contrary to popular tv shows, there is only so much that can happen. Lawsuits drag on whether someone is trying or not :)

Barring some outliers, the difference between lawsuits that are dragged out and ones that aren't is not a factor of 10, it's probably a factor of 1.2.

State court is kind of a crapshoot, for sure. But you are super-unlikely to get away with this stuff in federal court (which is where ADP filed).

Most federal judges get tired of this stuff very quickly, and start sanctioning.

Re: ADP Sues Zenefits for Defamation

#17

Post by realityking »

rubiquity wrote: post #7

If Zenefits isn't happy that they can't access ADP's payroll info on behalf of their customers then why doesn't Zenefits spin off a payroll service and attack ADP from that angle? Maybe Zenefits could name it ZenPayroll. Oh wait...

These are two different companies, they just have the first tree letters of their names in common. Just like ZenDesk.

Re: ADP Sues Zenefits for Defamation

#18

Post by lukeschlather »

CPLX wrote: post #5
tdees40 wrote: post #4

The descent into lawsuits is pretty sad. When customers hate your product (i.e. the ADP front-end) so much that an entire company forms around making something less terrible, you really have to look at yourself in the mirror. I continue to be amazed by the horribleness of benefits web front-ends. I recently did a simple task in our Hewitt system, and it required five pop-up windows. It's just so, so terrible.

It seems to me that being in business for 65+ years and being the undisputed market leader in an industry and then having an incredibly well funded software company with hundreds of employees siphon off only 600 of your customers isn't necessarily a moment for self reflection. I've used ADP myself as a startup founder. Yeah the interface is annoying. So is Craigslist, whatever. That line of argument isn't necessarily…

Has anyone at ADP been there 65 years? It looks to me like the current CEO started about 15 years ago.

I would say if you have as much power as ADP does, everything that happens is a moment for self-reflection.

Re: ADP Sues Zenefits for Defamation

#19

Post by olafskyansian »

I have a lot of respect for what Zenefits has done to date in shaking up the insurance space, but you have to REALLY question what the heck is going on with Parker's leadership there.

What is going on that the founder/CEO has enough time to chastise an engineer candidate on Quora and put out factually inaccurate posts on topics like healthcare reform (he had something out on LinkedIn a few weeks back) but doesn't have the foresight to build a "real" integration with a payroll vendor that has one available (and an established track record of integrating with competitors in many cases mind you).

You read the glassdoor reviews of Zenefits and you get this picture where no one knows what they are doing. All symptomatic of a company in hyper-growth mode, I get that. The questions becomes, does Parker have the leadership chops to see this through?

Re: ADP Sues Zenefits for Defamation

#20

Post by dopamean »

realityking wrote: post #17
rubiquity wrote: post #7

If Zenefits isn't happy that they can't access ADP's payroll info on behalf of their customers then why doesn't Zenefits spin off a payroll service and attack ADP from that angle? Maybe Zenefits could name it ZenPayroll. Oh wait...

These are two different companies, they just have the first tree letters of their names in common. Just like ZenDesk.

It was a joke dude.
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