ADP Sues Zenefits for Defamation

The health insurance and benefits industry needs innovation, badly, but as one person said on this thread, don't bite the hand that feeds you. The Hub and Spoke model that Parker often refers to will not work if you are too aggressive with trying to force (your version) of change on these companies you have no choice to work with in some capacity. Disruption is one thing, destruction is another.

There's a lot of focus on Zenefits bombastic personality, and the whole "we're gonna drink your milkshake" rhetoric. That will scare huge incumbents into moving into very defensive positions quickly. Offering to spend $600,000 getting companies to drop ADP in favor of Intuit or another payroll company doesn't help either.

One thing I find curious was that I thought that Zenefits had 10,000+ businesses using the service as of three or four months ago. According to what's been reported, 600 ADP connected business have been cut off, which was stated as being 10% of their total business. That math doesn't back out.

>The client paid for ADP access and has every right to use whatever means they deem necessary to input or output data from the ADP system.

Surely ADP has a superseding right to determine how information enters and leaves their system? I'm not suggesting that's good or bad, just pointing out that it's their system, being a customer doesn't give you carte blanche to do whatever you like.

Hell, look at what happened to Aaron Swartz.

From the Zenefits CEO in Emails to customers (calling ADP unethical for protecting their customers data):

When you originally set up Zenefits, you created an Zenefits admin user in your ADP RUN payroll account to let Zenefits manage your payroll—set up new employees, manage deductions, remove departing employees—on your behalf.

Yesterday, without your permission, ADP systematically deactivated these accounts—accounts that you set up, in your payroll system, to allow Zenefits to work on your behalf. The reason for this is that ADP believes it can one day build software to compete with Zenefits, and in the meantime they would like to do anything they can to impede Zenefits.

ADP is claiming that they are taking this action for “security” reasons—but this is clearly not true. For years, ADP has let customers add third parties—a bookkeeper or an accounting firm, for example—to their payroll system to manage payroll on a company’s behalf. What Zenefits does is no different. In fact, even today, ADP will let you add a third-party administrator to your payroll system unless they have a Zenefits.com email address.

What’s high-handed about their approach is that Zenefits is still completely compatible with ADP payroll. All they’ve done is make it more inconvenient for you, their customer.

By default, we will start emailing you whenever there are changes that need to be made to your payroll system. We will detail exactly the changes that need to be made, and you can make them yourself in payroll. It’s less convenient this way — and frustrating that ADP has decided to create more work for their own clients in order to attack Zenefits. But beyond this, nothing will interrupt your use of Zenefits.

We are also working on other options for restoring automated payroll. Zenefits’ mission is to make running your business as effortless as possible, and our support team will follow up shortly with additional information on how to resolve this issue.

We think it’s outrageous—and unethical—that ADP is making these changes to your payroll system without your permission, and is creating this complication for you in their attempt to block Zenefits’ service—essentially treating you like a pawn in their corporate chess game.

If you’re as upset with ADP as we are, you can sign this Change.org petition. In addition, if you’re interested in switching from ADP payroll to Intuit Payroll, we’re paying customers $1,000 and helping them to make the switch. We’ll include instructions for this in our follow up communication.

We remain committed to working with ADP to find a solution to make this problem go away for all our mutual clients. In the past, we’ve directed many payroll customers to ADP, because payroll is not a service we provide. We’ve tried contacting them, but so far they have refused to return our calls. If they have any genuine concerns, we are happy to resolve them, but they have yet to express them to us.

Really? I would have kept my mouth shut and not removed doubt about my foolery.

Of course nothing lasts forever, however it's somewhat a bad sign to a see an employee actively planning their next move, before they've even accepted an offer. It shows the applicant may be more concerned about career path than they are in doing an excellent job for their current employer. It might be an outdated or romantic view of work, but the ideal situation (employes and ownership working towards a shared goal) is still worth striving for.