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Ex-worker claims the company demanded trade secrets about Facebook and lied about its finances
The social sharing platform Snapchat is being sued by a former employee who claims the company misrepresented its finances while recruiting him and then insisted he divulge Facebook's proprietary information, which he refused to do.
Anthony Pompliano was fired after working for three weeks at Snapchat in 2015, according to The Los Angeles Times, which was the first of many publications to report the lawsuit. He was an employee in the social networking site's business operations department.
In court papers filed in early January, Pompliano alleged that Snapchat has lied about the reasons for his termination to his prospective employers, which has made it difficult for him to find another job in the social networking field.
He was fired from Snapchat, the lawsuit states, "because he refused to participate in a scheme to deceive the public and artificially inflate Snapchat's valuation in anticipation" of its first public stock offering. Pompliano's suit also states that he declined to give Snapchat information about his former employer, Facebook.
In a statement issued by Los Angeles-based Snap Inc., which operates Snapchat, company spokeswoman Mary Ritti said the complaint was without merit.
"It is totally made up by a disgruntled former employee," she said.
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The Los Angeles Times reported, "Snap Inc. … recently began talking to investors about its plans to publicly list shares as early as March. The IPO [initial public offering] could value Snap at more than $25 billion while raising around $4 billion." Snapchat would then be more than twice the value of Twitter, according to financial education website Investopedia. More than 150 million people use the Snapchat mobile app daily to view videos and photos from friends, companies, news sites and other entities.
"Driven by its fierce rivalry with Facebook—spurned suitor turned keen competitor—Snapchat fraudulently induced Mr. Pompliano away from Facebook to run Snapchat's new user growth and engagement team by falsely representing to him, among other things, the company's growth," the lawsuit states. The suit also states he was fired because he was "incompetent."
Pompliano's 21-page filing was reportedly made in the Los Angeles County Superior Court. Several pages were redacted. Pompliano's attorney, David Michaels of Kilometer Partners LLP in Los Angeles, told The Times that portions of the lawsuit were blacked out to shield information that was part of a confidentiality agreement between his client and Snap, including two statistics Pompliano says Snap gave him before he was hired that Pompliano claims are false.
Had he passed along information about Facebook to Snapchat, Pompliano could have risked running afoul of federal law. Last year, President Barack Obama signed into law the Defend Trade Secrets Act of 2016 (DTSA), "which amends the Economic Espionage Act of 1996 to provide a federal cause of action to private companies for trade secret misappropriation," according to the National Law Review website.
As the Society for Human Resource Management reported when DTSA became law last May, HR must be vigilant when training employees "about what constitutes a trade secret and how trade secrets are protected."
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