Lyft, Uber Dispute Highlights Need to Safeguard Confidential Information

By Allen Smith Dec 8, 2014
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A key document that should be signed at an exit interview is the termination certification, according to Bob Yonowitz, an attorney at the Irvine, Calif., office of Fisher & Phillips. A comprehensive exit interview will include asking the departing employee for the return of all paper and electronic information in his or her possession and a certification that he or she has returned it, he told SHRM Online.

Lyft was unable to get its departing chief operating officer to sign the termination certification, according to its Nov. 5, 2014, complaint against Travis VanderZanden, who left to go to Lyft’s main competitor, Uber. Lyft claimed that VanderZanden breached its confidentiality agreement.

When there is a confidentiality agreement, there typically is a termination certification during the exit interview, Yonowitz noted.

But VanderZanden refused to sign it. If signed, a termination certification shows that a company took reasonable efforts to keep its confidential information secret, Yonowitz observed.

98,000 Files Downloaded

Instead, in the months and days before VanderZanden announced he was resigning on Aug. 12, 2014, he allegedly synchronized his personal Dropbox account to his Lyft laptop. His personal Dropbox account eventually contained more than 98,000 files and folders, including a significant number of Lyft’s most sensitive documents.

Documents found by forensics in his personal Dropbox included: Lyft’s historic and future financial information and strategic planning materials like marketing plans and product plans, customer lists and data, international growth documents and private HR information.

Forensic evidence established, according to Lyft, that VanderZanden systematically uploaded confidential and proprietary company documents to his personal Dropbox account and backed up his work e-mails and contacts to his personal computer and his iPhone.

Phone Sold

Soon after his resignation, VanderZanden allegedly sold his phone. He didn’t explain why he chose to sell his phone, which Lyft called “an odd thing for a high-net-worth individual to do. It was likely to cover his tracks and dispose of evidence of his misdeeds.”

Companies should consider whether they want employees using their own phones on company business, or whether they want to give the employee a business phone, Yonowitz noted. If giving employees a business phone, don’t forget to retrieve it at the end of employment, in addition to any company laptop, he reminded.

When Lyft sent an employee to VanderZanden’s home to retrieve the laptop computer, he handed over the computer. But he e-mailed Lyft later, slamming it for “stalking” the computer and accusing the company of trying to pick a fight with him, the complaint maintains.

VanderZanden also unlawfully solicited and attempted to solicit Lyft employees to leave, the company said. Stephen Schnell, vice president of operations at Lyft, left to work at Uber. So did Ryan Fujiu, another employee that VanderZanden allegedly encouraged to resign around the same time.

Real-Time Knowledge

When it comes to protecting files, a lot of computer forensics in the future may be conducted in tandem with keystroke surveillance software that keeps a running record of everything employees do on work computers, Yonowitz said. If employees try to download company files onto another platform, alarms in the system would be set off and the employer would “find out in real time,” he remarked.

In court documents opposing a temporary restraining order, VanderZanden’s attorneys said he has not misused Lyft’s confidential information.

“Lyft’s proferred evidence is lacking in two fundamental respects: there is no evidence that Mr. VanderZanden was prohibited from having Lyft data on personal devices or that he used or disclosed any information to anyone post-employment,” his lawyers said. “Mr. VanderZanden’s declaration submitted herewith establishes the contrary propositions: Lyft permitted Mr. VanderZanden to possess Lyft confidential information on personal devices, and Mr. VanderZanden has not used or disclosed any of Lyft’s confidential information.”

VanderZanden also tweeted, “Lyft’s PR has lost it. The allegations in their complaint are ridiculous.” He added, “Just to be crystal clear, I did not take any confidential data to Uber.”

Regardless, Yonowitz suggests that another lesson from the litigation is that employees should not be given too much access to company information, but instead “only need-to-know access.”

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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