Legal

Zillow Sues Competitor Compass Over IP Theft

Zillow To Offer Mortgages For Homebuyers

Zillow has filed two lawsuits against Compass, accusing its rival of stealing Seattle-based Zillow’s intellectual property, as well as hiring employees who violated their non-compete agreements.

The suits, filed in Washington state court and federal court, state that three Zillow employees — Robert Chen, former head of machine learning; Michael Hania, a former enterprise sales executive; and Chester Millisock Jr., a former software engineer — were hired by Compass, despite the fact that they had signed contracts that included 12-month non-compete and non-disclosure clauses.

In addition, Zillow alleges that the employees stole trade secrets and confidential information, including customer lists, sales data, and technical info, before they moved over to their new roles at Compass.

“This calculated theft was designed by Compass to help it better compete with Zillow in the marketplace, at Zillow’s expense, and so Compass could avoid the expense of independently developing valuable machine learning and other technologies,” reads the federal lawsuit involving Chen, according to Geek Wire.

The lawsuit comes after New York-based Compass opened a West Coast engineering outpost in Seattle in December 2018.

“In December 2018, Compass publicly announced the launch of a product and engineering hub in Seattle to directly compete with Zillow in the highly competitive technology sector focused on simplifying the home buying and selling process. It then initiated a campaign to recruit Zillow employees,” the federal lawsuit states.

Zillow added that not only has Compass engaged in similar “unlawful poaching of its competitors’ employees,” but that it is also a “direct competitor.”

Zillow is seeking monetary damages, as well as an enforcement of the non-compete clause for Chen. The company also wants to prevent Hania and Millisock Jr. from sharing any of its confidential information.

“You cannot break a non-compete by leaving to go to a company that does not compete with you. With hundreds of engineers and hundreds of sales people, it’s unfortunate that losing three individual contributors would result in using scare tactics to intimidate current employees from leaving. Compass has never asked and would never accept any trade secrets. A number of years ago Compass abolished non-competes for anyone that we hired as we believe that people should work at Compass because they want to, not because they are forced to,” a Compass spokesperson said in a statement.

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