According to court documents filed in the State of Washington, a lawsuit has been filed by the National Association of Realtors (NAR) and Move, Inc. (operator of realtor.com, Top Producer, SocialBios, ListHub, and several other companies) against Zillow, Inc. and Errol Samuelson.
The suit alleges breach of contract, breach of fiduciary duty, and misappropriation of trade secrets. In a statement, Steve Berkowitz, CEO of Move said, “we take our trade secrets and intellectual property extremely seriously as a valuable asset in our competitive position in the marketplace. We take action in cases in which we believe our trade secrets have been compromised. We have raised this matter for the courts and believe that the matter will be resolved judiciously.”
When Errol Samuelson, former president of realtor.com and Chief Strategy Officer at Move, Inc. left to become Zillow’s Chief Industry Development Officer, reactions ranged from criticism of Move, calling it a poaching of talent, to a criticism of Samuelson, calling it a betrayal to the industry as NAR members own and have an operating agreement with Move (which competes with Zillow).
Lawsuit alleges that Samuelson destroyed evidence
Court documents state that “Each quarter that he was employed by, and an officer of, Move, Mr. Samuelson certified in writing that he had read, understood, and would abide by Move’s Code of Conduct and Business Ethics,” which includes a “Conflict of Interest” clause and forbids employees from releasing proprietary and confidential information during and after his employment.
Further, the suit states that Samuelson arranged to defect to Zillow, destroyed evidence by erasing all memory from the iPhone, iPad, and laptop issued to him for business purposes by Move, and then resigning from Move without notice.
Last week, we also questioned the timing, wondering if it was designed to hurt Move, Inc. company stocks, or benefit Zillow in some capacity, which Move and NAR clearly agree with via their lawsuit.
The truth is that during his tenure at Move, Samuelson was promoted to a position that was so encompassing, that his job entailed knowing the inner workings of Move companies as well as the National Association of Realtors. The role will not be filled as it once was, rather remain broken into parts and functions will be filled by various people.
Samuelson isn’t the only one
Don’t consider this the last lawsuit to be filed, as Zillow announced today that Samuelson’s replacement, Curt Beardsley jumped ship today as well to become Zillow’s Vice President of Industry Development.
Also, this probably shouldn’t be considered the last high ranking official that will leave for Zillow in this apparent coup – their pockets are deep and they’re clearly willing to use their assets. Next quarter’s SEC filings will shed more light on just that.
This story was originally published on AGBeat on March 17, 2014.