January 29, 2012

Former Groupon Employees Countersue Daily Deals Website

Three former Groupon sales representatives who have been sued by the world's largest coupon website have countersued their former employers, accusing them of using strong-arm tactics in order to bully employees and keep them from joining rival services.

According to Jonathan Stempel of Reuters, Groupon filed a complaint against former sales managers Nikki Dorough, Brian Hanna and Michael Nolan on October 21 of last year.

The Chicago, Illinois-based daily deals website accused the three former employers of leaking confidential information about business practices when they joined the start-up Google Offers service late last year.

Lawyers for Nolan and Hanna filed documents in an Illinois state court last week, claiming that the Groupon was using "'sham litigation' in order to silence employees, to bully and silence employees and obtain intelligence on a burgeoning competitor," Bloomberg's Sophia Pearson wrote on Friday.

Dorough was not mentioned by name in Bloomberg's report.

“In its stop-at-nothing strategy to take itself public and further enrich its founders, Groupon has crossed the line,” those lawyers told Pearson. “This counterclaim seeks to put an end to that abusive and illegal behavior.”

Furthermore, Stempel reports that, in the complaint, the workers were attempting to prevent employees from joining rivals, all while attempting to "cash in" as a result of its then-upcoming and highly anticipated initial public offering.

"The message is clear: don't leave Groupon and if you do, don't attempt to use any of the skills and experience you may have developed while working for us," the workers, all of whom are in their mid-20s and claimed to have decided on their own to seek employment with the start-up Google service, were quoted by Reuters as saying.

The three former Groupon employees are seeking compensatory damages citing claims of interference with their current employment, punitive damages, and annulment of their no-compete clauses.

Groupon spokeswoman Julie Mossler told Stempel that the accusations "have no merit" and that the company, which went public in November with an IPO of $12.8 billion -- the largest for an American Internet firm since Google in 2004 -- remained "confident of our case."

"According to Groupon, the workers violated a clause in their employment agreements that barred them from working for a direct competitor for two years after leaving," the Reuters reported said. "The workers believe that clause is unenforceable and unnecessary as none had access to confidential, sensitive or proprietary information."

"They also contended that Groupon is using them as a 'prop,' having served a subpoena to Google not simply for information to help its case, but also to 'obtain intelligence on a burgeoning competitor' in an effort to preserve market share," Stempel added.


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