Zillow is alleging that Compass engaged in intellectual property theft and pilfered three of its former staff, filing two lawsuits late last week, according to media reports.
The three employees, Robert Chen, Michael Hania and Chester Millisock Jr., were bound to non-competes for 12 months, but according to Zillow, those agreements have been violated. Based on LinkedIn timelines, both Chen, formerly senior director of Machine Learning Engineering, and Millisock, Jr., a former software engineer at Zillow, departed Zillow last month. Hania, a former enterprise sales executive, began at Compass as strategic growth manager in June of last year, exiting Zillow at that time.
Additionally, Zillow is alleging that the employees stole trade secrets and other confidential intel. According to one of the complaints, filed in King County Superior Court in Washington, Compass recruited Hania and Millisock “in order to obtain confidential and/or proprietary Zillow information from them…[including] confidential customer lists, financial information, sales data and highly technical information.” According to the other, filed in federal court, “Chen used improper means to take proprietary trade secret information from Zillow prior to his departure and for the benefit of Compass.”
“[Zillow] supports healthy competition to drive innovation,” according to a spokesperson at Zillow Group. “Compass’s practices are something different; they are unlawful, and because we have a responsibility to protect our intellectual property, we are taking action. We take seriously the agreements Zillow Group makes with its employees, and we work to fairly and completely enforce those agreements when we believe they are violated.”
In one complaint, Zillow asserted that Compass is a “direct competitor.”
In an official statement on the suits, Compass said:
“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 salespeople, 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.”
“We have explicit language in our employee agreements that states employees must honor their prior firms’ confidentiality obligations.”
Compass has been building what it has described as an “end-to-end platform” for real estate, recently acquiring Contactually, a cloud-based CRM, and expanding its engineering operations to Seattle, where Zillow is also headquartered. In 2018, the brokerage garnered $45.5 billion in sales volume, according to RISMedia’s 2019 Power Broker Report, making in No. 3 in the nation for volume.