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PayPal sues Google for hiring away executive in the midst of negotiations

On May 29, 2011, in Cloud Computing, Employees, Litigation, by Jorge Espinosa

There is an old Cuban saying “dime con quien andas y te diré quien eres” which translates to “tell me who you hang out with and I will tell you who you are.”  It seems that these days being identified as an Internet company does not say much good about you.  Just a week after Facebook was found planting stories with bloggers against Google, PayPal has filed suit alleging that Google reneged on a deal by hiring away PayPal’s employees.

PayPal is a well-known on-line payment service.  Google is the internet services behemoth offering services which span everything from search engine, to office suite, to e-mail, to social networking.  PayPal filed suit against Google, a former officer of eBay and a former officer of PayPal before the California Superior Court for San Mateo County (a Court that the cloud blogger has appeared before).

The Complaint alleges misappropriation of trade secrets, breach of contract, interference with a contractual relationship and breach of fiduciary duty.  It tells how Google approached PayPal and negotiated for two years to have PayPal provide payment services for Google mobile devices.  On the eve of signing the deal, Google backed out and hired away the PayPal executive who had been negotiating on behalf of PayPal, Osama Bedier.  According to the complaint, Stephanie Tilenius, a former a former eBay executive and named defendant in this suit solicited Mr. Bevier and induced him to join Google.  After joining Google, Bedier also solicited and tried to lure away other PayPal employees.

According to the complaint:

[F]rom 2008 to 2010, Google and PayPal were negotiating a commercial deal where PayPal would serve as a payment option for mobile app purchases on Google’s Android Market.   During that time PayPal provided Google with an extensive education in mobile payments.  [Defendant] Bedier was the senior PayPal executive accountable for leading the negotiations with Google on Android during this period.  At the very point when the companies where negotiating and finalizing the Android-PayPal deal, Bedier was interviewing for a job at Google – without informing PayPal of this conflicting position.

Supposedly, Google used Mr. Bedier’s knowhow to craft its new mobile wallet mobile payment strategy which Google announced on May 26, 2011, the date the suit was filed.