The online coupon and daily deals company, Groupon, has sued two former sales executives in a breach of contract case and claims the executives will eventually apply confidential information gained from their time at Groupon to their new positions at Google Offers. Google Offers is a similar internet-based daily deals site created by Google.
Groupon sued the two former sales executives arguing the two workers will eventually disclose trade secrets relating to how Groupon structures and prices deals. The daily deals company also believes the former workers will reveal Groupon’s sales and marketing strategies as well. Groupon claims the information will allow Google Offers to immediately compete against Groupon which regards itself as “the innovator of deal-of-the-day websites.”
In November 2008 Groupon began in Chicago and has expanded since that time to 175 markets across North America and to 43 different countries. Groupon has faced rising competition from similar deal sites including Google Offers, but Groupon remains the market leader in online deal sites.
Groupon claims the two former sales executives breached their employment contracts, which prohibited them from working for a competitor for two years. Under the contracts Groupon argues the former employees agreed to protect confidential information for 24 months after leaving the company. The two former employees left Groupon in September to join Google Offers. Groupon argues Google Offers attracted the workers by offering more pay.
Google Offers was created after Groupon rebuffed Google’s offer to purchase Groupon for $6 billion last year. Groupon is slated for an initial public offering some time this year and hopes to raise $540 million. Google is not a party to the lawsuit.
Source: courthousenews.com, “Groupon sues execs who fled to Google,” Iulia Filip, Oct. 26, 2011