ADP Sues Zenefits for Defamation
J Thoendell stashed this in Tech
A conflict between one of the biggest providers of corporate payroll services and one of the world’s most highly valued startups spilled into court on Tuesday. Payroll provider ADP filed a lawsuit accusing Silicon Valley high-flier Zenefits of defamation.
The dispute started when ADP blocked Zenefits from accessing payroll information on behalf of the startup’s customers, some of whom use the company as a middleman for the payroll provider’s services. The companies disagree on the circumstances that led to ADP’s action, and they have waged in a bitter war of words this week.
The disagreement escalated with the lawsuit, filed with the U.S. district court in San Francisco. ADP’s complaint said Zenefits and its chief executive, Parker Conrad, launched a “manipulative and malicious public relations campaign, ignoring its own conduct, to defame ADP and drive away ADP’s clients.” ADP also said Zenefits defamed the payroll giant when it “alleged that ADP intentionally sought to cause harm to ADP’s clients solely to gain an unfair competitive advantage against Zenefits.”
The lawsuit shines a spotlight on an obscure but highly profitable corner of corporate technology. A growing number of companies are vying to provide access to payroll processing, handle insurance-benefit applications and provide other human-resources services to companies large and small. The dispute between ADP and Zenefits shows the hardscrabble nature of the battle for corporate tech dollars.
The fight stems from Zenefits’ role as an intermediary for some of ADP’s small-business clients that use a payroll system called ADP RUN. Zenefits provides access to ADP for what Zenefits says is about 600 of its business customers that also use the ADP payroll system.
Stashed in: Silicon Valley!