Groupon sues ex-employees for trade secret theft

Reuters reports that Groupon has sued two ex-sales managers for taking confidential trade secrets over to Google:

Michael Nolan, who worked for Groupon for two years, and Brian Hanna, who joined the Chicago-based company in January, each left last month to join Google Offers, according to a civil complaint filed yesterday in an Illinois court. Google, based in Mountain View, California, isn’t named in the suit.

“In their new positions with Google Offers and/or Google, Hanna and Nolan will provide the same or similar services as they provided at Groupon,” requiring them “to employ confidential and proprietary information that they learned while employed at Groupon,” according to the complaint.

Having represented my fair share of clients in their negotiations with Groupon, where fairly public info like company names and addresses are exchanged between the parties, it will be interesting to see what Groupon asserts to be “trade secret”. Given the traditionally limiting view courts take on trade secret litigation (a plaintiff needs to prove that what was taken is an actual “secret”), I am not sure that defendants here were privy to anything more than could be looked up in the local Yellow Pages.

On the other hand, the interesting twist:

Last year, Groupon rejected a $6 billion buyout offer from Google.

So perhaps Groupon will argue that defendants were privy to certain operational and marketing plans that would give Google an advantage over its competitor. In all likelihood (and this is not to disparage Groupon which delivers an excellent service to consumers and small businesses alike), Groupon’s operations are not exactly rocket science — they provide bulk order discounts online — and I think it fairly unlikely that the company would be able to convince the court that its success relies on any particular trade secret vs. simply being one of the first to capture its part of the market.