War Between Startup Zenefits and Automatic Data Processing (NASDAQ:ADP) Goes On

The public war between HR software startup Zenefits and its partner/competitor payroll giant Automatic Data Processing (NASDAQ:ADP) is going on in full scale, each is charging the other of lying about why ADP shut off Zenefits customers from utilizing Zenefits software with their ADP payroll accounts.

According to ADP, Zenefits should have come to an agreement with ADP. It has charged Zenefits of improperly accessing sensitive data from its computers, a charge that is denied by Zenefits.

The fight has become similar to that of startup versus established company with the startup engaging in a war of public opinion via social platforms. Zenefits has initiated an internet petition and its Hollywood actor-investor Ashton Kutcher has expressed public support for the company to his 17 million followers on Twitter.

ADP has retaliated with a lawsuit. Zenefits, on the other hand, is attempting to have the lawsuit dismissed under California’s anti-SLAPP (Strategic Lawsuits Against Public Participation) statute. The latter was for the purpose of protecting freedom of speech by preventing defamation suits from being utilized.

On Tuesday, ADP filed a motion requesting the court not to dismiss the lawsuit and making the case that the anti-SLAPP law doesn’t apply.

Zenefit’s Vice President of litigation lawyer Joshua Stein made the following comments on ADP’s motion and claims. According to him, ADP is continuing to make the same arguments without giving any new evidence. The truth is Zenefit utilizes the same secure connection to ADP as accountants, bookkeepers and others utilize for their clients.

As a result of the popularity of benefits, ADP decided to restrict small business choice. Once Zenefits disclosed this fact, ADP sued it for defamation. This is a blatant attempt to intimidate and silence a smaller more innovative company. Zenefits will continue defend small businesses and their right to run their operations. We ask ADP to do the right thing for customers’, discontinue frivolous litigation and compete in a fair manner in the market.

Sources: fortune, businessinsider