Zenefits has filed a motion to dismiss an anti-defamation lawsuit filed against it by payroll services giant ADP, continuing a heated row between the two companies that Zenefits says comes down to a a fight for consumer choice.
The dispute between the two companies ignited in June when ADP disabled Zenefits access to its systems for shared clients. Zenefits publicly decried the move, calling it an anti-competitive fear tactic and ADP fired back with an anti-defamation lawsuit accusing the HR tech firm of conducting a manipulative and malicious public relations campaign, ignoring its own conduct, to defame ADP and drive away ADP clients.
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In court filings Monday and Tuesday, Zenefits said ADP cannot establish a probability of success on the merits of these claims that the HR tech company defamed ADP and unfairly damaged the payroll companys business. Zenefits says the companys public criticisms of ADP are permitted under California law and the U.S. Constitution. The company filed the motion to dismiss under Californias anti-SLAPP statute (strategic lawsuits against public participation.)
In the court filings, the HR tech company accuses ADP of trying to silence it and its CEO Parker Conrad about ADPs anti-competitive tactics.
Were on the side of consumer choice and were not going to stop speaking out about that, David Sacks, COO of Zenefits, said in televised comments about the lawsuit.
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ADP has been out there creating fear about us as a new market entrant and now theyre suing us for defamation. Thats highly ironic, he said.
Dick Wolfe, senior director of corporate communication for ADP says, ADP has a long history of partnering with third parties, including those who could be considered competitors. The notion that Zenefits was blocked to stifle such competition is simply wrong. Legal action against Zenefits was not undertaken lightly, and came only after ADP made attempts to resolve these issues directly and amicably with Zenefits. Those efforts were rebuffed and Zenefits embarked on a public campaign of false statements and outright defamation, which they have continued to engage in even after the filing of the lawsuit.
Client impact
In June, Zenefits CEO Parker Conrad said Zenefits clients are frustrated with the disabling of access to ADPs payroll service system and some clients say they will drop ADP. Likewise, he said, Zenefits may lose a few customers, too, before the row is worked out.
He says Zenefits is helping current clients with a workaround to help them manually enter the data that Zenefits no longer has access to do.
Zenefits is also helping some clients switch to new payroll service providers.
