Payroll services giant ADP yesterday agreed to drop its defamation lawsuit against Zenefits, giving the HR startup company a win in a months-long dispute fought in the public eye.
The dispute between the two companies ignited in June when ADP disabled Zenefits’ access to its systems for shared clients citing “data security concerns” (more specifically, Zenefits’s tendency to reuse one viable portal on ADP and make that portal accessible to hundreds of their own clients while still paying for only that single portal, weighing down almost a third of ADP’s available bandwidth). Not quite the best business practice on either end.
Zenefits CEO Parker Conrad took to the company blog to express his disappointment, and was correct in his assumptions that the disabled service was related to an upcoming ADP tool meant to compete directly with Zenefits.
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.”
Zenefits’ subsequent motion to dismiss the anti-defamation lawsuit characterized the quarrel as one between an old-school industry figurehead and the tech-savvy new kid on the block.
At a Sept. 24 motions hearing, U.S. District Court Judge Vince Chhabria identified that both parties were wasting his time, saying, “The primary question in this case is whether the lawsuit will die a slow death or a fast death…” The lawsuit was quickly moved through to an amenable conclusion. ADP agreed to drop its lawsuit against Zenefits as part of a larger settlement between the two parties.
We are happy to hear it. These bloated businesses are a hell of a sink on news outlets if nothing else.