NetApp Files Suit Against Nimble, Alleges Competitor Stole Employees, Information

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NetApp filed a complaint this week against Nimble Storage, alleging that Nimble encouraged NetApp employees to join the company and to bring confidential information with them, according to a report Friday by The Register.

In the filing, NetApp claims that 15 percent of Nimble’s total workforce is made up of former NetApp employees, including half of its executive team. According to a report by The Recorder (subscription), Nimble’s employee count rose from 40 to 230 in one year. In July 2013 alone, Nimble hired 55 employees away from NetApp, according to the suit.

“Nimble Storage has a complete commitment to ensuring ethical behavior and [a] culture of adhering to a strong set of values across our employee base,” Dan Leary, vice president of worldwide marketing told The Recorder. “We will investigate these claims and vigorously defend any claims that are false and unsubstantiated.”

According to NetApp, three Nimble employees have breached contractual post-employment restrictions by allegedly disclosing confidential NetApp information to Nimble. The suit alleges that Nimble is using “illegally-acquired information to compete directly against NetApp in the marketplace.”

Former NetApp partner Michael Reynolds, and former employees, engineering program manager Daniel Weber and former account manager Sandhya Klute, allegedly accessed confidential documents.

Reynolds worked for Thomas Duryea Consulting, an Australian partner of NetApp, and left to work for Nimble’s Australian outpost, the report said. NetApp accuses Nimble and Reynolds of conspiring to access NetApp’s computer network without authorization, a violation of the Computer Fraud and Abuse Act.

Weber and Klute allegedly downloaded documents in the days before resigning from NetApp, including sales material, pricing models, and detailed customer information.

Many technology companies are accustomed to employees leaving for competitors that offer new and exciting opportunities, but employers should be careful to comply with the law and nondisclosure agreements. According to The Recorder, at this point it’s hard to tell why the information allegedly taken from NetApp is so valuable and how Nimble used it.

Recently, Nimble filed for an IPO, planning to raise $150 million.

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