Snapchat Lawsuit: Suit Moving To Federal Court, Former Snap Employee Seeks Protections
A lawsuit against Snap Inc. by a former employee is moving to federal court, a complaint filed in California showed Tuesday. The case filed by former Snap employee Anthony Pompliano, was originally brought against Snap in January in a state court. Pompliano says Snap falsified user engagement numbers to potential investors and others prior to the company's initial public offering in March.
Pompliano will seek a trial by jury in federal court and will seek damages of at least $10 million, he is seeking to be protected under whistleblower laws. The formal complaint lists nine issues, including "breach of contract" and "intentional infliction of emotional distress."
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Snap has previously denied Pompliano's allegations of wrongful termination, calling them a "smear campaign" run by Snap against him and the intentional misleading of investors, advertisers and others outside the company with false user data. A redacted version of court documents was available prior to April when the full documents were unsealed and made public. Snap. as a private company, kept the documents sealed after going public, agreed to release the unredacted court documents.
Pompliano worked for Snap for three weeks in 2015 after leaving a job at Facebook. Pompliano's employment contract with Snap required that he settle any complaints with the company with an arbitrator out of court. In filing a lawsuit, Pompliano broke this contract with Snap. In prior court filings, Snap has called Pompliano's claims "one big publicity stunt," accusing Pompliano and his lawyers of "just making things up."
Pompliano's complaints are detailed in the pages of the federal court filing:
"Accordingly, Mr. Pompliano brings this lawsuit to clear his name, to bring to the public eye Snapchat’s dissemination to investors of false and misleading material information, to seek protection from retaliation under state and federal whistleblower laws, and to seek redress for the harm Snapchat has done to him and his career, including damages for lost/back wages, significant harm to his professional reputation, and punitive damages based on Snapchat’ intentional, wrongful, deceptive, retaliatory, and malicious conduct."
The filing also includes slides from a presentation Pompliano says he made to Snap on user growth that brought on comments from Snap CEO and founder Evan Spiegel about not expanding into "poor" countries.
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Mention of these comments in the prior lawsuit brought on an "#UninstallSnapchat" campaign in India. Snap denied those claims to CNN in April and called Pompliano a "disgruntled former employee."
This lawsuit comes just after Snap Inc.'s first-quarter earnings produced a drop in the company's stock price. The company took a loss during the first quarter in revenue but gained new users, an investor's report released by the company showed. Additionally, the company is facing increasing competition from Instagram, the Facebook-owned photo-sharing social media platform.
Instagram introduced Snapchat imitator "stories" last summer and has been adding new features since. Features released Tuesday by Instagram copied Snapchat's face lenses as well as video features like rewind. The two apps have been in heated competition vying for new users, and Snap seems to be lagging.
In April, Instagram announced it had 200 million daily active users on its "stories" feature alone, topping Snapchat's 166 million daily average users. While Snapchat is adding features to the app as well, like new 3D filters, Instagram seems to be catching up.
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