CCBill Sueing Epoch / Patrick Curran

TEMPE, Ariz. - Third-party processor CCBill is suing its chief competitor Paycom and former CCBill vice president of human resources Patrick Curran.

The lawsuit, filed on July 27 in Arizona Superior Court, alleges that Curran accepted a position at Paycom despite being under contract with CCBill.

CCBill further alleges that Paycom was aware of Curran's employment agreement and a confidential disclosure agreement Curran signed with CCBill in 2001.

Paycom contends that Curran's employment agreement is unenforceable.

The suit states, in part, "...Paycom valued relationships Curran had established with certain of plaintiffs' clients and, upon informantion and belief, intended for Curran to utilize client data and information in order to solicit those entities and individuals to engage in business with Paycom and cease doing business with CCBill."

Curran's employment agreement with CCBill states that he may not work for any company that directly competes with CCBill for two years after his employment with the company ends, regardless of how employment is terminated.

CCBill alleges Curran stole their assets and trade secret information, an allegation stemming from a company-provided cell phone which Curran reportedly had transferred from the company's name to his.

CCBill is seeking compensatory damages in an amount to be proven at trial, together with a pre-judgment interest rate of 1.5 percent per month, and punitive damages. In addition, the suit seeks to bar Curran from working at Paycom.

Curran did not return request for comment. Paycom executives were unavailable for comment.

CCBill will be issuing a statement shortly.

http://avnonline.com/index.php?Prima...tent_ID=273594

Regards,

Lee

I was wondering when this would happen. Most companies have non-compete clauses, even I have my models sign a non-compete clause. As powerful as he was in the company, I am sure he had to sign one and his new company had to be aware of that. Kind of a common practice in any business, mainly at his level.

Hopefully his new gig doesn't drop him from being scared of legalities and then he is out of a gig completely. He must be really stressed out right now. I wish him the best, he is good people. He helped me out a lot at the Florida convention last year when my husband had too much to drink.

Best of luck Pat! ((hugs)) my friend.

non-compete?
Shit I thought only TV journalists did this lol

crazy shit, looks like it's going to get ugly

Man this sucks. I support Paycom and CCBill and Patrick. I hope this can be settled because these companies have really never been enemies and I would hate to see that.

Mark

Somebody at CCBill doesn't get it.

All this will do is alienate a lot of people. I'm sure the Cadwells are pissed/embittered, but an ugly public lawsuit, particularly with bullshit claims about "proprietary information" in a cell phone(!) is the LAST thing this industry needs, and makes CCBill look like a sore loser. If they were smart, they'd graciously wish Patrick well and just move on; this will end up looking bad not for Patrick or for Epoch, but for CCBill.

Epoch is most likely correct; non-compete agreements that are too restrictive are rarely enforceable, and particularly since Patrick's role with CCBill was VP of HR (hardly a role that would be involved with any unusual proprietary aspects of CCBill's business) it would most likely be hard to defend.

Of course that's my non-lawyer's interpretation. But perhaps if enough people let it be known to CCBill that this is dumb, they'll realize that they'll lose a lot more in PR than they'd ever gain by pursuing this.

i'm generally a BIG fan of ccbill, but this left a bad taste in my mouth. patrick surely had access to all information. IF - and i SERIOUSLY doubt this - he wanted to contact ccbill clients, he didn't need this cell phone. he could have simply copied everything out of it or out of his database at work.

patrick was with ccbill long enough to where we can all see he was a loyal employee for quite a while, not just some greedy person trying to climb up using every means possible. sometimes companies and people part, and after a long and positive relationship perhaps it's better to part on good terms even if the separation wasn't what both parties wanted.

just my two cents...

The last thing we need in our industry is drama and instability with our processors.

i know a fair amount of people in our industry who signed a non compete. and for me, it's already ugly - and sad :(

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Originally Posted by jIgG

non-compete?
Shit I thought only TV journalists did this lol

crazy shit, looks like it's going to get ugly

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amen to that!!!

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Originally Posted by Squirt

The last thing we need in our industry is drama and instability with our processors.

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Well this could betoken certain portents regarding the Gay Phoenix Forum, for which we are all in the middle of planning for.....

Steve

I guess me being on a cruise during the phoenix forum trip isn't as bad as I once thought. I was kicking myself in the ass for them being scheduled at the same time, but now it looks like being on the boat may be the better option.

Some really good points posted. I agree this will defintely hurt CCBill no matter what happens. Two competitors always working together and one is now suing the other. I talked to someone who was in a similiar situation and the company that sued them lost. I guess these non compete agreements very rarely hold up is what their lawyer said. I don't understand the whole cell phone deal. The old cell number I had for him in his voicemail he said if you are trying to reach CCBill call blah blah blah and if you are trying to reach Patrick call him at blah blah blah. So it did not seem he was using this cell phone. This whole situation sucks. I am sure everything will be fine Patrick and it sounds like Paycom has your back.

Mark

Here is CCBills response to the suits / AVN article:

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Tempe, Arizona – August 4, 2006 – Today, AVN Online reported that CCBill is suing Paycom and its former employee, Patrick Curran. The truth is that management at Paycom, CCBill’s largest and most direct competitor, has apparently decided to compete with CCBill through corporate raids and attempts to mine CCBill’s trade secrets, rather than by offering superior products and pricing to the marketplace. CCBill was shocked to learn that two former CCBill employees, Patrick Curran and David Salonic, have departed for Paycom, and in Curran’s case without notice, taking with them knowledge of client lists and other valuable information, which they may be disclosing unlawfully to Paycom. Promptly upon Curran’s exit, Paycom launched litigation, suing CCBill in California. Paycom claims a non-existent legal right to receive CCBill’s high level employees and obtain CCBill’s confidential information with impunity. CCBill is attempting to protect itself from Paycom’s newly aggressive tactics.

CCBill, as do most successful companies today, takes all legal and appropriate steps to protect its business assets including its intellectual property, confidential information, trade secrets and competitive advantages. One of the mechanisms that companies employ to provide that protection is a written agreement with the employees that in essence says that for a period of time after leaving the company the employee agrees not to go to work with a competitor. Another is an agreement to not divulge any Company information to anyone outside the Company. With that stated, in the past 2 weeks, two of CCBill’s senior managers have chosen to violate their signed commitment to the Company and accept employment with Paycom.

CCBill advised Paycom immediately of the existence of the employment agreements which these individuals had signed. Rather than support CCBill’s right to prevent employees from taking Company confidential information to competitors, Paycom chose to race to the courthouse to file suit against CCBill. Thus, CCBill has taken legal action and responded appropriately.

CCBill recognizes that this response is a shift from their normal policy of not responding to rumors and innuendos, but believes it is important for the industry to know that CCBill is here for the long haul, and as always has done the right thing to protect its business and that of its clients.

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Regards,

Lee

I VERY SERIOUSLY DOUBT there will be any negative repercussions for Gay Phoenix Forum.

Remember that (a) Epoch is sponsoring; and (b) CCBill has a full time person (Sherri) who is coordinating all the details with Phoenix Forum.

If anything, if I were Ron Cadwell, I'd be opening the checkbook to make Gay Phoenix Forum an even bigger event without Patrick's assistace, and making some well-placed calls to ensure that the gay adult community knows that CCBill is and continues to be 100% behind gay adult webmasters. That's making lemonade out of lemons; suing Patrick and Epoch is just sour grapes.

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Originally Posted by Lee

Here is CCBills response to the suits / AVN article:,

Lee

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Sounds like a pissing contest to me. There's no question that what Epoch did was underhanded, but my guess is they preemtively filed in California after a nasty phone conversation or something... and CCBill filed in retaliation.

I just hope that the industry, and the only two reputable processors in the industry, don't get embroiled in what is a pretty small-potatoes occurrence in the long run.

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Originally Posted by gaybucks_chip

Sounds like a pissing contest to me. There's no question that what Epoch did was underhanded, but my guess is they preemtively filed in California after a nasty phone conversation or something... and CCBill filed in retaliation.

I just hope that the industry, and the only two reputable processors in the industry, don't get embroiled in what is a pretty small-potatoes occurrence in the long run.

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To be honest, as long as CCBill and Patrick both come out of this amicably, i really dont care what happens $0.02

Regards,

Lee

CCBill has integrity with merchants. I've worked with CCBill and have deep respect for them. I have not worked with Epoch/Paycom.

We all know that, of all things, there is PLENTY of business in the processing world and enough to go around. Doesn't this all seem a bit greedy and heavy handed as it stands now? I'm sure as more information comes out opinions might change. Do you think this is good for our industry?

we don't actually know that what epoch did was underhanded. they have no agreements not to hire people who have or do work for competitors as long as they follow the law.

the truth is all we know is what was announced. the truth of what's behind all this - none of us really know.

i have worked with both ccbill and epoch and have found both companies to be ethical and great to do business with. hopefully everyone will come to an understanding.

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Originally Posted by gaybucks_chip

Sounds like a pissing contest to me. There's no question that what Epoch did was underhanded, but my guess is they preemtively filed in California after a nasty phone conversation or something... and CCBill filed in retaliation.

I just hope that the industry, and the only two reputable processors in the industry, don't get embroiled in what is a pretty small-potatoes occurrence in the long run.

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Originally Posted by basschick

we don't actually know that what epoch did was underhanded. they have no agreements not to hire people who have or do work for competitors as long as they follow the law.

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This is true... even if we look at this with no bias we can see a company that is taking moves to affect the stability and efficiency of another company in an industry where there are only 3 key players CCBill, Epoch, Verotel.

The moves of hiring key employees from a competitor, WHILE they work for the competitor is an aggressive business tactic usually performed to get the upper hand in industries/sectors that are saturated with competitors. This isn't the case in the online adult processing sector.

A very telling comment CCBill made "Paycom, CCBill’s largest and most direct competitor, has apparently decided to compete with CCBill through corporate raids..."

Do you know what a corporate raid is?

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Corporate Raid:

A corporate raid is a business term, sometimes also referred to as breaking a company. It describes a particular type of hostile takeover in which the assets of the purchased company are immediately sold off (business liquidation). The target company essentially disappears in the process.

This can be a profitable exercise if the company holds disposable assets or liquid investments that are valued higher than the company's current market cap. Examples would include companies holding valuable land or equipment, while their stock price is too low due to market factors. After taking a "hit" on their stock price for whatever reason, companies can become targets for a leveraged buyout.

Examples of this is an insurance company whose "float" or "reserves" are larger than the market cap or a real estate company or trust whose real estate could be sold for a larger sum than what the market cap of the company is. Source and more info here


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From CCBills comments we can see that things have happened behind the scenes to dramatically undermine CCBills stability.

This is NOT good for our industry at all. As things stand now it seems a very aggressive, greedy, and unnecessary tactic to gain market share and destroy a company. What are your thoughts?

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Originally Posted by Squirt

As things stand now it seems a very aggressive, greedy, and unnecessary tactic to gain market share and destroy a company. What are your thoughts?

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Sounds like a solid business plan to me.

Take out the competition, have free reign in whatever field you work in.

Seems to have worked for Microsoft.

Regards,

Lee

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Originally Posted by Lee

Sounds like a solid business plan to me.

Take out the competition, have free reign in whatever field you work in.

Seems to have worked for Microsoft.

Regards,

Lee

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Yes you and I have always disagreed on business practices, well not all practices, but the aggressive, or non paying ones.

Our industry is a small one and being aggressive, instead of playing well with others, isn't looked to kindly upon.

BTW the last thing our industry needs is a "microsoft" processor. Having only one processor means we'll be one processor away from not processing ;)

We were extremely disappointed with CCBill's mischaracterization of the facts and attempt to disparage Paycom's stellar reputation. There has been no corporate raiding. Paycom merely accomodated the requests of 2 employees looking to make a lifestyle change.

While their former employer tried to shackle them with onerous covenants not to compete legal counsel has determined that they are clearly unenforceable both in California and Arizona as the legal proceedings will confirm. Paycom has no interest in, or need for, any trade secrets. Paycom already knows all the players in the industry and our innovative technology such as the launch of our venture with MPA3 has no use for anything that CCBill has to offer. In compliance with applicable law, Paycom believes that every employee has a right to work wherever they want and when approached by talent such as Patrick Curran and David Salonic we are not willing to let draconian restraints on a person's right to work get in our way.

We believe that the best way to keep an employee is to have a great atmosphere, great product and a great company. We frankly cannot understand what it is that CCBill is really afraid of? Competition?

The Epoch Family

we don't know it's greedy or underhanded. we only know what ccbill says, which could be true but almost surely has spin. for all we know, patrick's aging mother lives here and he wanted to live by her or maybe he hadn't gotten a raise in 3 years. after thinking about this for a few minutes, i realized that i thought of over 20 reasons why patrick could have changed to another company.

and - not that we know it happened as this is only personal speculation - suppose that three years ago at a convention someone from epoch said to patrick "hey, if you're ever free, give us a call. we could use someone like you" and patrick started dreaming of beautiful socal weather.

personally i couldn't even think of taking sides here without knowing real details.

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Originally Posted by basschick

personally i couldn't even think of taking sides here without knowing real details.

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Exactly right.

Its of no concern to me so long as my business isnt effected by anything and, as far as im aware, it isnt going to be at this moment in time.

I just hope things get resolved between Patrick and CCBill, would be a shame to ruin, what i would imagine has been a good personal and business relationship for many years over something as petty as this.

The reality of it is this, it'll never even make it to court, its just two processors flexing their muscles to see who has the biggest $0.02

Regards,

Lee

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Originally Posted by Lee

To be honest, as long as CCBill and Patrick both come out of this amicably, i really dont care what happens $0.02

Regards,

Lee

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Agreed. I hope they get it settled before Gay Phoenix Forum, otherwise it will be a lil uncomfortable.

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Originally Posted by basschick

personally i couldn't even think of taking sides here without knowing real details.

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I totally agree... that's why I'm saying "as it stands now" and "I'm sure as more information comes out opinions might change."

We are all speculating here

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Originally Posted by Lee

Exactly right.

Its of no concern to me so long as my business isnt effected by anything and, as far as im aware, it isnt going to be at this moment in time.

I just hope things get resolved between Patrick and CCBill, would be a shame to ruin, what i would imagine has been a good personal and business relationship for many years over something as petty as this.

The reality of it is this, it'll never even make it to court, its just two processors flexing their muscles to see who has the biggest $0.02

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I agree 100%

I'm with Verotel so I don't see any affect in sight, but you never know really.

Though I wouldn't be surprised if Verotel, CCBill and Epoch/Paycom weren't all linked in some fucked up way ;)

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Originally Posted by basschick

we don't know it's greedy or underhanded.

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Well.... both sides have their spinmeisters out in full force, that's for sure. And I think the use of the phrase "corporate raiding" was an emotional term picked by someone for the impact it would have, rather than out of factual basis... I mean, CCBill has a couple hundred employees. A VP of HR and some other guy that isn't in the public eye could hardly be described as so crucial that their leaving would put the company at risk of failure. Likewise, I suspect that Epoch's statement is, um, obfuscated somewhat by their position.

But... at the end of the day, regardless of whether Epoch approached the two employees or they approached Epoch, it was certainly not a "treat people the way you'd like to be treated" move. Not that I'd expect that in any business, particularly this one, but when these two companies are SOOOO visible and sooooo crucial to all of us in the online adult arena, I would expect at least a minimum level of professionalism... let's face it, both Epoch and CCBill are extrememly profitable. if Epoch knew that the employees they wanted to hire were under do-not-compete agreements, they could have approached CCBill and said "Look, they're going to leave, no way around that, so let's make this as painless as possible, avoid public drama, and let's buy out the non-compete. Likewise, CCBill could have said "This sucks, but let's avoid the nastiness, legal fees, and bad blood, and mediate this and avoid any drama."

I don't know who refused to come to the table, but somebody should have risen beyond pettiness and found a way to solve this without dueling lawsuits. It's incredibly wasteful of money and resources, and distracts management of both companies at a time when they should NOT be distracted.

Just giving this a bump.

This has been settled now, im waiting for someone at CCBill to post in here to let us know what happened however, as i suggested, it never made it to court :)

Regards,

Lee