Divvy corporate parent says former COO lied, stole company data when he left to launch competitor

By Jonathan Bilyk | Nov 4, 2015

The company that runs Chicago’s Divvy bike sharing program, as well as bike sharing programs in other cities, has filed suit against the executive who formerly oversaw Divvy, saying he broke his contract, stole company information and lied to company leadership when he left the company this summer to take the helm at a startup intended to compete with Divvy’s corporate parent.

On Nov. 4, New York-based Motivate International Inc. filed its complaint in Chicago federal court against Edward Inlow, of Chicago, who now serves as CEO of Shift Transit LLC, a new bike sharing business formed in partnership with Canadian company PBSC Urban Solutions Inc.

The lawsuit stems from Inlow’s decision earlier this year to resign his post at Motivate, and then surface weeks later in his new leadership position with PBSC at Shift Transit.

According to the lawsuit, Inlow had first been hired in 2013 by Motivate – then known as Alta Bicycle Share Inc. - to serve as general manager of the Chicago Divvy program, where he was “responsible for leading all aspects of the company’s new Divvy system, including marketing, finance, operations and customer service,” both before and after the program’s launch.

Inlow’s performance earned him a promotion to Motivate’s chief operations officer, the second highest ranking position at Motivate, in February 2014, a position he continued to hold, despite a title name change to vice president of operations nine months later.

According to the lawsuit, Inlow approached company leadership and explained he was intending to leave the company for “personal reasons.” While the lawsuit alleged Motivate attempted to find a way to accommodate Inlow’s personal concerns, Inlow submitted a resignation letter in August. According to the lawsuit, Inlow laid out in the letter a variety of reasons underlying his resignation, including a desire to return to Chicago and “focus on family,” including his relationships with his fiancé and his father.

Inlow’s last official day working for Motivate was Sept. 4.

However, about a month later, PBSC formally announced in a press release its new business venture, Shift Transit. The company particularly noted the involvement of Inlow in the new bike sharing business. The news “came as a complete shock” to Motivate’s leadership team, according to the lawsuit.

According to the lawsuit, Motivate’s later investigation led the company to believe Inlow had allegedly received a job offer from PBSC as recently as July and had been talking with PBSC about creating the competing bike share program for some time before that.

Before launching Shift Transit, Motivate’s lawsuit contended PBSC had served as a vendor “focused on just the technological aspects of bike share.” PBSC had worked with Motivate as a hired vendor on Motivate’s programs in Chicago, Washington, D.C., and New York.

However, with Inlow on board, PBSC appeared poised to use the confidential proprietary information he had gleaned from Motivate to form a new business designed to compete directly with Motivate.

In the lawsuit, Motivate noted it had recovered two company laptops and external hard drives from Inlow after his resignation, and forensic examinations of those computers revealed Inlow had copied and deleted a host of company files containing information on Motivate’s operations and finances and other corporate data from July until the time he handed over the computers in response to Motivate’s demands.

“In short, Inlow took everything he might need to set up his own competing company and help PBSC expand its operations to compete with Motivate,” the complaint stated.

Motivate said Inlow’s alleged actions would stand as violations of his employment agreement with Motivate, Motivate’s company policies, and specific instructions following his resignation to not attempt to delete or alter any of the files contained on the computers Motivate was seeking to recover.

Motivate’s lawsuit has alleged Inlow violated the Illinois Trade Secrets Act, and engaged in conversion and breach of fiduciary duty.

PBSC is also named as a defendant in Motivate’s legal action.

Motivate is seeking an injunction preventing Inlow from sharing or using Motivate’s company information in collaboration with PBSC and to require Inlow and PBSC to detail the extent of how they have used Motivate’s company information to date. Motivate is demanding to inspect Inlow’s personal computers and email accounts and PBSC’s company computer networks, as well.

Motivate is also seeking unspecified “award for all damages suffered by Motivate” through Inlow’s partnership with PBSC.

Motivate is represented in the action by attorneys with the firm of Paul Hastings LLP, with offices in Chicago and Washington, D.C.

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