(Reuters) – Automatic Data Processing Inc. is suing its former chief strategy officer, Matthew Levin, who this week was named CEO of Benefitfocus Inc., accusing him of abusing trade secrets.
The personnel management company ADP said in the lawsuit, filed in federal court in Newark, New Jersey, that Levin knew the details of ADP's business plans, sales and potential products and would use that information to harm his former employer.
Benefitfocus said the ADP's allegations are without merit and that Mr Levin intends to vigorously defend himself and take up his CEO duties on May 10 as planned.
Mr. Levin was ADP's strategy director from 2018 to April 2021
Benefitfocus announced Mr. Levin's appointment on Tuesday.
Mr. Levin, who replaces Stephen Swad, provides more than 15 years of experience in benefits in administration, health insurance and health care technology, the company says. He previously worked at Hewitt Associates and Aon PLC.
ADP asks the court to rule that Mr Levin may not take up his new position and says that it will suffer irreparable damage unless Levin "is immediately detained and ordered to keep and use ADP's trade secrets." ADP wants Mr Levin may be banned from working for any competitor for one year.
Benefitfocus is facing a potential proxy competition with the hedge fund Indaba Capital, which owns a 9.6% stake, which nominated two board members in March after urging the company to sell itself after years of poor returns and high management turnover.