Law Office of Henry B. LaTorraca Civil Trial Attorney

ADP cuts off access to Zenefits clients over security issues

Many California businesses rely on payroll and accounting services provided by ADP. The information gathered to provide these services is often sensitive, and the use of this data has led to a dispute between ADP and the startup human resources company Zenefits. The services provided by Zenefits sometimes use data such as Social Security numbers and banking information, but concerns over the way that this information is collected led to ADP cutting off their payroll service to companies that use Zenefits on June 4.

ADP says that concerns developed about the way that Zenefits pulled this sensitive information, and a decision to cut off access was made after a surge in user traffic was observed among Zenefits clients. While ADP claims that the corporate dispute developed due to concerns about security, the founder of Zenefits said that the payroll giant was actually more interested in stifling competition and protecting their market position.

ADP claims that Zenefits has never been authorized to extract data from their servers, but the Zenefits founder says that the two companies have worked together in the past and have always had a good understanding. He also said that ADP began cutting off access to Zenefits clients well before the alleged spike in traffic. The entrepreneur points out that ADP provides HR services to many of its clients, and he maintains that the payroll company acted to protect this aspect of their business.

An experienced business law attorney may be able to help business owners embroiled in a dispute by assessing their legal position and options. While litigation may be time consuming and expensive, an amicable settlement often remains elusive when positions become entrenched. An attorney could assist entrepreneurs by scrutinizing contracts and other legal documents for vague or onerous clauses and provisions, and they may make suggestions designed to avoid future conflict.

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