XBIZ -- May 18 -- Friendfinder (Various Inc) filed suit against affiliate managers, Jack Mardack and Sean Barrett for breach of contract, misappropriation of trade secrets and defamation, among other charges, after they left the company and formed Profit Lab, which does consulting work for competitor Sex Search. Mardack is accused of poaching the company’s affiliate list and that both execs embezzled and diverted company funds. The suit further alleges that Mardack shared its affiliate list with competitors, helped set up a competing joint venture while employed at Friendfinder and brokered unauthorized payouts while paying those funds to himself and Barrett, and that Mardack made false statements that the company’s “payment processing was in jeopardy due to Friendfinder’s bad financial condition.” Mardack denies all allegations and says he left FriendFinder because of a "hostile environment. "I am saddened by the retaliatory sentiment and paranoid tone from Friendfinder. I didn’t take away such an affiliate list. One who does business in this industry knows that everyone who works in it also has a personal list.” Friendfinder seeks damages and a permanent restraining order against Mardock and Barrett from future use of its affiliate list.
The full article was originally published at XBiz, but is no longer available.
Mark Brooks: Fascinating. In the sales world salespeople can walk away with their rolodex. How is the affiliate world different? I would argue that an affiliate manager should be able to take his 'relationships' from affiliates that he has recruited for the company. But, not the affiliates already in place. How to track? Just what is a 'personal list?' This case may well lead to some significant affiliate management legal precedents. Watch this space.