Siebel sues Salesforce over former exec

Siebel Systems has filed suit against a former executive who resigned to join rival Salesforce.com, claiming he disclosed confidential information to his new employer while still at Siebel.

The breach-of-contract complaint, filed on 26 September with the California Superior Court in San Mateo, alleges that former Siebel VP Brett Queener violated a confidentiality agreement.

The complaint claims Queener participated in a meeting in which proprietary information about Siebel's products was disclosed two days before he left Siebel and after he had agreed to take a job with Salesforce.

Siebel also alleges that Queener, who left Siebel on 9 July, helped Salesforce recruit other Siebel executives while still employed by Siebel.

"Queener has breached his obligations under the Proprietary Information Agreement by, among other things, while employed at Siebel Systems, engaging in activities that directly conflicted with his obligations to Siebel Systems, unlawfully inducing Siebel Systems' employees to leave their employment with Siebel Systems and, on information and belief, unlawfully using and disclosing Siebel Systems' proprietary and confidential information," the complaint states.

Siebel is seeking more than $25,000 in damages and "injunctive relief", according to the complaint. Representatives of Siebel and Salesforce declined to comment on the case, as did Queener.

On 27 October, Queener's attorneys filed a motion seeking dismissal of the case, claiming Queener's innocence and calling Siebel's allegations "threadbare," "vague" and "deficient".

"Siebel has failed to identify a single document or piece of confidential information that it alleges Queener improperly used or disclosed to Salesforce.com," the motion states. "Siebel has also failed to identify a single employee that Queener improperly induced to leave Siebel."

A hearing on the case is scheduled for today.

Siebel sells customer relationship management (CRM) software that is used for corporate tasks such as tracking technical support requests, analysing sales leads and recording customer purchases. Salesforce offers a rival service but does not sell software. Instead, it offers business applications available over the internet for a monthly fee, accessible through a web browser and hosted by the Salesforce.com site.

Salesforce leads in the growing market for hosted business applications aimed at sales, marketing and customer service staff. Siebel has launched its own online version, called CRM OnDemand that is sold through a partnership with IBM. The company acquired Salesforce competitor UpShot earlier this month to bolster its online service.

Besides clashing in the sales applications market, there's a personal rivalry between Tom Siebel, chief executive of Siebel, and Marc Benioff, his counterpart at Salesforce. Both men formerly worked under Larry Ellison at software giant Oracle.

Salesforce has hired at least four former Siebel executives in roughly the past year. Queener was formerly in charge of field marketing at Siebel and holds a similar position at Salesforce. Dave Orrico, a seven-year Siebel sales veteran, joined Salesforce in August as senior vice president and general manager of its Americas region. In July, Salesforce hired Steve Garnett, who left Siebel last year, to oversee European business. Craig Ramsey, former Siebel executive vice president of worldwide sales, joined Salesforce's board of directors in April.

The suit against Queener also shows how the tables have turned on Siebel, a former Wall Street favourite. Software rival SAP filed suit against Siebel in 1999, alleging unfair hiring practices after 27 key US SAP employees took jobs at Siebel. A second suit alleged a loss of trade secrets. SAP later dropped the suits.

Alorie Gilbert writes for CNET News.com.