Freshworks and Zoho Reach Settlement to End Litigation

Rhea-AI Summary

Freshworks Inc (NASDAQ: FRSH) has resolved the trade secret litigation initiated by Zoho Corporation in March 2020. The lawsuit stemmed from a now-former Freshworks employee who incorrectly accessed Zoho's confidential sales information using his spouse's computer without consent. Freshworks clarified that these actions were against their policies and were not authorized. The legal dispute has concluded with both parties settling, and Zoho has dismissed the lawsuit. Freshworks is implementing measures to prevent future incidents.

Positive

• Litigation resolved, reducing legal risk and potential financial liabilities.
• Commitment to implementing measures to prevent future occurrences of such issues.

Negative

• Incident reflects internal control weaknesses regarding employee conduct.
• Potential reputational damage due to past employee's actions.

SAN MATEO, Calif., Dec. 23, 2021 (GLOBE NEWSWIRE) -- Freshworks Inc. (NASDAQ: FRSH), today announced that it has resolved the litigation filed by Zoho Corporation Pvt. Ltd. (“Zoho”) in March of 2020 in federal court in California for trade secret misappropriation against Freshworks. Following the filing of the lawsuit, Freshworks determined that a now-former Freshworks sales employee, using his spouse’s computer without her knowledge, wrongfully accessed and used Zoho confidential information relating to sales leads. These actions were not taken at the direction of Freshworks, and are contrary to Freshworks’ policies. Freshworks has taken steps to remediate any harm caused and agreed to take steps to make sure that nothing like this happens again. Freshworks and Zoho have settled the litigation, and Zoho has now dismissed the lawsuit, bringing it to an end.

About Freshworks

Freshworks makes it fast and easy for businesses to delight their customers and employees. We do this by taking a fresh approach to building and delivering software that is affordable, quick to implement, and designed for the end user. Headquartered in San Mateo, California, Freshworks has a dedicated team operating from 13 global offices to serve 50,000+ customers including Bridgestone, Chargebee, DeliveryHero, ITV, Klarna, Multichoice, OfficeMax, TaylorMade and Vice Media. For more information visit www.freshworks.com.

© 2021 Freshworks Inc. All rights reserved. Freshworks and its associated logos are trademarks or registered trademarks of Freshworks Inc. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

Investor Contact:
Joon Huh
ir@freshworks.com
650-988-5699

Media Contact:
Jayne Gonzalez
pr@freshworks.com
408-348-1087

FAQ

What litigation did Freshworks resolve with Zoho in December 2021?

Freshworks resolved a trade secret misappropriation lawsuit filed by Zoho Corporation.

What was the cause of the lawsuit against Freshworks filed by Zoho?

The lawsuit was caused by a former Freshworks employee who accessed Zoho's confidential sales information without authorization.

What actions is Freshworks taking following the litigation settlement?

Freshworks is implementing measures to ensure similar incidents do not occur in the future.

Did Freshworks admit to any wrongdoing in the Zoho lawsuit?

Freshworks stated that the actions of the former employee were not authorized and against company policies.

What are the implications of the lawsuit settlement for Freshworks investors?

The settlement reduces potential legal liabilities and risks associated with ongoing litigation.