A global software firm has taken a former sales executive to court, accusing him of downloading thousands of sensitive company documents before he was dismissed and later moving to a competitor embroiled in a high-value fight for Australian Taxation Office-related work.
Cyara Solutions, an AI-driven customer experience platform, has filed proceedings against its former ANZ sales manager Stephen Mitchell and rival Hypertech Solutions. The company claims Hypertech gained an advantage through the alleged misuse of confidential material in a dispute over work Cyara says is worth about $3.5million.
According to a statement of claim lodged in June 2024, Cyara — founded in Melbourne and now headquartered in Texas — alleges Mr Mitchell violated his employment contract, a separate confidentiality agreement and his equitable obligation not to misuse confidential information.
Cyara also claims Mr Mitchell breached the Corporations Act by allegedly using information obtained during his employment with the company to benefit Hypertech.
In its case against Hypertech, Cyara alleges the rival company either assisted in or benefited from Mr Mitchell’s alleged breaches. Hypertech has denied the allegations.
A factual background outlined in a Supreme Court judgment from August 24 states that Mr Mitchell joined Cyara in 2017 as a Major Account Executive, before being promoted to ANZ Sales Manager.
Throughout his tenure, Mr Mitchell predominantly managed Cyara’s relationship with Optus, which subcontracted Cyara to provide services to the ATO.
In August 2022, Optus began communicating with Hypertech about new software for contact centres, the judgment states.
Stephen Mitchell joined Cyara in 2017 as a Major Account Executive, before being promoted to ANZ Sales Manager
Cyara’s CEO Alok Kulkarni is pictured
The following February, Optus’ account manager emailed Mr Mitchell to say that the ATO was ‘aggressively seeking price reductions’ and wanted to see improved functionality from the software. Cyara’s pleadings characterise the correspondence as a notification of an open tender process.
Following negotiations, Cyara was able to renew its contract with Optus for another three years from July 2023.
On July 3, Mr Mitchell signed an additional confidentiality and intellectual property agreement with Cyara.
According to Cyara, Mr Mitchell learned in November or December that he was not in the running for the newly created ‘Vice President of International Sales’ role and would also not be attending the annual ‘sales kickoff event’ in the US.
Mr Mitchell disputes this version of events and asserts that he had no interest in the role and only learned of his non-attendance at the event when he received an email in January about his accommodation being cancelled.
While discussions were continuing between Optus and Hypertech, Mr Mitchell remained focused on securing the ATO tender, emailing his colleague on December 8 that he was making good progress.
According to Cyara’s pleadings, it was also around December 8 when Mr Mitchell downloaded approximately 11,000 work files to his personal drive, without authorisation or a work-related purpose.
Cyara Solutions, is an AI-powered customer experience platform, founded in Melbourne and now based in Texas
Cyara alleges Mr Mitchell learned in late 2023 that he would not attend the company’s annual US sales event
According to Cyara, more than 3,500 of these files contained confidential information, including pricing strategies, product roadmaps and contract terms.
In his defence, Mr Mitchell argues he saved copies to his work laptop and an external drive for the purpose of remote work, with no relation to any concerns he had about his ongoing employment.
On December 12, Optus emailed Mr Mitchell inviting Cyara to formally submit its cost proposal for the ATO testing contract, while also flagging concerns about the software’s declining use and integration issues.
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On Christmas Eve, Mr Mitchell received a call from Cyara’s chief executive, Mr Alok Kulkarni, which prompted fears that his employment was hanging in the balance.
After hanging up, Mr Mitchell fired off a string of text messages, urging the CEO to give him one more quarter at the company, stating he had ‘worked too hard’ in securing deals not to be paid for them.
An excerpt of messages included in the judgment shows Mr Mitchell texting Mr Kulkarni: ‘Worst phone call of my life and especially on the doorstep of Xmas.’
On Christmas Day, Mr Mitchell is alleged by Cyara to have downloaded eight additional files to his personal drive, which he then transferred onto a flash drive the next day.
On January 9, Mr Mitchell was terminated and a Deed of Settlement was executed, stipulating his compliance with a range of obligations including confidentiality and intellectual property.
Later that month, Cyara’s chief executive, Mr Kulkarni, responded to Mr Mitchell’s previous texts from Christmas Eve, telling him he had just returned from India and wanted to catch up.
A mock-up of the texts exchanged between Mr Mitchell (grey text) and Cyara’s CEO Alok Kulkarni (blue text), as they were transcribed in the public Supreme Court of Victoria document
In response, Mr Mitchell fired back: ‘Alok, you’re the CEO. If you wanted me there I’d still be there. I’m trying hard to lose the anger I feel, especially after our Xmas [was] ruined by your Xmas Eve phone call.
‘You were just distancing yourself from what was coming. I am so disappointed in you and also the new management team at Cyara who don’t even know me.’
Mr Mitchell then went on to say he had tripled the size of Cyara’s business and cash balance over two years and had missed out on both his long service leave entitlements and equity, and said he had ‘never felt more insulted’ in his life.
‘But I’m just as angry at myself for believing anyone senior at Cyara, anyone I’ve known for years, would have a shred of the loyalty I’ve brought to every single one of the people I’ve supported there.’
Mr Kulkarni responded expressing sympathy and acknowledged his job loss as ‘unexpected’ while offering to be a reference.
In his defence, Mr Mitchell stated that in February, he applied for an ABN to conduct ad hoc consulting work, following a month of unsuccessful job hunting post-termination.
He approached a number of industry contacts, including Hypertech’s chief executive, to explore any work opportunities.
An in-principle agreement was reached, and Mr Mitchell began consulting for Hypertech on February 22.
By that stage, however, Hypertech had already been in discussions with Optus about its PumpCX software and opportunities with the ATO. The company had signed a Master Supply Agreement with Optus in December 2023 while Mr Mitchell was still employed by Cyara, with Optus formally executing the deal in February.
A day after Mr Mitchell started consulting, Optus advised Hypertech it wanted to proceed with a trial of PumpCX, a contact-centre testing platform being evaluated as a potential replacement for Cyara’s technology at the ATO.
In March, Optus notified Cyara that the ATO intended to end its supply contract, before informing the company in May that the ATO would cease using Cyara’s products and transition to those supplied by Hypertech from July 1, 2024.
In June, Cyara then launched the current proceedings against both Mr Mitchell and Hypertech.
Earlier this month, in Victoria’s Supreme Court, Hypertech was successful in striking out Cyara’s claims against it for vagueness.
However, Hypertech’s bid to have the whole case thrown out was unsuccessful, with Cyara granted leave to file its claim again.