Plaintiff Anthony Pompliano's latest move confirms that this litigation is just one big

2 publicity stunt for him. His lawyers filed a ho-hum opposition to a motion- something that

3 thousands of lawyers do in thousands of courthouses each day-but still felt compelled to trumpet

4 that umemarkable feat of civil procedure in a press release that practically hyperventilates.

5 But the substance of Pompliano' s opposition confirms a more troubling pattern: He cares

6 more about getting attention than getting things right. Recall that Pompliano initially filed a

7 private arbitration against Snap, as his employment agreement required him to do. After many

8 months of arbitration, he ginned up this complaint as a way to air his grievances in open court-

9 and in the media. But his original attorneys withdrew soon after Snap noted the falsity of his

10 complaint's central claim: that after firing him, Snap supposedly maligned him to the point of

11 making him unemployable. What Pompliano neglected to tell the Court then and now is that he

12 not only got a job soon after Snap terminated him, but he was also then promptly fired from that

13 job for poor performance. He then (in his well-worn pattern) hit that company too with a

14 complaint reciting vague allegations of fraud. See Pompliano v. Brighten Labs Inc. , Los Angeles

15 Superior Court Case No. BC613185; see also Def. Pet. to Compel Arb., pp. 2, 4.

16 Pompliano now resurfaces after three months of inactivity with new attorneys but the same

17 publicity-hungry game plan. In his latest dramatic installment, Pompliano doubles down on the

18 main canard from his complaint- that Snap gave investors misstated user metrics back in 2015-

19 by asserting that Snap is currently misleading investors. Both halves of that remarkable claim are

20 false. And they regrettably show that the thirstier Pompliano grows for attention, the more he

21 starves his filings of truth and common sense.

22 On his first contention: Snap did not give investors misstated user metrics back in 2015;

23 nor did Snap employees commit any of the panoply of alleged bad acts that litter Pompliano' s

24 complaint. Snap will demonstrate as much at the appropriate time in the appropriate forum. But

25 here is one example for the time being: Pompliano' s centerpiece claim is that in mid-2015 Snap

26 was overstating its daily active users ("DA Us"). He says Snap had solicited advertisers at that time

27 by "represent[ing] that Snapchat had over 100 million DAUs," when in fact the DAU count

28 generated by one computer program, Flurry, 'showed only 97 million DA Us,'' and the count
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 generated by another, Blizzard, "showed only 95 million DAUs." Cmplt. ~ 50, 55. Put aside for

2 the moment that this musty, two-year-old allegation about a minor metrics deviation hardly

3 measures up to Pompliano ' s gasping rhetoric about Snap being built "on a house of cards."

4 Opp. 1. The more important point is that the allegation is false. Snap was not telling advertisers or

5 investors in mid-2015 that the app had over 100 million DAUs. That, no doubt, is why Pompliano

6 fai ls to identify who made these supposed statements, to whom they were made, or how he is

7 aware of them. Moreover, by making much ado about the difference between the Flurry count and

8 the Blizzard count-which continues elsewhere in his complaint- Pompliano shows how

9 uninfo1med he is about the company- then and now. After all, Snap long ago switched over from

10 one system to the other, reduced its historical DA Us to account for the switch, told its investors as

11 much, and disclosed all this to the public twice over in its IPO prospectus. 1

12 Pompliano's new claim-that Snap is currently misleading investors- is even more

13 inexplicable. How a disgruntled employee fired for poor performance, who last worked at Snap

14 almost two years ago, would have any basis to talk about Snap's current practices is a mystery

15 Pompliano never bothers to explain. The simple fact is that he knows exactly nothing about Snap's

16 current metrics. He and his lawyers are- not to put too fine a point on matters-j ust making

17 things up.

18 That is why Snap has nothing to hide, especially now that it is a public company. When

19 Snap filed its motion to preserve the confidentiality of the redactions that Pompliano himself made

20 to his complaint, Snap was still a private company that jealously guarded the secrecy of

2 1 infom1ation that is now a matter of public record. Had Pompliano's new counsel been interested at

22 all in litigating the merits of this Motion or this case- rather than maximizing publicity

23 opportunities-arid contacted Snap to discuss the issues at hand, the parties likely would have

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" [B]efore June 2015, we used a third party that counted a Daily Active User when the
25 application was opened or a notification was received via the application on any device. We now
use an analytics platform that we developed and operate and we count a Daily Active User only
26 when a user opens the application and only once per user per day .... Additionally, to align our
pre-June 2015 Daily Acti ve Users with thi s new methodology, we reduced our pre-June 2015
27 Daily Active Users by 4.8%, the amount by which we estimated the data generated by the third
pai1y was overstated." Snap Inc. , Registration Statement (Fo1m S-1 IA), at 51 (Feb. 24, 20 17); see
28 also id. at 24.
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 1 reached a resolution that would have saved the Court unnecessary filings and time. Instead,

2 Pompliano's new counsel failed to even give Snap notice that they were substituting into this case

3 before filing his opposition (and issuing a press release about it). In any case, to relieve the Court

4 of the burden to resolve issues the parties could have resolved themselves, Snap withdraws its

5 Motion to Seal. Pompliano's unredacted complaint is attached as Exhibit 1 to this filing.

7 Dated: April 10,2017 ALLEN MATKINS LECK GAMBLE

MALLO Y &NATSIS LP
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10 ALEXANDER NESTOR
Attorneys for Defendant SNAP INC.
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EXHIBIT 1

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KILOMETER PARTNERS, LLP
DAVID I. MICHAELS (SBN 276100)
[email protected]
JUSTIN BROWNSTONE (SBN 193411)
[email protected]
631 N Larchmont Blvd., No. 1
Los Angeles, CA 90028
323-380-7211

Attorneys for Plaintiff

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

ANTHONY POMPLIANO, an individual, ) Case No. ____________

)
Plaintiff, )
)
)
v. )
) COMPLAINT FOR:
SNAP, INC., d.b.a. SNAPCHAT, a )
Delaware Corporation; and ) 1) MISREPRESENTATION
)
DOES 1 through 10, ) PREVENTING FORMER
) EMPLOYEE FROM
Defendants. ) OBTAINING EMPLOYMENT;
) CAL. LAB, CODE 1050 ET
) SEQ.
)
)
)
)
)

-6-
 Plaintiff, Anthony Pompliano (Plaintiff or Mr. Pompliano), by his undersigned

counsel, hereby complains against Defendant Snap, Inc. d/b/a Snapchat (Snapchat or the

Company), and Does 1 through 10, and alleges as follows, upon personal knowledge as to

Plaintiff and his own acts and upon information and belief as to those matters of which Plaintiff

does not have personal knowledge.

INTRODUCTION

1. This action arises out of the avarice of the small group of executives at the helm

of social media giant Snapchat who have been falsely representing its key performance

metricssuch as user growth and engagement figuresto investors in an effort to inflate

Snapchats valuation, with the ultimate goal of taking the company public through a multi-

billion dollar in initial public offering (IPO). Snapchat will not let anything stand in its way

of an IPO, including its obligations to represent material facts accurately.

2. Mr. Pomplianos refusal to participate in Snapchats institutional pandemic of

mispresenting key industry metrics to its investors and trading partners led to his unlawful

termination by Defendant Snapchat.

3. Driven by its fierce rivalry with Facebook a spurned suitor turned keen

competitor Snapchat fraudulently induced Mr. Pompliano away from Facebook to run

Snapchats new user growth and engagement team by falsely representing to him, among other

things, the Companys growth. Throughout the recruiting process, Snapchat represented to Mr.

Pompliano that Snapchat had been experiencing double-digit month-over-month growth in its

active user base, and that it had already acquired 100 million active daily users. Both metrics

were false.

4. At the outset of his remarkably short, three-week tenure at Snapchat, Mr.

Pompliano learned that these representations were false and that the Company used these same

false metrics in representations to advertisers, the public, and to private investors when raising

capital. Mr. Pompliano urged Snapchat to make corrective disclosures, but was rebuffed.
5. When Mr. Pompliano alerted Drew Boller, Snapchats Vice President of Finance

and the architect of Snapchats planned IPO, to the falsity of Snapchats representations, Mr.

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Boller agreed that the metrics Snapchat had been using were false, and that it was imperative

that they be corrected. Mr. Pompliano also informed Jill Hazelbaker, Snapchats Vice President

of Communications, that the company should stop falsely representing to advertisers and others

that it had 100 million daily active users. Mr. Pompliano further wrote to Brian Theisen,

Snapchats then-Director of Business Operations and a former Facebook employee, and

explained that the public and Snapchats advertisers were being misled, and urged that the

companys false representations be corrected. These efforts, which should have been rewarded,

wound up costing Mr. Pompliano his job.

6. Snapchats leadership saw Mr. Pompliano as an impediment to their planned

IPO because he refused to turn a turn a blind eye to Snapchats misrepresentations. Indeed,

Snapchat accurately perceived that Mr. Pompliano would blow the whistle should Snapchat

continue to misrepresent its user metrics to the public, advertisers, prospective employees,

private investors, or in connection with its planned IPO.

7. It also became quickly apparent that the real reason Snapchat hired Mr.

Pompliano away from Facebook was not to build a growth team, but for the nefarious purpose

of obtaining Facebooks confidential and proprietary information, and enlisting Mr. Pompliano

to help identify and poach key Facebook employees, notwithstanding the fact that Snapchat

knewand Mr. Pompliano repeatedly reminded themthat doing so would violate the

confidentiality and non-solicitation agreements he signed with Facebook. Snapchat

nevertheless repeatedly pressured Mr. Pompliano to breach his agreements by divulging

Facebooks confidential information and assisting Snapchat in soliciting Facebook employees.

Mr. Pomplianos refusal drew the ire of Snapchats senior management.

8. For these reasons, just three weeks into his tenure at Snapchat, the Company

retaliated against Mr. Pompliano by summarily and wrongfully terminating his employment in

violation of public policy. It is apparent that Snapchats conduct was malicious because,

among other things, Snapchat terminated Mr. Pompliano even though there was not a one
negative comment in his employment file.

///

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 9. Because the truth concerning Mr. Pomplianos termination was so potentially

damaging to Snapchats planned IPO, terminating him wasnt enough to ensure the public was

kept in the dark. Accordingly, post-termination, Snapchat has sought to destroy his career and

reputation by waging a smear campaign against Mr. Pompliano, by making false

representations concerning the circumstances of his termination.

10. Mr. Pompliano filed a lawsuit against Snapchat in arbitration (pursuant to a

contractual provision he signed), seeking redress for Snapchats egregious misconduct. In that

arbitration Mr. Pompliano seeks, among other things, damages for lost wages, significant harm

to his professional reputation, and punitive damages based on Snapchat intentional, wrongful,
deceptive, retaliatory, and malicious conduct.

11. In this action, Mr. Pompliano seeks an injunction to preserve the status quo

pending the outcome of the arbitration proceedings by preventing Snapchat from continuing to

make false representations concerning the circumstances surrounding Mr. Pomplianos

termination.

THE PARTIES

12. Mr. Pompliano is an individual working and residing in Los Angeles County.

Until the time of his wrongful termination, there existed an employer-employee relationship

and actual and implied employment contracts between Mr. Pompliano and Snapchat.

13. Defendant Snap, Inc. is a Delaware corporation that has its primary place of

business in the County of Los Angeles, California, and that its registered agent is Corporation

Service Company, dba Lawyers Incorporating Service, whose address is 2710 Gateway Oaks

Dr., Suite 150N, Sacramento, California 95833.

14. The true names and capacities of Defendants referred to herein as Does 1

through 10 are unknown to Mr. Pompliano at this time and Mr. Pompliano is informed and

believes that they are also partly responsible for the damages he has incurred. Mr. Pompliano

will amend this Complaint to allege their true names and capacities when ascertained.
15. Mr. Pompliano is informed and believes, and thereon alleges, that at all material

times each Doe Defendants actions and conduct were known to, authorized, and ratified by

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Snapchat and/or its agents.

16. Mr. Pompliano is informed and believes, and thereon alleges, that Snapchat

committed other wrongful acts or omissions of which Mr. Pompliano is presently unaware.

Such acts are ongoing and will continue after the filing of this arbitration claim. Mr. Pompliano

expressly reserves the right to amend his Complaint when he discovers the other acts and

omissions of such Defendant(s) and additional claims against it/them.

GENERAL ALLEGATIONS

Plaintiff Anthony Pompliano

17. Plaintiff Anthony Pompliano is a decorated war veteran, and a leading expert in
the specialized field of developing and testing growth strategies for social media Internet

companies. His background amply prepared him for the significant leadership roles that he has

undertaken in recent years.

18. Mr. Pompliano served his country for nearly seven years in the United States

Army, where he rose to the rank of Sergeant. Mr. Pompliano graduated from the Armys

Warrior Leader Course as well as its Infantry Leadership Schoolcourses that focus on

leadership, decision making, strategy, and ability to execute in extremely high-stress situations.

He was named Distinguished Leader Graduate and Commandants List Graduate,

respectivelyawards given only to the top 1-2% of all graduates.

19. In 2008, Mr. Pompliano deployed to Iraq to fight in Operation Iraqi Freedom.

During his 13-month deployment, he led his squad in hundreds of combat missions, including

route clearance and high-value target cordon and searches. Mr. Pompliano received numerous

awards and medals for his service, including the Combat Action Badge.

20. Mr. Pompliano completed his bachelors degree with a double major in

economics and sociology at Bucknell University in 2011, during which time he worked as a

network engineer and global security specialist for the New York Stock Exchange and as a

network engineer for Neteffect.

21. Mr. Pompliano went on to co-found The Community Corkboard, the largest

public school advertising network in the country. The Community Corkboard empowered

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public school districts to combat funding cuts with professional, online advertising. The

company was acquired in June 2012.

22. In January 2013, Mr. Pompliano founded DigaForce, a leading social

intelligence company specializing in demographic and psychometric measurement. Under his

leadership, DigaForce was named the Second Most Promising Startup in Sports by MIT and

ESPN, before being acquired in December 2013 by Strategic Link Partners.

23. Leveraging his experience building successful Internet startups, in February

2014, Mr. Pompliano was recruited to join Facebook, where he led the Growth & Engagement

initiatives for Facebook Pages. While at Facebook, Mr. Pompliano helped to launch numerous
products, including AMBER Alerts and Voter Registration, while also advising Facebooks top

executives on their social media strategy. Mr. Pompliano was well-compensated at Facebook,

receiving both a generous salary and significantly appreciating stock and stock options.

Key Performance Metrics In The Social Media Industry

24. Virtually every social media application collects and analyzes data from the

activity of user accounts in order to understand how users engage with the application. Certain

user engagement metrics derived from such data have emerged as key indicators of an

applications performance. Some examples of these key performance indicators (KPIs)

include an applications: Daily Active Users; Monthly Active Users; User Retention Rate;

Active User Growth Rate; Registration Completion Rate; Installations; Frequency; Session

Length; Average Revenue Per User.

25. KPIs are used to measure an applications growth, rate of user retention, depth

of user engagement, and to help create strategies for improving such core metrics, which is

critical to success. It is therefore common for social media companies to broadcast their KPIs

publicly as a way to showcase their success.

26. Given the importance of an applications KPIs, it is standard industry practice to

employ sophisticated data analytics methods and testing to ensure the validity of KPIs and to
develop intelligent strategic growth and user engagement initiatives based on analyses of the

numbers.

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 27. Snapchat, however, never invested in building a user growth and engagement

team to employ such sophisticated data analytics methods, because Snapchat CEO Evan

Spiegel simply did not care about user engagement metrics. As a resultunlike mature social

media companies such as Facebook and TwitterSnapchat lacks even the most basic the

internal controls to ascertain and/or verify its KPIs.

28. At the same time, however, Snapchat relies heavily on its KPIs to trumpet its

growth as means of attracting advertising revenue and investor capital. In other words, when it

is financially incentivized to do so, Snapchat gladly trumpets numbers it knows to be either

unreliable or simply false.

29. Snapchat realized that going through an IPO process would subject the company

to a much higher level of scrutiny than its prior, private securities offerings. In particular,

Snapchat knew it would need to be perceived as a mature organization. And because mature

organizations in the social media space take their KPIs seriously, by mid-2015, Snapchat made

it a top priority to hire a high-level executive to create and lead a new growth team at the

Company.
Snapchat Aggressively Recruits Mr. Pompliano Away From Facebook To Lead The
Companys New Growth Initiative

30. Snapchat recognized that hiring Mr. Pompliano would represent a twin coup,

given the demonstrated talent he would bring to Snapchat and its new growth initiative, and the

loss it would represent to Snapchats industry rival, Facebook. Snapchats top-ranking

executives thus recruited him aggressively.

31. In July and August 2015, Mr. Pompliano had a series of telephonic interviews

with a number of senior executives at Snapchat. All of the interviews went exceedingly well.

32. On Monday, August 10, 2015, Snapchat flew Mr. Pompliano to Los Angeles for

additional rounds of interviews with Snapchats most senior executives at its Venice, California

headquarters. All of these executives gave Mr. Pompliano a hard-sell and assured him that
Snapchat was committed to implementing a robust growth strategy and that their historic

refusal to do so was a thing of the past.

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 33. Mr. Khan gave Mr. Pompliano a particularly hard-sell. Eager to convince him to

join Snapchat, Mr. Khan repeatedly trumpeted to Mr. Pompliano that Snapchat was

experiencing double-digit month-over-month growth in its DAUs, and further represented that

the company was the fastest on record among social media platforms to acquire 100 million

DAUs. These representations were false, and were typical for Mr. Khan, who made similar

misrepresentations when he was raising capital for Snapchat in the Asian markets, including in

soliciting a $200 million investment from the Chinese ecommerce giant Alibaba Group

Holding Ltd.

34. The very next day, Tuesday, August 11, 2015, Snapchat contacted Mr.
Pompliano to inform him that CEO Evan Spiegel wanted him to fly back down to Los Angeles

the next day to meet with him; Mr. Spiegel said it was urgent that he do so. Accordingly, Mr.

Pompliano flew back to Los Angeles on Wednesday, August 12, 2015, to meet with Mr.

Spiegel.

35. When the two met, Mr. Spiegel asked Mr. Pompliano if he could address any

concerns he had with joining the company. Mr. Pompliano inquired into Mr. Spiegels

commitment to building and supporting a growth team at Snapchat, and asked him to comment

on Snapchats failure to do so up to that point. Mr. Spiegel assured Mr. Pompliano that

Snapchat was fully committed to building a full-scale growth team around him, and asked him

what he would need to build such a team. Mr. Pompliano painted a detailed picture of a fully-

functioning growth team of about 40 people. Mr. Spiegel assured Mr. Pompliano that if he

joined Snapchat, they would build such a team around him.

36. That Friday, August 14, 2015, Mr. Pompliano received a job offer from

Snapchat with a compensation package that he was told was massive and unprecedented.

Later the same day, Snapchat emailed Mr. Pompliano his formal offer letter, along with a

Confidential Information and Inventions Assignment Agreement, and an Arbitration

Agreement, as attachments. (A true and correct copy of the Arbitration Agreement is attached
hereto as Exhibit A.) The letter offered Mr. Pompliano the position of Growth Lead, with a

healthy annual salary and an award of restricted stock units (RSUs) subject to approval by

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Snapchats Board and a four year vesting schedule.

37. Snapchat told Mr. Pompliano it was very important that he sign and return the

three documents the same day and that he commence work at Snapchat the following

Mondayi.e., resign his position with Facebook that day (a Friday) without giving any notice,

uproot his life in Northern California and move to Los Angeles over the weekend, and start a

new job on Monday, all in less than three days. Mr. Pompliano informed Snapchat that he

could not just abandon his position at Facebook without giving them two weeks notice, which

he did the following Monday.

38. News of Mr. Pompliano joining Snapchat was leaked to a news reporter at
TechCrunch, a popular technology blog, who wrote an article on Mr. Pomplianos departure

from Facebook to lead Snapchats growth team. There was a media frenzy over the

announcement in the days that followed; the story was picked up by the Los Angeles Times, as

well as industry news sources including The Drum, Learn Bonds, and CampaignLive.

39. When Mr. Pompliano joined Snapchat on August 31, 2015, however, everything

changed. Behind the curtain was a very different company than the mature organization

committed to building a growth team that he was sold by Snapchats senior executives during

the recruiting process.

Mr. Pompliano Is Told By His Superiors That His Role Is Not What Was Promised, In
Violation Of The Express Terms Of His Employment Agreement

40. For reasons not entirely clear to Mr. Pomplianoperhaps it was the media

frenzy covering Mr. Pomplianos hire, which did not occur when Mr. Theisen joined the

company, or Mr. Theisens knowledge that Mr. Pompliano received a higher salaryTheisen

sought to marginalize Mr. Pomplianos role from the get-go.

41. In particular, on Mr. Pomplianos third day at Snapchat, Mr. Theisen called Mr.

Pompliano into his office (just after the TechCrunch article announced that Mr. Pompliano was

to run Snapchats Growth team) to admonish him, stating youre not here to run the Growth
Team, youre here to work on Growth. This notwithstanding every Snapchat executives

representations to the contrary and Mr. Pomplianos offer letter which stated his position was

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Growth Lead.

42. Two days later, Mr. Theisen announced that he was changing the name of his

own department from Business Operations to Growth & Revenue, in a transparent attempt

to further marginalize Mr. Pompliano for no other reason than Mr. Theisens insecurities.

Snapchat Immediately Begins To Pressure Mr. Pompliano To Violate His Confidentiality

and Non-Solicit Agreements

43. Throughout his shockingly brief, three-week tenure there, Snapchat repeatedly

pressured Mr. Pompliano to divulge Facebooks confidential information in violation of

contracts he signed with Facebook, about which Snapchat was well aware, in no small part
because Mr. Pomplianoa person whose standard of ethics would not bend to the significant

pressure his new employer imposed on himwas placed in the tenuous position of having to

remind Snapchat repeatedly.

44. For example, on September 22, 2015, Mr. Pompliano was contacted by

Snapchats recruitment office, and asked if he would interview a candidate who currently

worked at Facebook, with full knowledge that he was subject to a non-solicitation agreement

with Facebook. In an email exchange, Mr. Pompliano declined, citing his non-compete and

non-solicitation agreement with Facebook, which barred him from actively recruiting

employees from his former employer.

45. Similarly, Mr. Khan called Mr. Pompliano into his office for a meeting on

September 4, 2015, and demanded that Mr. Pompliano draw a detailed organizational chart of

Facebook, name the key employees, and identify which ones were particularly talented and

could be poached by Snapchat. [Mr. Pompliano explained that his confidentiality agreements

with Facebook and his confidentiality agreement with Snapchat both barred him from revealing

such information], and therefore provided only publicly available information and declined to

provide further details concerning Facebooks key employees. This frustrated Mr. Khan, who

viewed Mr. Pomplianos ethics as betrayal.

///

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 46. Remarkably, Snapchats misconduct was in violation of its own policies, which

expressly represent to employees (including to Mr. Pompliano) in employment agreements:

You are being offered employment at Snapchat because of the personal skills and
experience you have, not because of any confidential, proprietary, for trade-secret
information of a former or current employer you may have. In your work for
Snapchat, we do not want you to use or disclose any such confidential.
Proprietary, or trade-secret information.

Mr. Pompliano learned the hard way that Snapchats representation was patently false.

Mr. Pompliano Uncovers An Institutional Pandemic Of Incompetence In Tracking And

Calculating Key Performance Metrics Snapchat Was Disclosing To The Public And To
Investors

47. On his second day, Mr. Pompliano met with his initial team members, data

analysts Jie Liu and Shizhang Ben Wu. Mr. Pompliano knew both of them as former

Facebook analysts. Messrs. Liu and Wu were happy that Mr. Pompliano had joined Snapchat

because they hoped his addition meant that Snapchat would begin taking their data collection

and analytics methodsor, more accurately, the lack thereofmore seriously. They explained

Snapchats institutional aversion to analyzing user data, and its utter incompetence in doing so.

In the off-chance Snapchat did run basic testing, it resulted in data sets that were completely

unreliable. They walked Mr. Pompliano through a number of examples of Snapchats

institutional incompetence with regard to its key data.

48. The bleak picture painted by the two analysts caused Mr. Pompliano to run tests
to verify all of Snapchats KPIs. As his first order of business, he sought to obtain the current

metrics concerning Snapchats DAUs and its historical active user growth rate, to establish

benchmarks from which his success as the head of Snapchats new growth team would be

measured going forward.

49. What Mr. Pompliano learned from Messrs. Liu and Wu was shocking: they

explained that Snapchat had no method in place to measure its DAUs that was close to accurate

by industry standards. Rather, Snapchat crudely relied upon two different figures being
generated, using two different programs and data sets. Neither was accurate. The first method

used a program called Flurry, which was based on external analytics and included in its count a

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variety of push notifications (i.e., messages sent by Snapchat to users which, if opened, would

count as user activity even if the user did nothing further) and led to overstated DAUs. The

second method used a program called Blizzard that was based on an internal data pipeline and

undercounted DAUs because it missed older users.

50. Upon reviewing the results from each program, Mr. Pompliano was surprised to

see that even the exaggerated count generated by Flurry showed only 97 million DAUs and

Blizzard showed only 95 million DAUs, less than the 100 million DAUs Theisen and Khan

repeatedly claimed during the recruiting process Snapchat had already achieved. Concerned

that Snapchats management was misinformed about key user engagement metrics it was
widely disseminating, Mr. Pompliano asked his team to obtain all of the available data going

back to January 1, 2015, to conduct further due diligence.

51. Mr. Pompliano applied a variety of analytical tools to rigorously measure DAUs

at several points between January 1, 2015, and September 1, 2015. Once again, he was shocked

to learn that Snapchats purported double-digit month-over-month DAU growth rate that

Messrs. Theisen and Khan had represented to him was false and grossly overstated. In fact,

Snapchats DAU growth rate was often flat, or at times ranged from 1% to 4% per quarter

during that nine-month period, a far cry from double-digit month-over-month growth.

52. Such glaring inaccuracies deeply concerned Mr. Pomplianonot only because

Snapchats most senior executives were, at best, completely misinformed about the companys

most fundamental user growth and engagement metricsbut also because, as a seasoned

growth and engagement expert, he found it incredible that a social media giant like Snapchat

could use such crude data collection and reporting methods. Accordingly, as any reasonable

growth executive would have done, Mr. Pompliano dug deeper. What he uncovered was a

wide-spread, systemic failure in Snapchats internal controls over its user data.

53. Among the additional major inaccuracies Mr. Pompliano identified was one

having to do with another social media KPI: Snapchats registration flow completion rate. That
is, the percentage of users who complete the Snapchat registration process, compared to the

number of users who only begin the registration process. Mr. Pompliano learned that Mr.

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Spiegel and others on the executive management team were representing to investors,

advertisers, the press, and others that 87% of potential users completed the registration process,

when the data showed that the number was, in fact, less than 40%.

54. Mr. Pompliano also determined that another KPI used by Snapchat, its user

retention rate, was woefully inaccurate. The company had been representing that it was losing

around 60% of its users after 7 days, resulting in a roughly 40% retention rate, when the data

showed that its retention rate was, in fact, closer to 20%.

Mr. Pompliano Presents His Findings To Snapchat, Who View The Information Only As
A Threat To Snapchats IPO, So Instead Of Taking Appropriate Curative Action, They
Shoot The Messenger

55. Mr. Pompliano had seen hard copies of marketing brochures used to solicit

advertisers that represented that Snapchat had over 100 million DAUs, and was therefore

concerned that advertisers, and others, were being misled. Accordingly, Mr. Pompliano

contacted Jill Hazelbaker, Snapchats Vice President of Communications, and informed her

that the company should stop representing that it had over 100 million DAUs as this was not

accurate. Ms. Hazelbaker told Mr. Pompliano that she was aware of the issue and had

repeatedly raised it internally, but Snapchat ignored her.

56. Mr. Pompliano also told Mr. Khan about his findings concerning Snapchats

wildly inaccurate KPIs and explained the support he would need to turn things around. Mr.
Khan feigned agreement, and said he would arrange a meeting with the CEO, Mr. Spiegel, so

that Mr. Pompliano could present his findings.

57. In anticipation of the meeting, Mr. Pompliano began creating a PowerPoint

presentation to interpret and summarize the results of his deep analytics applied to Snapchats

data, in order to give Snapchats executive management team an accurate picture of Snapchats

true user metrics and to identify the errors he found in several of Snapchats KPIs, including its

DAUs, active user growth rate, user retention rate, and user registration completion rate.
58. Given the importance of the presentation, Mr. Pompliano was exceedingly

diligent in preparing it. He circulated drafts of his presentation to a number of analysts to

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confirm the underlying data and obtain their input. He also solicited the input of many other

Snapchat executives to ensure he received their buy-in, including from Messrs. Theisen and

Khan, to whom he sent multiple drafts of the presentation prior to the meeting. He sent the final

version of the presentation to the persons who were scheduled to attend the meeting where Mr.

Pompliano would present his findings: Messrs. Spiegel, Theisen, and Khan.

59. On September 11, 2015, Mr. Pompliano met with Messrs. Spiegel, Theisen, and

Khan to present his findings. It was clear that Snapchat had no interest in hearing the

information Mr. Pompliano presented. In fact, Mr. Spiegel was inexplicably enraged

throughout the meeting and refused to listen to anything Mr. Pompliano said, constantly cutting
him off and summarily dismissing his points. By way of example:

a. Mr. Spiegel began flipping through the presentation and skipped over its

most important sections. Mr. Pompliano asked if he had read those slides, as they

contained vital business intelligence and data. Mr. Spiegel responded dismissively,

Yeah, I read those; it doesnt matter and further stated that Mr. Pompliano was

wasting his time. Mr. Pompliano explained that he and Snapchats analysts had

examined the data carefully, and the results were accurate and not susceptible to any

other interpretation. Facts are facts; but Snapchats executivesespecially Mr.

Spiegelstubbornly refused to hear them.

b. Mr. Pompliano raised the serious issue of Snapchats misreported DAUs.

Again, Mr. Spiegel would hear nothing of it; he told Mr. Pompliano it was no big deal

that Snapchats public statements that it had over 100 million DAUs were false. Mr.

Pompliano disagreed, stating, its actually a very big deal.

c. Mr. Pompliano also identified several proven strategies to grow

Snapchats user base that Snapchat was not utilizing, Mr. Spiegel again spurned him.

For example, the data showed that Snapchats international user metrics were very low,

even in countries with high-levels of social media engagement, such as Spain and India.
When Mr. Pompliano attempted to explain that he could implement strategies to

achieve significant growth for Snapchat in these major markets, Mr. Spiegel abruptly

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 cut in and said, This app is only for rich people. I dont want to expand into poor

countries like India and Spain. Mr. Spiegel would not entertain any further discussion

on the matter.

60. Mr. Spiegel abruptly ended the meeting by instructing Messrs. Khan and

Thiesen to fix the problem and then he stormed out of the room. On information and belief,

Spiegel, Khan, and Theisen subsequently met in private where they decided that Mr. Pompliano

presented a risk to Snapchats IPO. In particular, unlike Messrs. Khan and Theisen, Mr.

Pompliano was not going to be a yes-man to Mr. Spiegel when that meant turning a blind eye

to the facts and making false representations concerning Snapchats growth and value.
Moreover, Snapchat became concerned that Mr. Pompliano would blow the whistle on

Snapchat if they did not take corrective action, which they had no intention of doing.

Accordingly, Mr. Spiegel instructed Messrs. Khan and Theisen to get rid of Mr. Pompliano.

61. It became painfully clear at the meetinga mere two weeks into Mr.

Pomplianos tenure at Snapchatthat Snapchats senior executives, in particular, Spiegel,

Theisen, and Khan, saw the information Mr. Pompliano brought to their attention only as a

threat to their planned IPO, and they had no interest in taking any of the reasonable measures

he proposed to ensure the accuracy of Snapchats disclosures.

62. Given Snapchats contumacy, during the week of September 14, 2015, Mr.

Pompliano emailed Mr. Theisen, stating that Snapchat had to stop misrepresenting its user

metrics, as they were misleading the public. He further stated that he had been doing this long

enough to know that if Snapchat continues misrepresenting its KPIs it will come back to bite

them. Mr. Theisen responded that he agreed that they needed to address this issue.

63. The same week, Mr. Pompliano spoke with Snapchats Vice President of

Finance and acting Chief Financial Officer, Drew Boller. Mr. Boller said he understood that

growth was the key to Snapchats success, in particular because it was laying the groundwork

for an initial public offering, and told Mr. Pompliano that he was therefore the person
responsible for their future. Mr. Boller also told Mr. Pompliano that he understood that the

metrics Snapchat had been using were wrong, and therefore their representations were

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inaccurate and should be corrected.

64. In response to Mr. Spiegels directive at the September 11 meeting to fix the

problem, Messrs. Theisen and Khan instructed Mr. Pompliano to prepare a further PowerPoint

presentation purportedly to address Mr. Spiegels questions around a specific data set he asked

about at the parties meeting. In reality, this was nothing more than a callous and misguided

attempt by Snapchat to manufacture a basis to terminate Mr. Pompliano.

65. In response to the directive from his superiors, Mr. Pompliano began creating a

second presentation that provided a constructive critique of Snapchats metrics, proposed

solutions to the problems, including better and more accurate ways to track and analyze
available data, and addressed Mr. Spiegels questions concerning friending data. Once again,

Mr. Pompliano circulated a draft of the presentation to analysts Ben Wu and Jie Liu, as well as

Director of Engineering Ilya Henkesen, Mr. Theisen and Vice President of Engineering Tim

Sehn, for their input.

66. Mr. Pompliano emailed the final draft to Messrs. Spiegel, Theisen, and Khan, on

or about September 17, 2015. Mr. Theisen sent back to Mr. Pompliano a summary of Mr.

Spiegels criticism after Mr. Spiegel reviewed the PowerPoint presentation. Once again, it was

clear that Mr. Spiegel did not take well to the data that Mr. Pompliano presented concerning

Snapchats faulty measurement methods. In reality, Mr. Spiegels critique was done solely to

manufacture a basis to terminate Mr. Pompliano. In any event, Mr. Spiegels critique was crude

and misguided. Accordingly, Mr. Pompliano responded to the critique in a document circulated

to, among others, Mr. Theisen, in which he systematically dismantled Mr. Spiegels misguided

criticism.

67. On September 18, 2015, Mr. Theisen sent Mr. Pompliano a seemingly

innocuous invitation to a meeting for the ostensible, but ultimately false, purpose of having a

growth sync discussion with Mr. Theisen. When he arrived at the meeting, however,

Snapchats new head of Talent and Human Resources, Stacie Thomas, was in attendance. Ms.
Thomas had replaced Simmi Singh, who had been terminated only the week before.

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 68. As it turned out, the purpose of the meeting was far more nefarious than Mr.

Theisens seemingly innocuous email suggested. Mr. Theisen appeared highly stressed and was

stumbling over his words; he began by explaining that Mr. Pomplianos style and approach

were different to others at Snapchat, in particular Evan Spiegel, and then simply said, so we

are going to have to let you go. Mr. Theisen asked Mr. Pompliano if he had any questions.

Shocked, Mr. Pompliano asked why he was being terminated, and Mr. Theisen, was only able

to mumble that the directive came from the top, that it was Evan.

69. Mr. Theisen left, and shortly thereafter a security guard arrived with a box with

Mr. Pomplianos personal items, while his smart phone was wiped of any Snapchat accounts
and data. Mr. Pompliano was then escorted from Snapchats premises. Mr. Pompliano was

terminated a mere three weeks into his tenure as a Snapchat employee.

Snapchats Efforts To Discredit Mr. Pompliano and Destroy his Career, and The Need
For Immediate Injunctive Relief

70. As a result of his abrupt and wrongful termination by Snapchat, Mr. Pompliano

has been deprived of his position as Growth Lead, his salary, and his Snapchat stock. Mr.

Pomplianos wrongful termination by Snapchat has also caused serious and irreparable damage

to his professional reputation in his rarefied field of work, and emotional distress. Mr.

Pomplianos hiring based on false representations and abrupt termination by Snapchat also

caused him to lose his valuable position and good reputation, salary and significant stock

options at Facebook.

71. Simply terminating Mr. Pompliano wasnt enough for Snapchat, however. To

ensure that the widespread incompetence and false representations that Mr. Pompliano

uncovered at Snapchat did not get in the way of its IPO, Snapchat took preemptive measures to

discredit Mr. Pompliano. In particular, Snapchat falsely represented to Snapchat employees

and to third parties, including high-ranking executives in the social media industry, that Mr.

Pompliano was terminated three weeks after he was hired because he was incompetent. In
reality, however, Mr. Pompliano was terminated because he refused to participate in a scheme

to deceive the public and artificially inflate Snapchats valuation in anticipation of its IPO.

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 72. For example, Mr. Pompliano was in talks with a major social media company

about a filling a senior executive role with the company. The discussions had advanced

considerably and Mr. Pompliano had received glowing feedback and enthusiasm about his

prospective role with the company. On a near daily basis, Mr. Pompliano was communicating

with a number of the companys top executives, all of whom would promptly respond to Mr.

Pomplianos inquiries.

73. The company, however, abruptly cut off all communications with Mr.

Pomplianonotwithstanding its enthusiasm about Mr. Pomplianos candidacysoon after it

contacted Snapchat to inquire into Mr. Pomplianos short tenure there. Because Snapchat
would not jeopardize its IPO, Snapchat falsely claimed that Mr. Pompliano was terminated

because he was incompetent, notwithstanding the fact that he had been employed by Snapchat

for a mere three weeks and had not received a single negative review.

74. Snapchat has made similar false representations about Mr. Pompliano to its own

employees.

75. These false representations have severely damaged Mr. Pomplianos reputation

and career prospects. He therefore seeks an injunction preventing Snapchat from doing any

further damage to his reputation and career during the pendency of the arbitration.

76. The Arbitration Agreement provides, in relevant part: Nothing in this

Arbitration Agreement will prevent either party from seeking a preliminary injunction (or other

provisional remedy) in court to preserve the status quo before the arbitrator issues his/her

award.

77. Defendant Snapchat has been falsely representing and continues to falsely

represent to a wide-range of entities and leaders in the social media industry that it terminated

Mr. Pomplianos employment a mere three weeks after he was hired because he was not

adequately performing in his position at Snapchat. Such representations were false and

malicious and made with the express of covering up Snapchats false representations to
investors and to the public.

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 78. Therefore, pursuant to the Arbitration Agreement, Mr. Pompliano requests that

this Court grant provisional injunctive relief and order Snapchat to maintain the status quo

pending resolution of the arbitration with Mr. Pompliano.

FIRST CAUSE OF ACTION

(Misrepresentation Preventing Former Employee from Obtaining Employment in
Violation of Cal. Lab. Code 1050 et seq., against all Defendants)

79. Plaintiff repeats, realleges and incorporates by reference the allegations of

paragraphs 1 through 78 as though set forth fully herein.

80. California Labor Code section 1050 et seq., makes it unlawful for any person, or
agent or officer thereof, who, after having discharged an employee from the service of such

person or after an employee has voluntarily left such service, by any misrepresentation prevents

or attempts to prevent the former employee from obtaining employment.

81. California Labor Code 1054 creates a private right of action by a former

employee who is damaged pursuant to section 1050 to recover treble damages against the

former employer. C.C.P. 1054 ([A]ny person or agent or officer thereof, who violates any

provision of sections 1050 to 1052, inclusive, is liable to the party aggrieved, in a civil action,

for treble damages.).

82. While employed at Defendant Snapchat, Mr. Pompliano complained to his

superiors about Snapchats repeated false representations to advertisers, to investors, and to the

public concerning its KPIs.

83. As a result, Defendant Snapchat terminated Mr. Pompliano on September 18,

2015, a mere three weeks after he started working for Snapchat.

84. After his termination, Mr. Pompliano was being recruited by a social media

company to fill a high level executive position with the company. In addition, Mr. Pompliano

was presented with a number of other business opportunities in the social media industry.

85. All such prospective employment and business opportunities disintegrated when
Defendant Snapchat was contacted to inquire into Mr. Pomplianos employment there.

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 86. Defendant Snapchat made material misrepresentations to those making such

inquiries, thereby preventing Mr. Pompliano from gaining employment after termination.

87. Mr. Pompliano was harmed and continues to be harmed by Snapchats

misconduct.

88. Defendant Snapchats conduct was a substantial factor in causing Mr.

Pomplianos harm.

89. Defendant Snapchat deprived Mr. Pompliano of his right to report wrongful

activity to his supervisors without retaliation and termination. In committing the foregoing

acts, Mr. Pompliano is entitled to reinstatement and/or reimbursement for lost wages and work
benefits caused by the actions of Defendant Snapchat, plus attorneys fees and costs.

90. In committing the foregoing acts, Defendants were guilty of oppression, fraud,

and malice, and, in addition to the actual damages caused thereby, Mr. Pompliano is entitled to

recover damages for the sake of example and by way of punishing Defendants.

91. Wherefore, PLAINTIFF prays of judgment as set forth below.

PRAYER

WHEREFORE, by virtue of the foregoing acts complained of in this Complaint, Mr.

Pompliano prays for a judgment against Defendant as follows:

(a) A Preliminary Injunction Order issue immediately, pursuant to which

Defendant, directly or indirectly, and whether alone or in concert with others, including

any officers, agents, employees and/or representatives, shall be required to maintain the

status quo between the parties until such time as an arbitrator can render a final and

non-appealable award, including by refraining from making any misrepresentations to

any third party concerning the facts or circumstances surrounding Mr. Pomplianos

termination from Snapchat prior to such final and non-appealable award; and,

(b) An award of costs of suit herein incurred, including any interest at the legal

rate; and,
(c) An order of exemplary damages due to Defendants' malice, oppression and

fraud;

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 (d) An award of the attorneys' fees and costs incurred by Plaintiff;

(e) An award of pre-judgment and post-judgment interest and costs of this action

against Defendants;

(f) For such other and further relief as the Court deems just and proper.

Dated: January 4, 2017 KILOMETER PARTNERS, LLP

By:
DAVID I. MICHAELS (SBN 276100)
631 N Larchmont Blvd., No. 1
Los Angeles, CA 90028
323-380-7211
[email protected]

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EXHIBIT A

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