N/APosted on - 11/27/2014
I came to know that Netflix has filed lawsuit against Mike Kail the former VP of the company from 2011 till August of 2014. He is currently the CIO of Yahoo. It was really shocking news that the company has filed the case after he has departed the company few months back. What is the real reason behind Netflix to sue its former VP Mike Kail?
Why did Netflix sue its former VP, Mike Kail?
This is a very odd case where a former employer sues a former employee because the latter is no longer associated with the company. Netflix Inc. sued Mike Kail, its former Vice President of IT Operations, for kickbacks. Mike Kail worked for Netflix for 3 years. His job is related to purchasing of services or computer gears from outside companies.
At the moment, Mike Kail is the CIO or the Chief Information Officer at Yahoo Inc. According to the case, Netflix would purchase tech services. But without their knowledge, they didn’t realize that the suppliers were in fact paying an additional fee to a company called Unix Mercenary, the company Mike Kail kept on the side.
When the transaction is done, Kail himself would sign off the bill. According to them, Mike Kail’s “consulting fees” were anywhere from 12 percent [12%] to 15 percent [15%]. This is for every invoice. Netflix refers to some invoices it paid to outside software companies NetEnrich and Vistara. Like for example, when Vistara charged $105,000 to Netflix for a month of work in December, this transaction allegedly paid $15,750 to Kail’s side firm.
According to Netflix, they paid both firms NetEnrich and Vistara $3.7 million which then puts Kail’s kickbacks at around $490,000. Both firms are controlled by the same executive, Raju Chekuri.