Online real estate marketplaces Ten-X and CREXi, Inc. have agreed to settle Ten-X’s lawsuit relating to CREXi’s theft of trade secrets and breach of contract.

The settlement agreement concerns a complaint filed by Ten-X in California Superior Court against CREXi and its founder Michael DeGiorgio in April 2016. The lawsuit maintained that in order to launch the CREXi business, DeGiorgio misappropriated Ten-X trade secrets, violated a proprietary information and inventions agreement, breached a duty of loyalty to Ten-X, and took steps to conceal this misconduct.

Under the terms of the settlement agreement, CREXi will pay $1.6 million to Ten-X. In addition, CREXi will be subject to certain ongoing restrictions, including a prohibition against using Ten-X property.

In a joint statement released by the parties, Mike DeGiorgio said: “We apologize to Ten-X for the actions which led to this lawsuit. I regret my conduct at the time I departed Ten-X and believe that the settlement is a fair resolution.”

Ten-X CEO Tim Morse stated: “We are pleased that this litigation has been brought to a successful resolution by our legal team. Ten-X has a 10-year track record of bringing innovation to the commercial real estate marketplace, and our employees expend tremendous effort developing products and services to create greater efficiencies for real estate buyers, sellers and brokers.”

Added Morse: “These legal proceedings highlight the very serious consequences that face entrepreneurs who steal the intellectual property of a former employer to launch a venture that competes with that employer. We hope that the outcome of this matter – both the injunction we obtained in the fall and the ultimate settlement of the case — sends a message that Ten-X will vigorously protect its rights when necessary.”