PayPal is suing Google and two of its executives following today’s announcement of Google Wallet, claiming that former PayPal employees who worked on the project have violated their contractual obligations.

PayPal claims that former PayPal executive Osama Bedier shared trade secrets with Google, and that Stephanie Tilenius, also a former PayPal executive, violated her contract by enticing Bedier to jump ship.

At Google, Tilenius is the VP of Commerce and Bedier is the VP of Payments, putting them in a line of fire where conflicts with the payment processing giant are inevitable. Tilenius came to Google in 2009 after a nine year stint at eBay where she turned PayPal merchant services into a billion dollar business.

Bedier left PayPal in January, an eight year stint that he capped off as VP of mobile, among other things, giving PayPal good reason to be suspicious of his role in Google Wallet.

Bloomberg quotes the complaint as saying that Bedier “is now leading Google’s efforts to bring point of sale technologies and services to retailers on its behalf. Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers.”

This news comes out just a day after PayPal director Anuj Nayar hit out at Square, a startup competitor, saying that it was superficial and not as revolutionary as proponents suggested. In that post I wondered whether PayPal is having a case of sour grapes or if they are offering valid criticisms. Today’s move makes it seem more like the former.