Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

When Your Former Boss Sues You for Starting a Startup

medium.com

Post reply on HN
Print view View original

151–160 of 241 posts

Re: When Your Former Boss Sues You for Starting a Startup

#151

Post by hga »

jheriko wrote: post #131

this guy needs to be careful. 1.) people reading this won't pay attention or understand the fine detail 2.) non-compete clauses etc. are there because learning on the job gives an advantage to starting up after leaving. should have researched legal precedent and played it safe imo. waited two years and set up somewhere geographically remote from the original employer... i hope this plays out well. as much as there wa…

Non-competes for the targeted employees are completely unenforceable in California, where both companies are based, from long standing statutory and case law.

Many believe that law has more than a little to do with the success of Silicon Valley/the Bay area's tech concentration, which has long and far surpassed all others in the US.

Re: When Your Former Boss Sues You for Starting a Startup

#152

Post by sandworm101 »

anseljh wrote: post #148
sandworm101 wrote: post #140

Earlier quoted context omitted.

No. The tradition is old. The law has been revisited and updates many hundreds of time.

Um. That "old" "tradition" is binding law until it's overruled. It hasn't been. Again, here are the current California trade secrets statutes: http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...

Lol, accepting your 'tradition' argument (I don't) any such traditions would be overturned by the very statute you cite.

"3426.8.This title shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this title among states enacting it."

That's the law. It overturns everything prior. All commonlaw interpretations (the closest legal thing to tradition) before it are void in the face of this new law.

Fyi. California's law is actual a cut-and-past of the Uniform Trade Secrets Act as adopted by basically every other state in the union. See https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act.

Re: When Your Former Boss Sues You for Starting a Startup

#153

Post by 7Figures2Commas »

jnbiche wrote: post #142
7Figures2Commas wrote: post #48

Earlier quoted context omitted.

> It will take probably two years for the case to get fully adjudicated... During which time many prospective investors, partners and customers won't want to touch you with a 10 foot pole. > ...and the legal recourse for preventing frivolous lawsuits like this is insufficient. To be honest, this doesn't look like a frivolous lawsuit, even if this goes to trial and is adjudicated in your favor. Your post indicates tha…

> Your post indicates that you and your co-founder quit your jobs at Smule to start Shred. Are you insinuating that 2 employees quitting a company together and starting a company in the same "general space" is reasonable grounds for a lawsuit? > If you believe that your defense will be successful because you can prove you didn't steal code outright, you are being incredibly naive. It's not that simple. And that's to…

> Are you insinuating that 2 employees quitting a company together and starting a company in the same "general space" is reasonable grounds for a lawsuit?

If a former employer has reason to believe that the employees misappropriated intellectual property or otherwise violated the terms of their employment agreements in doing so, it has every right to seek to enforce its agreements and protect its interests.

Like it or not, when employees leave to start a company in the same general space, claims of misappropriation are more likely.

> And that's to the shame of our legal system, and to the detriment of our country's economy.

How? If a source code comparison will not be dispositive of Smule's claims against Shred's co-founders, why would a court rely on a source code comparison?

From what I can see, nobody has produced the actual filings in this case, so we don't know the exact claims, but other comments indicate that Smule isn't just claiming Shred's co-founders stole source code.

Re: When Your Former Boss Sues You for Starting a Startup

#155

Post by ww520 »

shostack wrote: post #4

Genuinely curious for your legal counsel's take on you posting such an article publicly. I've always thought the prevailing wisdom shared by all lawyers was "don't talk." Also, in this day and age of using services like Github for personal projects but having access to other repos, etc., using things like 1Password for work and personal things, how has the discovery process worked with everything? I'm really interest…

Most IP cases are settled before going to trial. Public opinion is an important factor in persuading the parties to settle or drop the case. Going public could be a valid strategy in forcing the other side's hand.

Re: When Your Former Boss Sues You for Starting a Startup

#156

Post by grizzles »

sandworm101 wrote: post #129
grizzles wrote: post #117

Earlier quoted context omitted.

sandworm101: That's a really interesting comment. It sounds very anti free market to me, but I guess I'm not surprised. I guess the only recourse for a founder led company in that situation would be to leave the US. Not necessarily a great result. OT: Regarding the Coke/Pepsi thing, personally I think food manufacturers (I use the term loosely) should be forced to disclose what's in their products. Though I would str…

Leaving the US would do little beyond increasing the cost of litigation and making said founder look more like a fugitive. Tradesecret law and IP law generally is pretty universal. And you can still get sued where the alleged theft/taking/wrong took place. A default decision (ie you don't show up) by a US court will be enforced in Canada, Europe or most anywhere else. As for free markets, while IP law does create mon…

It sounds like you agree with me then. Techniques developed for employer A CAN be taken to employer B. [as long as they are independently created ]

If there is some nuance here that I'm missing, I'd like to know what it is. A finer understanding of this point is probably really important for anyone who works in science.

Re: When Your Former Boss Sues You for Starting a Startup

#157

Post by dendory »

There are tons of cases out there of clear abuse of the legal system, where the facts are as close to black and white as you can get. This doesn't seem like it is. From an outside view, reading about employees who had access to trade secrets, even source code, leaving together to make their own product in a similar field while retaining access to said secrets (the ongoing support role) seems like a very murky case, and something that the court system is probably best to sort out.

Re: When Your Former Boss Sues You for Starting a Startup

#158

Post by ilaksh »

This comes down to what it means to be an employee and fundamental aspects of class. The reality, although difficult for most to accept, is that the current wage-based system grew directly out of the previous system which was outright slavery. The ownership/master class view employees as property. Any and all output including ideas are also viewed as the property of the owner.

And so far as possible employers attempt to extend the range of their ownership and control of their employee's and employee's ideas as far into the future and to as great a degree of scope as they can get away with.

Fundamentally these are unresolved issues our society has about class, equality, and freedom.

Re: When Your Former Boss Sues You for Starting a Startup

#159

Post by jheriko »

hga wrote: post #151
jheriko wrote: post #131

this guy needs to be careful. 1.) people reading this won't pay attention or understand the fine detail 2.) non-compete clauses etc. are there because learning on the job gives an advantage to starting up after leaving. should have researched legal precedent and played it safe imo. waited two years and set up somewhere geographically remote from the original employer... i hope this plays out well. as much as there wa…

Non-competes for the targeted employees are completely unenforceable in California, where both companies are based, from long standing statutory and case law. Many believe that law has more than a little to do with the success of Silicon Valley/the Bay area's tech concentration, which has long and far surpassed all others in the US.

that is a useful piece of information. i'll remember this in future... i'm sure it might come in handy.

Re: When Your Former Boss Sues You for Starting a Startup

#160

Post by 7Figures2Commas »

jnbiche wrote: post #146
7Figures2Commas wrote: post #75

Earlier quoted context omitted.

> In our case, we did not develop anything Shred-related (ideas or otherwise) while we were employed at Smule. So invention assignment is not at issue, because we did not moonlight on Shred Video while employed by Smule. Please recognize that assignment is likely an issue because Smule will almost certainly try to claim the opposite of what you're claiming. It doesn't mean that they will be able to prove their claims…

> If this isn't matter isn't settled, the legal process provides the means to sort it all out and you'll have the opportunity to evaluate the evidence supporting Smule's claims as part of the discovery process. If they even make it through the discovery process without going bankrupt, which is the explicit, admitted goal of their opponent.

> If they even make it through the discovery process without going bankrupt, which is the explicit, admitted goal of their opponent.

No, it isn't. According to Business Insider, this is what was stated:

I'm fairly confident we will figure something out eventually, and this won't be a long-term problem. But I think they've got to face the music here. And we're going to have to figure that out unfortunately with a bunch of lawyers.

And here's the sad truth. You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win.

Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win.

So it's not a great scenario. If you fork off a startup and there's IP overlap, it's just a big mess.

The Smule CEO doesn't at all suggest he's trying to put Shred out of business. Instead, he:

1. Seems to imply that a settlement is possible.

2. Laments the fact that this matter required legal action and that said legal action will put Shred's co-founders in a disadvantaged situation.

3. Acknowledges that this matter is the result of the fact that there seems to be some overlap between the kind of technology Smule creates and the kind of technology Shred creates.

Until Smule's claims are known in detail, it's premature to assume that Smule's action has no merit. Smule could be the good guy, or the bad guy. But lots of people here can't help but pick David over Goliath when very few meaningful facts are known.

Post reply on HN