Many startups fear that a former employee, partner or client will somehow steal their trade secrets and use them to make a buck. Another common fear is that a former employee will poach talent from the startup to move to a different company. For the electric-car startup Faraday Future, both of these fears have apparently been realized.
The car company is suing two of its former executives for stealing trade secrets and hiring away employees. The lawsuit claims that Stefan Krause, the company’s former chief financial officer, and Ulrich Kranz, its former chief technology officer, solicited 20 employees to their own startup. It also claims that the ex-officers stole intellectual property that belonged to Faraday Future to use for their own startup, Evelozcity, Inc.
Krause and Kranz have both denied the allegations, accusing their former employer of making false and inflammatory claims against them. They insisted that Evelozcity had no need of Faraday Future’s intellectual property.
This is hardly the first time that Faraday Future has experienced controversy. The startup has been bogged down with many of the issues that startups face: Hefty bills, difficulty raising funds, a competitive market and troubled leadership. Many entrepreneurs may see may see these struggles and feel a pang of recognition. After all, startups are bound to face challenges–if not in the form of poaching and intellectual property debates, then in financial struggles or internal complications.
Ultimately, startups face myriad difficulties that may require legal assistance or even litigation. Entrepreneurs who are concerned about former employees soliciting talent may wish to incorporate non-solicitation agreements into their employment contracts. To protect trade secrets and other intellectual property, startups may need seek patents for their ideas and have colleagues sign non-disclosure agreements.