Bodacious Secret No. 4: Hire Employees The Right Way 🔥

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A few months back, I hosted a group of Science and Technology startup founders at a Founder’s Happy Hour. As we drank our craft beer and knocked back wine coolers, we discussed the trials and tribulations of running a young company. We swapped war stories and discussed secrets for building the best teams. Some of the founders even bragged about hiring away employees into top leadership roles from their largest, and closest competitors.

Smart founders know you can’t build a company alone, not a strong one anyway. It takes a solid network and a talent pipeline to bring innovative products and services to users. But without carefully considering how you go about building that pipeline, you could put the future of your company at risk.

Don’t Be Fooled

For example, I’ve found myself at a number of pitches where an entrepreneur shares a slide that boasts how the entrepreneur hired the CMO or CTO “from our #1 competitor.” While on the one hand, I know why an entrepreneur would want to do this- instant credibility and a showing of a ‘strong’ leadership team. But, if not careful, what seems like a strength, could become your worst nightmare.

“The big takeaway here is avoid hires where a credible trade secret claim could be made.”

Ask The Right Questions

When the potential employee comes from a competitor, ask whether s/he is bound by a non-compete. You should also ask whether the potential employee worked on exactly the same technology solving the same problem for which you’re hiring. Ask, in a casual way, if the potential employee managed to take any documents or files with them that could help you. If the answer to any of these questions is ‘Yes’ reconsider this hire. Don’t think this is a risk, then just look at the pounding Uber took in the Waymo v. Uber litigation. Uber agreed to pay Waymo approximately $245 million in equity to settle trade secret misappropriation claims when a former Waymo employee was hired by Uber to develop self-driving cars using the approximately 14,000 files he took with him when he left. The big takeaway here is avoid hires where a credible trade secret claim could be made.

Bottom Line

In the end, there are no real shortcuts to success. The law can punish you if you think otherwise. If you hire employees and give serious thought to avoiding potential trade secret risk, your startup just might beat the odds and succeed.


About this Series

Bodacious a legal information series related to intellectual property and technology law issues, such as patents, trademarks, copyrights, privacy, and business formation for science and technology startups. The information in this post focuses on the 9 Legal Secrets Every Entrepreneur Should Know To Have A More Bodacious Business.

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Angela Grayson, CIPP/US, CLP  is an author, speaker, and lawyer. She is the Principal and Founder of Precipice IP, PLLC.  Angela is a patent, trademark, copyright, and technology law attorney with almost 20 years of experience helping science and technology companies protect products, brands, designs, and data from idea to launch.

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