[HN Gopher] Strapped startup declines acquihire, Apple poaches k...
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Strapped startup declines acquihire, Apple poaches key engineers;
NP, says court [pdf]
Author : dctoedt
Score : 26 points
Date : 2020-10-04 21:47 UTC (1 hours ago)
(HTM) web link (cases.justia.com)
(TXT) w3m dump (cases.justia.com)
| MattGaiser wrote:
| The idea that a company felt entitled to sell its engineers is
| preposterous.
| Lammy wrote:
| "human resources"
| DebtDeflation wrote:
| Yep. Sounds like a very small startup that didn't give much
| equity to the few employees it had, and the CEO/founder had an
| overinflated sense of the company's value.
| hbosch wrote:
| Two things, really: if you turn down an acquisition that you feel
| your employees supported, you don't get to do the "surprised
| pikachu face" when you turn it down and they go work there
| anyway. Secondly, it's presented as if these engineers
| exfiltrated special knowledge with them... isn't it fair to also
| give them the benefit of the doubt in that the same employees may
| have crucially developed the software themselves before leaving?
|
| In either case I can't see how this simply doesn't point at
| mismanagement by Hooked. From any angle, they created an
| environment that made these guys think "my time will be better
| spent at Apple".
| djur wrote:
| > The CEO settled on a new plan: Hooked would "sell" three
| engineers to Apple... Hooked's CEO pitched the idea to Apple,
| providing background information about the engineers and sending
| their resumes. Apple responded that it might consider paying a
| "finder's fee"...
|
| Even if was inclined to take Hooked's side on this, it was a huge
| mistake to send information about those engineers without an
| existing agreement.
|
| (Also: I wonder if the CEO intended to split that "finder's fee"
| with the employees she was trying to "sell".)
| newbie578 wrote:
| I have to admit, while I cannot stand Apple and I am constantly
| opposed to them and I consider them personally a net negative in
| today's world, in this particular situation it seems they are not
| the "rotten" party, or would it be better to say that they are
| the "lesser evil".
|
| Reading through the document I am honestly shocked at the
| behaviour of the CEO, I mean come on how entitled do you have to
| be to try and think you have a right to sell employees of your
| choosing to Apple for a handsome fee, like they are your cattle..
| draw_down wrote:
| Man, I hate it when a mean old big company comes along and offers
| me more money to do my job than what I currently make.
| Animats wrote:
| _" That evidence does suggest the engineers drew on knowledge and
| skills they gained from Hooked to develop a product for their new
| employer--but California's policy favoring free mobility for
| employees specifically allows that. (See Whyte v. Schlage Lock
| Co. (2002) 101Cal.App.4th 1443, 1464 [rejecting the "inevitable
| disclosure" doctrine, under which a claim for trade secret
| misappropriation is stated if an employee's new job will
| inevitably lead to reliance on the former employer's trade
| secrets].)"_
|
| Which is why Silicon Valley is in California, and why attempts to
| create a startup culture elsewhere have mostly failed.
| emteycz wrote:
| I don't understand why there is no Silicon Valley in Europe
| then
| redis_mlc wrote:
| The reasons are:
|
| 1) The California employee rights
|
| 2) European nations often have onerous pension requirements
| that must be met even before hiring a new employee.
|
| 3) Silicon Valley has willing investors.
|
| 4) Governments across the world prefer dealing with large
| entities because of the overhead in dealing with multiple
| companies, so without the right startup culture, new
| companies just won't happen.
| boulos wrote:
| There are lots of theories.
|
| One of the main ones is that national policies around
| employee equity vary throughout Europe and are often severely
| disadvantageous (particularly Spain and Germany). Lots of
| European entrepreneurs are calling on policy makers to both
| normalize this within the EU, as well as making the policies
| competitive (e.g., [1]).
|
| Of course that statement misses some of the "why not < state
| in the US >". The tax treatment in other states is the same,
| and several have similarly employee friendly policies. If
| anything, Seattle has become a clear rival to San Francisco,
| and has restrictive employee policies with regards to non
| competes (c.f., Microsoft used to sue high profile transfers
| to Google, Amazon sues ~everyone who leaves AWS, etc.).
|
| _I_ think the combo of those things suggest that it comes
| down to density _and_ freedom of movement. Silicon Valley
| leapfrogged other places thanks to Shockley = > various forks
| => Intel, Apple and others offering serious equity (the
| Boston scene didn't keep up on this front). That fed on
| itself over and over again, leading to persistence. Seattle
| is now a powerhouse as a legacy of Microsoft and then Amazon,
| and all the folks that have come out of it.
|
| By contrast, Europe has only had a broad single market for
| ~30 years. But it's still super fragmented both in terms of
| laws and some would argue more importantly by language. 45
| years ago when Apple and Microsoft were founded, they were
| able to hire any engineer in the US (and beyond) that spoke
| English. By contrast, most European companies were highly
| national with fairly minimal migration between countries.
|
| Europe is closer now to the conditions of the initial Silicon
| Valley setup (freedom of movement, access to knowledge,
| everyone speaks a common language), but its decades behind in
| terms of a history of successes. I believe that the companies
| spawned from Spotify employees, and so on will spread
| throughout the European startup scene. But it still takes
| time.
|
| tl;dr: Europe still has some structural barriers, and just a
| much "younger" startup scene.
|
| [1] https://notoptional.eu/en/policymakers
| [deleted]
| bitL wrote:
| Aversion to risk. I was told by German entrepreneurs that
| they can get funding only when they give bank/VC/investor a
| collateral of the same value or if they are already
| profitable and don't need it anymore.
| garmaine wrote:
| Also German law doesn't make easy allowances for employee
| ownership / stock options. There's a hack to get around
| this where you write a contract for a percentage of the
| eventual exit, but this limits what sort of exits are
| possible.
|
| European laws, regulations, and investor culture are all
| setup in ways that hurt startups.
| jariel wrote:
| It's funny as workers get caught up in notions of 'individual
| freedom', which they see as a benefit, but don't realize that
| systematically what this favours is simply power.
|
| A company with 100x the resources of another, never needs to
| worry about IP or innovating, because it just plucks off other
| people's work, integrates into it's own machine and receives
| the market surpluses, risk free.
|
| So yes - by getting tons of young people to drink the koolaid
| 'work hard for startups' knowing the surpluses, if any, will
| largely be concentrated in the hands of literally 5-10
| behemoths, the Valley has played a neat trick.
|
| IP rules favour the little guy: it's how they can keep their
| innovation by being taken from much larger companies. IP filed
| by large corps is often protective in nature, so as to protect
| themselves from trolls and obvious copy-cats.
| redis_mlc wrote:
| You're confusing, perhaps deliberately, employee mobility
| rights in California with company IP.
|
| Thus your post makes no sense, in the English language at
| least.
| centimeter wrote:
| > IP rules favour the little guy
|
| This is one of the most absurd and backwards claims I've seen
| on this site. Large companies are members of patent pools
| that prevent them from being sued by other members, whereas
| small companies without a large IP portfolio can't do
| anything without inadvertently violating someone's patent.
| jariel wrote:
| You're raising a secondary IP issue to a concern much
| larger than it actually is, causing you to misinterpret the
| situation.
|
| IP is one of the very few areas wherein smaller companies
| can have any hope of leverage over larger ones.
|
| That small companies are blocked from some other patents is
| an issue, but a lesser one - and it applies to big and
| small alike.
|
| "whereas small companies without a large IP portfolio can't
| do anything without inadvertently violating someone's
| patent." - is plainly false.
|
| Obviously, companies continue to innovate.
|
| Large companies have much more to protect, and far from
| 'being safe' - IP laws make them more risk averse if
| anything because they put a lot more at risk than smaller
| one's.
|
| Google has outright banned their employees from even
| downloading MongoDB etc. due to lack of clarity over
| licensing. Without IP protections, Google wouldn't care one
| bit what they did.
|
| Large companies play against each other mostly in the
| domain of competition, without IP laws they would step on
| every smaller company like little ants, without any
| concern.
| agency wrote:
| So it would be better for these employees if they were barred
| from going to work for Apple?
| konjin wrote:
| That sounds like something someone who has never been taken
| to court over IP rights would say. I have, and it cost us
| $10k to get told "you're screwed." by the lawyer that was
| suggested by friends as one of the better ones for startups.
| jariel wrote:
| Without IP laws, you would be even more screwed. By virtue
| of your existence, you would be there as little fish
| literally to be eaten by larger one's.
|
| For every time a large company trolls a smaller one, there
| are 100 times one company decides not to infringe on some
| other work.
|
| For example, I work with a hardware company that has
| patents. We freely send our products to larger competitors.
| Why? Because they know we have good IP, and were they to
| copy our approach, it would be a straightforward
| infringement on us, and it would risk their entire
| business.
|
| Admittedly, we are luckily that infringement in this case
| would be fairly clear because that's not always the case.
| shalmanese wrote:
| > A company with 100x the resources of another, never needs
| to worry about IP or innovating, because it just plucks off
| other people's work, integrates into it's own machine and
| receives the market surpluses, risk free.
|
| Which is why we're all typing this on DEC machines running
| OS/2 on AOL internet with 3Com modems.
| tallgiraffe wrote:
| Sounds like a few engineers found out that Apple was looking into
| their company and knowing Apple was interested they took a new
| gig, meanwhile the CEO got upset and decided to fire the last
| remaining defecting engineer, who out of goodness of heart
| actually declined Apple, but gratefully took the offer once he
| got fired. Although it probably hurts to have your team poached,
| it sounds like potentially it wasn't a great working environment
| to begin with as the team was happy to jump ship at the first
| notice.
| batmaniam wrote:
| We should rid of the term 'poaching'. There's no such thing.
| We're not animals, we are free to accept a better offer it
| comes along. The CEO should have counter offered with something
| more substantial, but he couldn't so the engineers went to
| greener pastures.
| blhack wrote:
| >but he couldn't so the engineers went to greener pastures.
|
| She.
| AmericanChopper wrote:
| To me it sounds like the CEO and the investors neither
| understood what was valuable about their company, nor who was
| creating that value. A completely self-inflicted wound from
| Hooked, with everybody who actually understood the situation
| ending up better off.
|
| I can't imagine why you'd ever feel bad for a company that
| fails to retain its staff. Employees finding better jobs in
| other companies is one of the best market outcomes you could
| want.
| seieste wrote:
| D.C., could you explain what part of this judgment you disagree
| with? Employees should have the right to switch companies and
| leaving a company shouldn't bar employment in your field.
|
| Hooked is relying on misrepresentation and vague notions of trade
| secretes -- If there were actual concrete IP theft (or even
| something like customer lists or proprietary technology) wouldn't
| their lawsuit have focused on that?
| macintux wrote:
| Reading through it, there were some trade secret complaints: an
| engineer who re-created his project for Apple in a very short
| period of time, company documents that were kept and referenced
| by their former employees.
|
| (I'm in no way taking Hooked's side here, but there were a few
| things that I can see them being validly upset about.)
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(page generated 2020-10-04 23:00 UTC)