Popcorn-worthy stuff this week as Jawbone has filed suit in a California State Court claiming that Fitbit not only poached Jawbone employees — no foul there — but that those employees stole corporate secrets including market research and future product designs. That would be the foul part.
The New York Times report says that Fitbit had tried to recruit about one-third of Jawbone’s staff, with many of those deciding to leave for jobs at Fitbit. The suit names specific employees who have either since admitted to stealing files and documents before leaving Jawbone. The suit alleges that those employees saved files to flash drives, then altered system logs to hide their activities. There’s also a bit about how an “unnamed executive search consultant…reportedly said, ‘Fitbit’s objective is to decimate Jawbone.'” I’m sure that one will raise a few heart rates on both sides.
Like any good corporate spat, Jawbone is on point with the timing — Fitbit has filed for its IPO, which is scheduled to hit the market later this year. Regardless of what transpires in the courtroom, it’s going to be unpleasant for Fitbit to deal with while they try to convince would-be investors to get on board, something I’m sure Jawbone execs just feel terrible about. Speaking of Jawbone, despite announcing a spate of new devices at the end of last year and the beginning of this one, the longtime wearable specialist is not doing so great in the money department, forced to take a $300 million loan — not an investment — in February. That and release delays for those new devices have put Jawbone in a difficult position. Suing their foremost rivals won’t help fix what’s fundamentally wrong, but it sure won’t hurt and it sounds an awful lot like they have cause.
Stay tuned, and let’s hope we’ll all get to track stats like employees subpoenaed, compensation demanded, personal emails obtained, and more!