Rental scooter company Lime is suing rental car giant Hertz, alleging that the company has engaged in unfair business practices by poaching its workforce.
Lime filed a lawsuit in a California federal court seeking financial damages and to protect its “trade secrets.”
The suit also names two of its former employees, including now-Hertz executive Charlie Fang, accusing them of recruiting Lime employees and sharing Lime trade secrets with Hertz. Lime alleges that after Fang left Lime for Hertz, he repeatedly reached out to and recruited top engineers to the company, in violation with his written termination agreement.
The trade secrets in question are mostly regarding fleet management technology and technology for ridesharing, according to the suit. Lime is the world’s largest shared electric vehicle company, operating in 30 countries, according to its site and the text of the lawsuit.
Fang was Lime’s head of engineering before leaving in October to be Hertz’s senior vice president of product engineering.
“Immediately upon starting his new position at Hertz, Fang started posting messages to his [LinkedIn] network recruiting for engineers to join his new team at Hertz,” the suit alleges.
The second former employee named in the suit, Kai Cong, left Lime in December after being recruited by Fang, the suit alleges. Cong also went on to recruit other Lime employees via LinkedIn and other methods, according to Lime.
The suit alleges that Hertz was aware and did not discourage Fang and Cong’s actions, holding the company responsible as well.
“Fang’s improper poaching of Lime’s employees has significantly harmed Lime because it now faces staff shortages, recruiting costs, and critical project delays that it would not have had to face absent Fang’s violations of his non-solicitation agreements and Hertz’s turning a blind eye to those violations,” the suit says.
Hertz has argued that the non-solicitation clauses in Fang and Cong’s contracts are non-enforceable.
Cong is also accused of downloading and distributing trade secrets to Hertz in the days before his departure from Lime, according to the suit.
Hertz entered bankruptcy in 2020, shortly after the beginning of the pandemic, but the company recovered a year later following a massive injection from new investors.
“Hertz vehemently disagrees with the claims made in the lawsuit. As this is active litigation, we have no further comment at this time,” a spokesperson for the rental car company told The Hill.
Updated 1:34 p.m.