Scooter startup Lime sues Hertz for poaching engineers

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(C) Reuters. FILE PHOTO: A woman walks past electric Lime scooters parked on the sidewalk in downtown Los Angeles, California, U.S., October 16, 2019. REUTERS/Mike Blake/File Photo
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By Mike Scarcella

(Reuters) – Urban scooter company Lime sued Hertz Corp on Thursday alleging unfair competition and accusing the rental car giant of improperly hiring the startup’s senior engineers.

San Francisco-based Neutron Holdings Inc, which does business as Lime, filed the lawsuit in California federal court seeking unspecified monetary damages and an injunction “to recover and protect its trade secrets.”

It also named Charlie Fang, who previously was Lime’s head of engineering, and another engineer as defendants. Lime claimed that Fang, who joined Hertz last year as a senior vice president, violated his employment agreement to not solicit former colleagues after leaving the company.

Hertz said in a statement it “vehemently disagrees with the claims made in the lawsuit.” Fang did not immediately respond to a message seeking comment.

The loss of engineers has “significantly harmed” Lime, which provides short-term e-bike and scooter rentals in about 30 countries. The company said in the lawsuit it now faces “staff shortages, recruiting costs, and critical project delays.”

Hertz sought to “capitalize” on Fang and his team’s knowledge of building “back-end infrastructure for ride-sharing and consumer facing apps so that it could gain a competitive advantage over other companies,” according to the complaint.

Hertz Corp, which operates the Hertz, Dollar and Thrifty vehicle rental brands, is a subsidiary of Hertz Global Holdings (OTC:HTZGQ) Inc.

Lime’s former head of supply engineering, Kai Cong, was also named a defendant. Cong, now at Hertz, did not immediately respond on Friday to a message seeking comment.

The lawsuit claimed Cong improperly downloaded confidential Lime files before his departure in December.

A representative from Lime did not immediately respond to a message seeking comment.

Hertz has disputed that the non-solicitation agreements at issue in the case are enforceable, the lawsuit said.

The case is Neutron Holdings Inc v Hertz Corp et al, U.S. District Court, Northern District of California, No. 3:23-cv-00934.

For plaintiff: Melvin Felton and Stephanie Jones-Nojima of Sanders Roberts

For defendants: No appearance yet

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(Edited by Leigh Jones and Josie Kao)