Palantir is now suing a rival CEO and its own ex-employees over employee poaching and the misuse of its own trade secrets. The company has accused Percepta CEO and co-founder Hirsh Jain, co-founder Radha Jain, and an employee, Joanna Cohen, of violating non-solicitation agreements to steal its talent, hiring from its ranks in a highly competitive industry. Poaching employees is not uncommon in today’s world, particularly within the space of tech and AI. Businesses not only get employees who are experts in their industry but also those who have insider access to their top competitors, making it a fruitful investment on multiple fronts.
The Palantir-Percepta legal case is another example of just how competitive the AI space has become, and the outcome of the case could set an important precedent for the industry.
Palantir is suing its ex-employees and the rival CEO of Percepta over a “coordinated plan” to steal its trade secrets and top talent. (Image: Freepik)
Palantir Sues Its Ex-Employees and Rival CEO over “Poaching” Allegations
Palantir initially accused two former executives, Radha Jain and Joanna Cohen, of stealing confidential information from the business before quitting and moving to the rival firm Percepta. The company then added Percepta co-founder and CEO Hirsh Jain, who was also a former employee, to the lawsuit. He accused the “copycat” startup of trying to poach employees in violation of their nonsolicitation agreements, alleging he was “inexorably intertwined” with their highly illegal behavior.
Radha Jain was reportedly part of the team building Palantir’s flagship software, and Joanna Cohen was an engineer who worked with some of the company’s biggest customers. Hirsh Jain also worked with Palantir, organizing the company’s health care portfolio. All three worked very intrinsically with Palantir technology, giving us a clear look at why the company took the alleged violations so seriously.
Palantir is a looming giant in the AI space, not discussed as often as companies like Google and OpenAI, but one that has advanced into many new spaces with AI technology. Controversial on the best of days, the company has carved out a niche for itself within the industry, leading from behind the scenes. Not just attempting to revolutionize the AI and military space, but the field of training and education as well, Palantir is no stranger to being aggressive in its approach, and the legal action against its rival is a prime example of that.
What Does Palantir’s Legal Action Against Its Rival Allege?
Palantir has accused three individuals of stealing its AI trade secrets and poaching its talent. Palantir’s legal action against its rival involves allegations that the two former employees stole its “crown jewels,” which included its source code. The company then added the Percepta CEO to the lawsuit, indicating that after he left Palantir in August 2024, he “began an aggressive campaign to recruit numerous Palantir employees to leave Palantir and join Percepta.”
According to Palantir’s ex-engineers’ suit, the three accused “brazenly disregarded their contractual and legal commitments to Palantir and instead chose a path of deception and unjust competition.” The company accused them of conducting a months-long charade during their time at the company, lying about their plans before quitting. The company showed evidence of texts between the accused that discussed the poaching. The Palantir lawsuit is one of protecting trade secrets, upholding non-solicitation and non-competition agreements, and preventing further poaching from taking place.
What’s Next for the Palantir-Percepta Legal Case?
General Catalyst, the owner of Percepta, has denied the allegations, calling them “baseless.” The company also added that “Percepta has never used any confidential Palantir information, and there’s zero evidence suggesting otherwise. Palantir is cherry-picking out-of-context soundbites for PR effect.”
The employees accused in the case have also rejected the allegation, with Percepta stating that its business is “fundamentally different” from Palatir’s. “Palantir does not own the AI transformation space, which is massive and constantly evolving,” it added. As Palantir sues its ex-employees and takes the case further, we should learn more about how the tides turn in favor of, or against, poaching in the tech space.
Earlier this year, Palantir also filed a trade secret lawsuit against Guardian AI, a Y Combinator startup established by two of its former employees. The case is ongoing and showcases just how competitive Palantir aims to be in the AI industry.
Can Employers Restrict What Former Employees Do?
As standard practices, employers are free to lure employees away from competitors or corral ex-colleagues into their own ventures. That is, unless they have signed contracts as an understanding that they will not do so. Many major organizations require employees to sign various forms of contracts before their employment, which are binding but harder to enforce in practice.
Non-compete contracts prevent employees from joining a competitor or starting their own business in the same industry for a specified period to ensure they cannot use their insider knowledge to build a rival business. Attempts have been made to ban non-compete agreements in the US, but they have not been successful, barring a few states.
Non-solicitation contracts restrict employees from taking employees and customers away from the business after they depart from the company. Non-disclosure agreements prevent current and former employees from revealing any information with regard to the business to any external sources. These agreements are used by employers to varying degrees to discourage employees from turning against the business or revealing any sensitive information. Without such contracts in place, it can be much harder to take legal action against alleged violations.
Is Poaching Employees Legally Allowed in the US?
Meta was similarly accused of attempting to poach employees from companies like Apple and OpenAI to build up the team behind its Superintelligence lab. Some of its attempts failed while others were successful, but the attempt was considered an underhanded move by many. Still, unless employees are bound by contractual agreements that prevent them from jumping ship, most are free to follow the money trail to the opportunities that serve them best.
No-poach agreements between employers are illegal in the US under antitrust laws, which means that employers cannot legally stop other businesses from poaching their workers. They can, however, accuse former employees of violating contracts or leaking sensitive information. Can Palantir win in its attempt to protect its AI trade secrets, or will this be seen as an attempt at discouraging competition? It’s now up to the company to prove and the courts to decide.
What do you think about Palantir suing its ex-employees and the allegations made in this case? Share your thoughts with us in the comments. Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.