Struggling Fitbit Inc (NYSE:FIT) is in hot waters as six of its employees have been charged for stealing trade secrets from fellow fitness device maker Jawbone.
Six current and former Fitbit employees were charged in a federal indictment Thursday in San Jose as they were allegedly in possession of trade secrets that they stole from their competitor Jawbone, according to a file from the U.S. Department of Justice.
The indictment named Katherine Mogal, 52, of San Francisco; Rong Zhang, 45, of El Cerrito; Jing Qi Weiden, 39, of San Jose; Ana Rosario, 33, of Pacifica; Patrick Narron, 41, of Boulder Creek; and Patricio Romano, 37, of Calabasas.
They reportedly violated confidentiality agreements with violating confidentiality agreements that they had previously signed as former employees of Jawbone, according to an announcement from Acting U.S. Attorney Alex G. Tse and Homeland Security Investigations Special Agent in Charge Ryan L. Spradlin.
Both companies were competitors in making wearable fitness trackers until Jawbone went out of business last year, while Fitbit has been struggling to survive in a competitive fitness device space. Each of the defendants had been working for Jawbone for at least one year between May 2011 and April 2015, during which time they signed a confidentiality agreement with the company, according to the DoJ.
“We believe the Justice Department’s indictment today of six current and former Fitbit Inc. employees for stealing trade secrets from their former employer, Jawbone, validates the claims we made in our lawsuit against Fitbit,” said Hosain Rahman, CEO of Jawbone Health.
FIT stock fell about 2.6% after the news came out.
