News: Ex-Magic Leap Employee Files Lawsuit Alleging Shady Hiring Practices

Ex-Magic Leap Employee Files Lawsuit Alleging Shady Hiring Practices

The legal travails of Magic Leap appear to have no end in sight, as a lawsuit filed by an ex-employee further threatens to dampen the startup's 2018 launch.

A new legal complaint has been filed by former Magic Leap worker Kimberly Couto that alleges the company employed hundreds of workers as independent contractors to avoid paying the proper taxes on roughly $36 million in employee pay, according to a report from Bloomberg.

The report also claims that Couto's legal filing accuses Magic Leap of poaching workers from other companies and hiring them as contractors to avoid non-compete agreements.

Another part of the report describes what Couto says happened when she complained to Magic Leap's management and attorney's about the employment practices — she was fired the next day.

Couto's attorney would offer comment on the case in the report. Magic Leap has responded to the legal complaint, and a spokesperson for the company told Next Reality:

We are confident the complaint is entirely without merit and will vigorously defend the Company against these baseless claims. We believe the lawsuit, which is one of many filed by the same Florida-based law firm, is part of an ongoing effort to exploit Magic Leap's high profile stature and financial resources through blatant abuse of process.

This latest legal clash is just the latest in what is becoming a very long list of cases involving Magic Leap. The legal tussles at the startup have involved everything from HR issues related to gender, to internal conflicts among high-level executives, to a recent police report filed by Magic Leap itself against another worker regarding seemingly unrelated hiring practices.

In the history of startups, especially one as well funded as Magic Leap (over $2.3 billion raised so far), legal fights are common. But the frequency and nature of some of the legal issues surrounding Magic Leap are unusual for such a young company.

Fighting market competitors, developing a brand new platform, and convincing users to embrace a completely new computing paradigm is hard enough. Magic Leap's mounting legal concerns won't make fighting those revenue-related battles any easier.

Story updated Friday, March 16, 9:15 a.m. ET, with a response from Magic Leap.

Cover image via Magic Leap/Twitter

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