When the Code Leaves with the Employees: How to Protect Your IT Business Before It’s Too Late

The founder, former CEO and lead developer of the Kazakh logistics platform Relog are currently publicly disputing who owns the product, clients and code. The conflict has attracted widespread attention, but for the IT industry, such situations are typical.

Similar cases are not uncommon abroad either. In 2025, Flexport filed a lawsuit against former employees who had created a competitor, Freightmate AI, before leaving the company and had downloaded code and client lists. In 2026, Apple filed a lawsuit against OpenAI, alleging that senior executives had taken developments to a startup that was later acquired by OpenAI for $6.5 billion.

Kamal Terekhov and Gleb Shumilov, lawyers in REVERA’s Arbitration and IT Disputes Practice with extensive experience handling similar cases, explain in greater detail how to protect an IT business from internal conflicts.

The problem areas are usually the same: management and senior developers. A specialist with full access to the infrastructure can disconnect a company from its own product. A non-technical manager can take the code and team and launch a parallel business with another partner. Other risks include selling data to competitors and poaching key employees.

What can be done?

By default, rights to a product belong to the person who created it, not the person who paid for it. Therefore, without an IP assignment, the author can make claims to the product at any time, and formally, the law will be on their side. An NDA protects the client database, contractual terms and technical architecture, but only if the scope of confidential information is clearly defined. A notable example is Waymo v. Uber: before leaving Google, an engineer downloaded more than 14,000 files containing lidar sensor designs and founded a startup that was later acquired by Uber for $680 million. The outcome was a $245 million settlement in shares and criminal proceedings.

When the documents are properly drafted, protection can work quickly. In September 2025, Elon Musk’s xAI obtained a court injunction against a former engineer who had accepted an offer from OpenAI: within days, the court prohibited him from working with generative AI for his new employer and ordered him to surrender his devices for examination. This was possible precisely because xAI had properly drafted confidentiality agreements in place.

Key measures

1. IP. As soon as you realize that the project is growing, register a company and formalize intellectual property agreements: an IP assignment, a work assignment, and an act of transfer of rights. Do not postpone this for years, because obtaining rights retroactively from a developer who has already gained a strong negotiating position is much more difficult and expensive.
2. NCA, NDA. These instruments work effectively with B2B counterparties. There are nuances when it comes to employees, depending on the jurisdiction; in some countries, restrictions on employees’ competitive activities simply do not apply. Therefore, in addition to having the right documents in place, it is important to know your team well, maintain direct contact with key people, and understand their motivations.
3. Corporate measures. Introduce restrictions and mandatory approval of key actions by the director, including major transactions, asset withdrawals, and the hiring and dismissal of top managers. Do not allow an unchecked connection between a hired director and the accountant; financial flows should be transparent to the owners.
4. Technical measures. Distribute access to infrastructure, code and databases among several people, register them in the company’s name rather than that of a specific employee, and revoke access promptly when an employee leaves. A situation where all access is concentrated in the hands of one person is itself an immediate risk.

All these measures address the same objective from different angles: making the company independent of the goodwill of any particular individual and moving relationships between founders, employees and partners from the realm of verbal agreements into the realm of rights that can be protected in court.

Putting these mechanisms in place at the outset takes a lawyer only a few days of work, whereas a conflict caused by their absence can drag on for years of litigation and cost amounts that are incomparable to the initial investment.

Kamal Terekhov and Stanislav Tarmola,
REVERA Law Group lawyers