I've heard about a few instances of the past year of startup founders treating their employees really badly... from lying about work hour expectations, to the details of the day to day job in order to get someone to sign on the dotted line. Even firing people, without cause, within days of them starting.
"We really appreciate your strong backend skills (especially being as we're still trying to figure out like, namespaces and stuff). But we just found this frontend guy who's really hawt! And we can't afford him unless we fire you."
"It's not a culture fit."
"It's just not working out."
etc.
But to the friend of mine this happened to (at the hands of a 25 year-old first-time "founder"), it was anything but.
And when they gave their "explanation", it was pure deadpan -- without the slightest trace of irony or humility.