Tesla just sued Rivian

Chris Davies - Jul 23, 2020, 2:00 pm CDT
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Tesla just sued Rivian

Tesla has sued EV startup Rivian, accusing it of poaching employees and asking them to bring confidential information with them, a charge the Amazon-backed automaker denies. While Tesla acknowledges that it’s commonplace for people in the industry to move between car companies – and indeed has swelled its own ranks with talent lured over from other automakers – it alleges that Rivian encouraged new hires to bring trade secrets along with them too.

Rivian is yet to begin production of its first models, the R1T pickup truck and the R1S three-row SUV. It will also build delivery trucks for Amazon – which has taken part in several funding rounds for Rivian, along with Ford and others – using the same so-called skateboard architecture it has developed.

Tesla’s lawsuit, though, threatens the smooth-sailing of that roadmap. In it, Elon Musk’s company claims that Rivian has hired 178 former Tesla employees so far. 70 of that number moved directly from Tesla to Rivian, according to the filed suit.

The case names Rivian and four former Tesla employees, Bloomberg reports; Electrek has released the full lawsuit. That, though, isn’t the extent of the activity, Tesla suggests.

Of the four former employees, Tesla says that two admitted that they had indeed taken “confidential and proprietary documents” when pressed by the automaker’s investigators. The documents in question weren’t around Tesla technology, which it uses for the design of its EVs, but allegedly concerning staffing instead. One former employee is said to have taken lists of prospective candidates Tesla was considering, along with details around its hiring process.

As Tesla tells it, Rivian was not only aware of the activity, it encouraged it. One hiring manager at the startup is said to have brought up Rivian’s absence of “recruiting templates, structures, formulas, or documents” that it needed to build its workforce to someone who, at the time, was working as a Tesla staff recruiter. That person then sent copies of Tesla recruiting documents to her personal Gmail account, including salary details, the lawsuit suggests, before joining Rivian.

Rivian, in a statement, has denied the allegations. “We admire Tesla for its leadership in resetting expectations of what an electric car can be,” a spokesperson said. “Rivian is made up of high-performing, mission-driven teams, and our business model and technology are based on many years of engineering, design, and strategy development. This requires the contribution and know-how of thousands of employees from across the technology and automotive spaces. Upon joining Rivian, we require all employees to confirm that they have not, and will not, introduce former employers’ intellectual property into Rivian systems. This suit’s allegations are baseless and run counter to Rivian’s culture, ethos and corporate policies.”

Tesla claims that it used “sophisticated electronic security monitoring tools” to track the allegedly stolen documents. According to the lawsuit, the automaker was frustrated by the “cavalier attitude” that Rivian’s associate general counsel took, when challenged with the findings.

Unsurprisingly, Rivian disputes that. “In good faith, we discussed with Tesla the seriousness with which we take any allegation,” a spokesperson told The Verge. “This document misrepresents a conversation between counsel.”

It’s a sour note for Rivian, which had been enjoying a wave of positive news culminating in a further $2.5 billion funding round earlier this month. That saw existing investors like Amazon and BlackRock raise their stakes, along with new participants joining. In total, Rivian has raised over $5 billion, though it blamed the coronavirus pandemic for being forced to push back production starting on the R1T and R1S from late 2020 to early in the new year.


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