Tesla takes aim at Rivian in lawsuit alleging trade secret theft, poaching talent

 In Amazon, Automotive, lawsuit, Rivian, RJ Scaringe, TC, Tesla, trade secrets

Tesla filed a lawsuit against electric vehicle automaker Rivian and four former employers, on allegations of poaching talent and stealing trade secrets.

Bloomberg was the first to report the lawsuit filed in California Superior Court in Santa Clara.

Tesla alleges in the lawsuit that Rivian recruits Tesla employees and encourages them to take proprietary information as they leave. Tesla claims in the lawsuit that it has discovered an “alarming pattern” among employees who have recently left to join Rivian.

“As Tesla now knows, Rivian instructed one recently departing Tesla employee about the types of Tesla confidential information that Rivian needs. Both Rivan and the employee knew full well that taking such information would violate the employee’s non-disclosure obligation to Tesla. Nonetheless, the employee expropriated for Rivian the exact information Rivian sought — highly sensitive, trade secret information that would give Rivian a huge competitive advantage,” the complaint reads.

Tesla named four former employees in the lawsuit, but added its investigation continues. The company claims it has since identified two more former workers who have gone on to work at Rivian and alleges they “likely misappropriated Tesla trade secret, confidential or proprietary information.”

The trade secrets identified in the complaint include recruiting practices and other documents related to finding and hiring talent such as salary rates and candidate lists. Other allegedly stolen documents related to manufacturing project management information.

Tesla claims that Rivian has hired 178 former employees. About 70 of those employees joined the startup directly from Tesla.

In response, Rivian issued a statement to TechCrunch that calls the allegations baseless:

We admire Tesla for its leadership in resetting expectations of what an electric car can be. 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.

Rivian has become the latest company to be sued by Tesla over allegations of stealing trade secrets. Some of these cases, such as its 2017 lawsuit against AV startup Aurora, have been withdrawn altogether or ended in agreements. Others, like its lawsuit filed against Xpeng Motors, have persisted. A lawsuit filed against Zoox was settled in April 2020.

Rivian has been ramping up its operations over the past 18 months, including hiring hundreds of people. While the company has existed for about 10 years, it operated quietly in the background until late 2018, when its founder and CEO, RJ Scaringe, unveiled two vehicles at the LA Auto Show.

Since then, Rivian has become the next EV darling. The company, which recently raised $2.5 billion in new funding, is aiming to become the first to bring an EV pickup truck to market.

Rivian has some high-profile backers, including Amazon, Ford and funds and accounts advised by T. Rowe Price Associates Inc. Amazon is also a customer and has ordered 100,000 electric vans from Rivian.

The automaker is preparing its factory in Normal, Illinois to assemble its R1T electric pickup truck and the R1S SUV, as well as begin to fulfill its order with Amazon to deliver electric vans. All three of these products are expected to come to market — or directly to Amazon, for the van order — in 2021.

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