Electric car manufacturer Tesla has reported that it has uncovered a “disturbing pattern” of previous employees who had taken confidential information such as certain trade secrets when they left Tesla and after that they joined at EV startup Rivian. Bloomberg first reported this incident when Tesla filed a lawsuit against Rivian for their actions. Tesla went on to claim that Rivian is “knowing encouraging” such actions and the company is demanding an unspecified amount from Rivian as damages, intellectual property theft is a serious crime. Tesla has alleged that the offense committed by Rivian as “despicable, wanton, oppressive, willful, malicious and duplicitous”. Rivian has retorted by calling these allegations as “baseless”.
Tesla sues Rivian for Allegedly Stealing Secrets, Poaching Employees
Tesla v/s Rivian
Rivian is an EV manufacturing company that is building a premium electric pickup truck, much like, you guessed it, the Cybertruck from Tesla. Rivian is planning to launch their pickup in early 2021, ahead of the Cybertruck’s launch. The company has managed to raise more than $5 billion in one and a half years, this means that Rivian has the potential and the bankroll to be a major player in the market and is not some upstart startup that thinks it knows better. Besides the pickup truck, the company is also planning to sell an electric SUV at the same time. It has been reported that Rivian has hired almost 2,400 employees ahead of its debut launch from the premier companies across the automotive and tech industries, this includes 178 workers, who were previously employed by Tesla, as per the lawsuit from the 178 employees 70 workers directly switched from Tesla to Rivian.
In the lawsuit which was filed last week, the defendants are four former Tesla employees and Rivian Automotive Inc., however, Tesla has stated that they have discovered a few more people who may have stolen information and supplied them to Rivian. Post these events, a Rivian spokesperson said, “We admire Tesla for its leadership in restting expectations of what an electric car can be” he further added quite boldly that “Upon joining Rivian, we require all employees to confirm that they have not, and will not, introduce former employees’ intellectual property into Rivian systems. This suit’s allegations are baseless and run counter to Rivian’s culture, ethos, and corporate policies.”
Investigation on the Defendants
Two of the defendants named in the lawsuit has admitted to procuring confidential information, according to Tesla. The first person is Tami Pascale, who was a senior manager in Tesla’s staffing department. Tesla claims that she has taken at least ten confidential and proprietary documents, furthermore, she did not agree to delete the files she possessed and Tesla claims that she still has her work laptop. Tesla says she shared the screen of her phone with one of the investigators hired by the company and the investigator reported she has “numerous files” on her phone that had the company’s name; the inquiry however was ended suddenly by Pascale.
The other person is Jessica Siron, who was a manager in Tesla’s environmental health and safety department. She allegedly sent documents to her person Gmail account exactly three days after accepting the offer from Rivian. Tesla claims she denied at first when she was confronted by the investigative team about this issue, but later she admitted to sending one document.
Tesla has claimed in the lawsuit that the company was able to carry out all this investigation because of the “recently acquired sophisticated electronic security monitoring tools.” by the investigating team. Tesla has however faced some flak for hacking and spying on its employees in the past, Tesla sure seems to be extremely particular about its information security, but due to the cut-throat competition and unfair practices in the industry, Tesla is left with no choice but to adopt such stringent measures. This is not Tesla’s first trade secret lawsuit either, the company recently settled a lawsuit against self-driving startup Zoox, which resulted in Zoox admitting that multiple employees it hired from Tesla possessed confidential information stolen from Tesla. Last year Tesla sued a former employee for leaking trade secrets to a Chinese Electric vehicle company called XPeng.
The associate general counsel of Rivian, according to Tesla had taken a “cavalier attitude” towards the accusations and claimed that such practices of stealing confidential information which could potentially harm the companies and their reputation was common in the industry.