Tesla Vs. Rivian Lawsuit Settlement - “An Alarming Pattern of Our Workers Poached By Rivian Were Caught Red-Handed Stealing Trade Secrets”

Rivian is accused of corporate espionage. 

It's a case that amounts to nothing less than corporate espionage, a serious accusation in the business world.

It was a serious accusation when Tesla filed a lawsuit against Rivian in 2020. Tesla accused Rivian of poaching its employees and stealing trade secrets, a charge that could have significant implications for Rivian. 

The report from Automotive News (by subscription) said, "The world's leading electric-vehicle maker alleged that four of its former workers took highly sensitive proprietary information as they left to work for the rival startup, and Tesla said it suspects there are at least two more culprits."

According to Bloomberg News, Tesla has reached a "conditional" settlement in the lawsuit. Rivian, however, has not backed down. It has denied any wrongdoing and criticized the lawsuit as an effort to suppress competition in the EV market.

The dispute started over four years ago when Elon Musk's electric vehicle maker, Tesla, accused Rivian of an "alarming pattern" of poaching its employees and stealing trade secrets. Tesla later said that some workers were "caught red-handed" misappropriating core technology for its next-generation batteries.

Rivian said it requires all new employees to confirm "that they have not, and will not, introduce former employers' intellectual property into Rivian systems."

"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," the company said in an emailed statement. "This requires the contribution and know-how of thousands of employees from across the technology and automotive spaces."

The court document, a crucial piece in this case, states: 

Tesla has recently discovered, however, an alarming pattern among Tesla employees who recently left to join Rivian. As Tesla knows, Rivian instructed one recently departing Tesla employee about the types of Tesla confidential information that Tesla needs. 

Both Rivian and the employee knew full well that taking information would violate the employee's non-disclosure obligations 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.  

Tesla says it found other employees stealing trade secrets. 

Tesla said it uncovered five additional employees who had similarly taken "Tesla highly valuable, trade secret, confidential, or proprietary information as they left Tesla." 

AN says Rivian and a group of its employees who defected from Tesla lost bids to get the lawsuit thrown out, and a trial was set for March.

Tesla didn't disclose specifics about the agreement in a court filing but told a California state judge that it expects to seek dismissal of the case by December 24 upon satisfactory completion of the terms, the reaper says.

Rivian declined to comment, and Tesla's lawyer didn't immediately respond to a request for comment from Automotive News.

More Rivian News. 

I recently reported that Rivian is not only having financial problems, but workers in its factory are suffering severe injuries due to an unsafe work environment. Check out my report here for Addison's troubling story.

I am Denis Flierl, a Senior Torque News Reporter since 2012. My 30+ year tenure in the automotive industry, initially in a consulting role with every major car brand and later as a freelance journalist test-driving new vehicles, has equipped me with a wealth of knowledge. I specialize in reporting the latest automotive news and providing expert analysis on Subaru, which you'll find here, ensuring that you, as a reader, are always well-informed and up-to-date. Follow me on my X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.

Photo credit: Denis Flierl via Rivian