Tesla Lawsuit Against Rivian Moves Forward in California Superior Court

by Corey Lewis

March 30th, 2021 3:30 PM

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tesla lawsuit against rivian moves forward in california superior court

The lawsuits continue against EV startup Rivian. Though it hasn’t built any vehicles to date, the company has an aggressive plan to manufacture its “Tesla killer” vehicles at the former Diamond Star Motors plant at Normal, Illinois, and sell its wares directly to customers via nine showrooms across the nation. Various parties take issue with both the building and selling facets at Rivian, and the company has lawsuits with dealers in Illinois as well as Tesla.

Just yesterday we reported the company was being sued by the Illinois Automobile Dealers Association, which claims the state laws do not permit direct-to-consumer sales. Today, there’s news out of California about the other lawsuit against Rivian – the one where Tesla says the company stole its secrets.

Tesla started up the lawsuit in July of 2020 and claimed Rivian was “…knowingly encouraging the misappropriation of Tesla’s trade secret, confidential, and proprietary information by Tesla employees that Rivian hires.”

Tesla went on to claim in the suit that there was a pattern of employees leaving Tesla for Rivian and taking the aforementioned trade secret information with them. And it could be quite a bit of information, as in the lawsuit Tesla claimed that Rivian hired away 178 of its employees.

Rivian denied the allegations and continued to do so. The company says that Tesla only has a problem with Rivian because it knows Rivian is so threatening and wants to shut down any competition in the electric-car industry. Rivian motioned for a dismissal of the suit in the California Superior Court.

Today, judge William Monahan declined Rivian’s ask that the misappropriation of trade secrets claim be thrown out. In a win, the judge did dismiss Tesla’s “intentional interference in contract” claim and said the trade secrets claim covered that portion. Rivian also asked for dismissal of Tesla’s claims against seven former employees who now work for Rivian. The selected employees are the ones Tesla claims definitely disclosed trade secrets to Rivian after their departure. The judge declined Rivian’s request to dismiss.

It will take a while to reach the Summit of this legal action, as Galant lawyers on both sides have their Talons ready. Stay tuned.

[Image: Rivian, Tesla]

#ElectricVehicles #EmployeePoaching #HotLegalAction #IndustryNews #Lawsuits #Rivian #RivianAutomotive #Startups #Tesla #TeslaMotors #TradeSecrets

Corey Lewis

Interested in lots of cars and their various historical contexts. Writing things for TTAC since late 2016 from a home base in Cincinnati, Ohio. You can find me on Twitter @CoreyLewis86, and I also contribute at Forbes Wheels.

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6 of 11 comments

ToolGuy on Mar 30, 2021

• Highly reliable • Dramatically fewer moving parts • Better torque characteristics, with no transmission required • Significantly quieter For these reasons and many others, my future vehicles will all be utilizing the proven and familiar technology of steam propulsion.

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- Art Vandelay on Mar 31, 2021
  
  You know, I do wonder what modern tech could do with steam. Take something like the Doble and replace all the rube goldberg control systems with modern solid state electronics and bring modern aerospace coatings and insulation to the hot bits. I'd be curious. I wouldn't buy one, but I bet it would at least perform well. Then again, given how we generate electricity, odds are pretty solid that a modern EV is in fact steam powered.
  
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FreedMike on Mar 31, 2021

As I understand it, poaching employees is common practice with tech companies, so it makes sense why Tesla would be doing this.

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- SCE to AUX on Mar 31, 2021
  
  It is, but you have to be careful about it. In some industries, announcing that you're leaving for a competitor results in an immediate walk to HR, then to your desk with a cardboard box, then out the door as you hand them your badge. They don't want you sitting around for two weeks downloading company data to flash drives. Some workers even have a non-compete contract that prevents them from working for a competitor for two years, for example, or even dealing with the same suppliers, or recruiting your friends. My last employer tried to have me agree to such terms, and I told them to shove it. A few employees wouldn't be an issue, but having 178 employees leave for a direct competitor surely resulted in some data traffic review by Tesla. I'm sure they saw something smelly, so they have reason to believe Rivian got some free files from their new hires.
  
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- Art Vandelay on Mar 31, 2021
  
  Yep. Amazon's cloud service has put a hurting on my company. Now I assume Tesla has much better lawyers than us, but I've not seen much success in enforcement of those non compete clauses. I have seen an NDA bite someone though.
  
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- Jkross22 on Mar 31, 2021
  
  @SCE to AUX "Some workers even have a non-compete contract that prevents them from working for a competitor for two years" Can you name an instance when that contract is enforceable? Non-compete clauses are a joke. Good luck attempting to limit someone's ability for employment in a jury trial.
  
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