Tesla accuses rival Rivian of recruiting employees to steal trade secrets

Elon Musk-owned company says Rivian has hired former Tesla employees in breach of their non-disclosure agreements

Tesla has filed a lawsuit against competitor Rivian accusing the electric vehicle maker of stealing employees and trade secrets, according to the complaint posted by Tesla news website Tesmanian.

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The Elon Musk-owned company said in the suit filed in a San Jose, Calif., state court that Rivian has hired former Tesla employees in breach of their non-disclosure agreements (NDAs) and encouraged those employees to "take" trade secrets and other proprietary information "as they leave Tesla."

"Tesla has recently discovered ... an alarming pattern among Tesla employees recently leaving 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 Rivian and the employee knew full well that taking such information would violate the employee's [NDA] obligations to Tesla," the suit reads.

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Tesla did not immediately respond to an inquiry from FOX Business.

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The suit adds that Tesla, founded in 2003, has discovered three additional employees who acted in a similar manner after leaving the company for Rivian, founded in 2009. Two of those employees were questioned by investigators, and one "actively interfered with Tesla's investigation."

Rivian R1T EV (Rivian.com)

Rivian has hired a total of 178 former Tesla employees, the complaint says.

A Rivian spokesperson told FOX Business that Tesla's lawsuit is "baseless" and runs "counter to Rivian's culture."

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"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 spokesperson said. "This requires the contribution and know-how of thousands of employees from across the technology and automotive spaces."

Tesla Cybertruck (Tesla.com) (Tesla)

Rivian requires "all employees to confirm that they have not, and will not, introduce former employers' intellectual property into Rivian systems," the spokesperson said, adding that the lawsuit’s "allegations are baseless and run counter to Rivian's culture, ethos and corporate policies."

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Tesla unveiled its electric Cybertruck in November 2019, and Rivian unveiled its competitor R1T and R1S vehicles in 2018. The companies are expected to release their respective vehicles, which are currently available to preorder, in 2021.

"Misappropriating Tesla's competitively useful confidential information when leaving Tesla for a new employer is obviously wrong and risky," the Tesla complaint reads. "One would engage in that behavior only for an important benefit—to use it to serve the competitive interests of a new employer."

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