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Apple Sued for Poaching Engineers from Battery Maker

Those improbable rumors of Apple working on an electric car got a little more real today. Numerous sources are reporting that Apple is being sued by A123 Systems, a maker of batteries and battery systems for the consumer and commercial vehicles, and  commercial power plants.


The Apple Car, courtesy of The Onion

 Apple is accused of poaching engineers who were responsible for development and testing activities on cutting-edge electric vehicle batteries:

“Apple is currently developing a large-scale battery division to compete in the very same field as A123,” the lawsuit reads. If you’re wondering what the “very same field as A123’ would be, the answer is “advanced energy storage for electric-drive vehicles,” according to A123’s web page. A123 says that it has created more lithium-ion hybrid systems for transit buses than any other manufacturer in the world.

Apple is also said to be hiring staff battery experts away from other tech companies including Toshiba, LG, Samsung, and Panasonic. A123 Systems also claims that Apple has its  new employees doing essentially the same work that they performed for A123, thus violating noncompete and nondisclosure agreements.

Reuters reports that a total of 11 former A123 Systems engineers now list Apple as their employer (as well as over 60 former Tesla employees). While that doesn’t prove Apple has done anything wrong, it does show that there is a talent drain, and it’s flowing to Cupertino.

On a related note, A123 Systems was bought out of bankruptcy in 2013 by Wanxiang America, which in its native China is a huge car parts manufacturer. I’m not sure it’s wise to sue a potential future business partner, especially one which has deep pockets and believes in fighting to the end in support of principles.

The company is asking for a one-year order barring the defendants from working on any technology that directly competes with its business interests; it also wants to be paid for damages, although this isn’t specified.


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Paul February 19, 2015 um 3:14 pm

A reminder that the talent drain for sometime was the other way around (to Telsa), and its a bit rich suing Apple for the staff when Apple and the other IT companies just had to pay a $400 million for doing exactly that (a no-compete clause)

fjtorres February 19, 2015 um 5:14 pm

Apple and company were sued by their employees for blocking their mobility in order to artificially suppress their salaries.

Companies suing over employee poaching is related to the transfer of corporate knowledge, often in violation of employment contracts and non-compete clauses.

Long ago, Wal-Mart sued Amazon for hiring away entire swaths of their logistics department to manage Amazon’s logistics, thereby jumpstarting their online business.

Two interesting aspects are that A123 was recently bought up by a chinese company, mostly because nobody in the US was willing to ante up, and that it is based in Michigan, where (unlike California) non-compete clause are enforceable.

The fight may get interesting.

Nate Hoffelder February 19, 2015 um 5:25 pm

According to what I found online A123 is based in Massachusetts. But yes, non-competes are enforceable in MA.

fjtorres February 19, 2015 um 6:21 pm

Wikipedia lists their HQ as Livonia, Michigan.

I think they were founded in MA but moved the HQ to be close to their intended customers in the auto business. It may be Apple is trying to poach automaker contacts rather than technology or business expertise.

Nate Hoffelder February 19, 2015 um 6:27 pm

They sued in Massachusetts, and their website mentions a specific county as being their legal venue.

fjtorres February 19, 2015 um 6:35 pm

Their legal representation might be based in MA.
Or they might be venue shopping.
Expect Apple try to get the case moved to SiliValley.

Nate Hoffelder February 19, 2015 um 6:51 pm

If A123 really is based in MI then Apple has a good chance to get the venue shifted to Calif. That state would have just as good of a claim to jurisdiction, and the move would nullify the non-compete clauses.

fjtorres February 19, 2015 um 8:31 pm

Maybe the workers signed up when they were based in MA?
Like I said, things could get interesting.

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