Lawsuit claims Apple poaching auto engineers to build large-scale battery division

“Electric-car battery maker A123 Systems has sued Apple Inc for poaching top engineers to build a large-scale battery division, according to a court filing that offered further evidence that the iPhone maker may be developing a car,” Deepa Seetharaman and Edwin Chan report for Reuters.

“Apple has been poaching engineers with deep expertise in car systems, including from Tesla Inc, and talking with industry experts and automakers with the ultimate aim of learning how to make its own electric car, an auto industry source said last week,” Seetharaman and Chan report. “Around June 2014, Apple began aggressively poaching A123 engineers tasked with leading some of the company’s most critical projects, the lawsuit said. The engineers jumped ship to pursue similar programs at Apple, in violation of their employment agreements, A123 said in a filing earlier this month in Massachusetts federal court.”

“‘Apple is currently developing a large-scale battery division to compete in the very same field as A123,’ the lawsuit read… The company also sued five former A123 employees, who could not be reached for comment,” Seetharaman and Chan report. “A123 Systems is a pioneering industrial lithium-ion battery maker, which was backed by a $249 million U.S. government grant. It filed for bankruptcy in 2012 and has been selling off assets.”

“In its complaint, A123 said it believed Apple was looking to hire other battery engineers from companies including LG Chem Ltd, Samsung SDI Co Ltd, Panasonic Corp, Toshiba Corp and Johnson Controls Inc,” Seetharaman and Chan report. “Apart from the five defendants, at least six other ex-A123 engineers had moved over to Apple, according to their LinkedIn profiles.”

Read more in the full article here.

MacDailyNews Take: If you cannot retain your employees, regardless of how many hundreds of millions of U.S. taxpayers’ dollars you’ve flushed down the toilet, then you cannot retain your employees. Presumably, people would rather work for a thriving, solvent, wildly successful enterprise versus hoping and praying for continued paychecks from a failed, bankrupt flop now owned by a Chinese auto parts supplier (Wanxiang).

Related article:
Apple poached workers for new battery division, A123 Systems lawsuit claims – February 18, 2015


    1. Yes. That is a more interesting business than selling TVs and cars. A new energy solution for every house based on high efficiency solar panels charging a set of batteries to cut the electric bill .

    1. Well, if Apple was a partner or client of this company for the product that was developed by the division these employees are coming from – then there could be an issue, if there was a contract in place between the two companies.

  1. “developing a large-scale battery division to compete in the very same field as A123”

    The issue with this statement is that Apple doesn’t sell or license technology to outside companies. Everything is kept in-house so that their end product, whatever it is, has a value-added component to it.

    As an example, Apple doesn’t compete with Qualcomm in the SoC market. Qualcomm competes with Nvidia and Samsung.

    1. I think this is the core of the argument Apple and the employees would claim that they are not working on competing products as opposed to A123 (thats a road over here) that is trying to claim they are. In fact i would say this is evidence to suggest Apple is not working on building a car but taking the expertise of battery design to produce batteries for a different purpose entirely. A123 lawyers however will know in their desperation that to disprove their argument Apple who are notoriously secretive will have to reveal what they are working on to disprove the accusation. As such they are backing that Apple will prefer to buy them off to avoid that. Its a dirty business but then who would think differently about lawyers.

  2. Apple will become a battery company. If they wanted to be a car company they would buy one. It is not their way. All things tech to make a difference in cars being developed will be supplied by Apple to high end manufacturers that, like Apple, eschew market share for profit share. Tesla will be crushed. Those meetings between companies only seved to confirm that Tesla would not be a good partner. Think BMW, Mercedes-Benz, Lexus. Think An American company interested in breaking out of the crowd with a way to partner with Apple for battery tech, infotainment, human interface, DESIGN. Apple doesn’t need to be a car brand. They will be the distinguishing tech in the best car brands.

    1. No one knows what those meetings between Tesla and Apple were about… I seriously think Apple was at one time interested in buying Tesla, but Elon Musk declined. I think Elon is more interested in expanding this industry (they have given away all their IP and patents) and may have encouraged Apple to start their own electric car program. In Apple, Elon sees a company who’s values align with his own and has unlimited resources for R&D purposes.

      And I truly believe Apple is not interested in licensing out their platforms – they’ve never been interested in taking over the world. I think Apple would stick to what they do best – vertical integration, i.e. making the whole widget.

      1. “And I truly believe Apple is not interested in licensing out their platforms – they’ve never been interested in taking over the world.”

        Correct. Time and time again, both Steve Jobs & Tim Cook have said that Apple is interested in making the best, not the most, so I don’t know why writers keep putting the words world domination and Apple in the same sentence.

        1. “I don’t know why writers keep putting the words world domination and Apple in the same sentence.”

          Writers would rather fit those words into the headline if possible to ensure maximum click bait effectiveness, but just putting the words somewhere within the text will sometimes have to suffice.

          Writers always have to make everything controversial. If one company sues another over a minor contractual detail, it’s reported as a war. If a company proposes any sort of smart watch, it’s now going to be called an Apple Watch killer.

  3. Yellow Dog contracts to limit employees use of their skills have been invalidated by the courts multiple times in the past. They are considered restraint of trade. I doubt a company in bankruptcy prior to its employees leaving for other employment has a leg to stand on. . . especially based on contracts that specify they cannot work in their own fields of expertise for any specified period of time. That makes no legal sense. A123 sees the possibility of big dollars in Apple they might tap in to. The fact is that Apple does not compete with A123 so even if Yellow Dog clauses were legal, they would not hold in this instance. Nor does Apple and A123 have a non-poaching agreement for employees. This suit is absurd.

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