Apple Facing Lawsuit for Poaching Key Battery Engineering Employees From A123 Systems

[MacRumors]

Amid rumors that Apple is hiring employees for a secret car project, the company is today facing a new lawsuit for poaching employees from battery manufacturing company A123 Systems. While the specific battery expertise of many of the employees is unknown, at least one of the employees had experience with developing battery technology for electric vehicles.

According to a lawsuit shared by Law360 (via 9to5Mac) Apple recently hired five employees from A123 Systems to create a "large scale battery division," violating noncompete agreements that employees signed with the latter company.

A123 filed suit Feb. 6 in Massachusetts Superior Court, alleging Apple hired away five employees who developed new battery technology and products and tested existing products, despite the fact that the employees were under contracts with noncompete, nonsolicit, and nondisclosure obligations.

Since June, Apple has been mounting "an aggressive campaign to poach employees of A123 and to otherwise raid A123's business," the complaint said.

The employees are said to have left under "suspicious circumstances," and A123 discovered correspondence between its former employees and Apple recruiters on company computers. A123 warned Apple about the noncompete contracts and sought assurance that Apple would not develop a competing business, but Apple reportedly stopped responding to A123's letters.

According to its website, A123 Systems creates "advanced Nanophosphate lithium iron phosphate batteries and energy storage systems," supplied to many vehicle manufacturers. Two of the employees that Apple hired, Dapeng Wang and Indrajeet Thorat, were PhD scientists who manned separate projects at A123, which the company has had to shut down because of difficulty finding replacements.

Wang's LinkedIn profile lists him as a "Development Engineer" at A123 Systems, working on prismatic cell design and tests, among other things. Thorat's LinkedIn profile indicates he held the position of "Battery Research Engineer, Modeling" and A123, where he worked on batteries for hybrid vehicles.

Designed experiments to understand/optimize performance of a cell for Hybrid and Plug-in hybrid vehicles (HEV and PHEVs), Grid energy storage and frequency regulation. Developed models to predict capacity fade and resistance rise during life of a cell under specific duty cycles.

Other employees listed in the lawsuit are Mujeeb Ijaz (A123 CTO), Don Dafoe (Cell Product Engineering), and Michael Erickson (Battery Materials Scientist). Many of the employees' profiles list them as still with A123, and none have any listed association with Apple. Dafoe's profile lists a "Bay area startup" as his place of employment since January 2015.

It is not clear what the A123 Systems employees hired by Apple are working on at the company or whether their work is related to the company's secret car project because Apple is constantly evolving its technology and working on a wide array of battery improvements for all of its future devices. The lawsuit suggests that A123 Systems is, however, concerned that Apple is working on something that competes with its own product lineup, which is focused on passenger and commercial electric vehicles.

Article Link: Apple Facing Lawsuit for Poaching Key Battery Engineering Employees From A123 Systems

 

[xARx2]

When will this stop?

 

[ArtOfWarfare]

I've been curious - what happens when this kind of non-compete thing happens?

Is it the employee who signed the contract, or the company that hired them, that ends up paying the price for violating the contract?

What kind of price is involved?

 

[Anangrypotato]

Maybe they want a car battery in the Apple Watch

 

[ArtOfWarfare]

When will this stop?

What is "this"? This isn't the type of lawsuit that is normally talked about on MacRumors (although I do recall there being a rather high profile case a few years ago where someone couldn't do what they were supposed to at Apple because it violated a noncompete agreement that had previous signed.)

 

[Laird Knox]

When will this stop?

I agree, non-compete clauses can be devastating for an individual.

 

[bennibeef]

I dont get this.. but I dont know much about that kinda stuff.

Apple gets a lawsuit for poaching people from another company, those people signed the contract and they broke it to work for Apple. Where is the illegal part on Apples side?

Would there be a contract between A123 and Apple to not hire employees from each other this would be a different thing, and of course a whole new lawsuit alone.

 

[hemanwomanhater]

I'm no contract law expert but how is Apple liable for that? A123 should be going after the former employees who signed the contracts, I would think. Apple didn't sign any contract with A123, and I don't really see how poaching itself would be illegal.

Although I think non-compete clauses should be banned anyway, personally.

 

[gnasher729]

Google, Apple, Facebook and others just lost a lawsuit and probably have to pay a few hundred million dollars because they had agreements not to hire employees off each other, thereby making it harder for employees to move from one company to the other and making more money.

Surely if this goes to court Apple should insist on getting the same judge who just convicted them because of anti-poaching agreements.

Although I think non-compete clauses should be banned anyway, personally.

Germany allows anti-poaching agreements if there is reasonable compensation. So you say to your old company "I can work at Apple for $250,000 a year, or McDonald's for $10,000 a year. So either you let me work at Apple, or you pay me $240,000 a year".

Would there be a contract between A123 and Apple to not hire employees from each other this would be a different thing, and of course a whole new lawsuit alone.

As we know, the employees could sue them both and would win.

 

[doelcm82]

I've been curious - what happens when this kind of non-compete thing happens?

Is it the employee who signed the contract, or the company that hired them, that ends up paying the price for violating the contract?

What kind of price is involved?

I've always been told that it is difficult to enforce a non-compete clause.

• If it's written too broadly, it could prevent an employee with certain skills from finding another job where those skills are useful, so it will be considered invalid.
• If it's too specific, then it's easy enough for the employee to work in a slightly different area.
• Most will have time limits.

In this case, Apple could have the engineers work on battery technology for its computer or phone divisions, and then later, after the time limit, shift them into (the rumored) automotive battery work. That's probably a more productive way to use them anyway.

 

[JamesMike]

A123 is probably looking at the deep-pockets of Apple.

 

[ArtOfWarfare]

Maybe they want a car battery in the Apple Watch

The 6+ runs for about 20 hours on a 2915 mAH battery.

Tesla makes 85 kAH batteries, which is equal to 29160 iPhone 6+ batteries.

So I figure you could run an iPhone 6+ for somewhere around 66 and a half years off of a fully charged Tesla battery. I think people might find that acceptable for an Apple Watch battery life. The battery only weighs somewhere around 900 pounds.

 

[Swift]

Hmm

Didn't Apple and Google get fined for that?

----------

The 6+ runs for about 20 hours on a 2915 mAH battery.

Tesla makes 85 kAH batteries, which is equal to 29160 iPhone 6+ batteries.

So I figure you could run an iPhone 6+ for somewhere around 66 and a half years off of a fully charged Tesla battery.

Hard to carry around, though.

 

[Laird Knox]

For those asking I believe that non-compete contracts are not valid in CA. From the sounds of it these new hires are being relocated to the Bay area. As a result the employees may be out of reach of A123. So instead they are going after Apple claiming they are using their size to crush A123 by hiring away their core team and thus crushing the competition.

It might be a bit of a reach but I suspect they can build enough of a case to at least go to trial.

 

[Mtmspa]

A123 is probably looking at the deep-pockets of Apple.

Exactly why.

 

[termite]

When will this stop?

The second the employee steps foot in California where these types of noncompetes are unenforceable.

 

[junior]

I agree, non-compete clauses can be devastating for an individual.

Think of it from a company's perspective.

You hire an individual with a certain set of skills, but no knowledge at all of the specific set of technological work being done at the company.
You invest in that individual, train and pay him/her, then they go off to another company with all the secrets of said technology.
It's pretty devastating to the company, particularly like in this case where 5 key personnel have been stollen to help that company create a competing product.

 

[termite]

Surely if this goes to court Apple should insist on getting the same judge who just convicted them because of anti-poaching agreements.

This is a completely different issue. Apple got in trouble for colluding with other employers, which is blatantly illegal. This issue is about non-compete agreements between one employer and one employee which are a condition of employment.

 

[Laird Knox]

Didn't Apple and Google get fined for that?

Not quite. They had an agreement not to hire each other's employees. In this case the employee has an agreement with A123 not to work for a competing company. Right now Apple and A123 are not competitors but rumors say they might be one day.

I believe A123 is really trying to stop the brain drain going to Apple. Not that they are trying to get a payday out of it. If they lose enough of their core employees it could be devastating for a smaller company.

----------

Think of it from a company's perspective.

You hire an individual with a certain set of skills, but no knowledge at all of the specific set of technological work being done at the company.
You invest in that individual, train and pay him/her, then they go off to another company with all the secrets of said technology.
It's pretty devastating to the company, particularly like in this case where 5 key personnel have been stollen to help that company create a competing product.

And from the employee's perspective it can mean no work after a layoff. The software industry in this town is a one trick pony. After a layoff pretty much the only option is to move out of state. I've seen it happen to many former coworkers. :/

 

[paul4339]

I don't understand the basis of the lawsuit.... What obligation did Apple have to A123? Is Apple violating some agreement with A123?

 

[aajeevlin]

I've been curious - what happens when this kind of non-compete thing happens?

Is it the employee who signed the contract, or the company that hired them, that ends up paying the price for violating the contract?

What kind of price is involved?

Same here, from reading the article I would say it'd be the individual's fault for breaking the contract knowingly. I mean sure Apple did approach the individual, but knowing that they are under contract all they had to do is to say no. How was Apple to know what kind of contract they are under (or is it assumed that everybody is under contract)?

Not saying no body is at fault here, but I feel like the blame should be placed at the individual that knowingly breaking the contract.

 

[Dekema2]

Apple has a lot of smoking guns lately. The employee, the cars themselves, and now this car-battery employee poaching. Could they be intentional leaks?

 

[Mac Fly (film)]

Is that smoke I see?

 

[Anangrypotato]

The 6+ runs for about 20 hours on a 2915 mAH battery.

Tesla makes 85 kAH batteries, which is equal to 29160 iPhone 6+ batteries.

So I figure you could run an iPhone 6+ for somewhere around 66 and a half years off of a fully charged Tesla battery. I think people might find that acceptable for an Apple Watch battery life. The battery only weighs somewhere around 900 pounds.

I was referring to the Apple watch, I know the 6+ has a massive battery.

 

[Rogifan]

Apple has a lot of smoking guns lately. The employee, the cars themselves, and now this car-battery employee poaching. Could they be intentional leaks?

What's weird is the FT and WSJ stories came out Friday afternoon and the Reuters story I believe came out on Saturday. And this was on a holiday weekend where the markets were closed on Monday. Seems like an odd time for Apple to leak.