Self-driving startup Zoox has admitted that four of its employees took confidential documents from their previous employer Tesla, according to a statement issued after the company settled a lawsuit this week over the matter.
“Zoox acknowledges that certain of its new hires from Tesla were in possession of Tesla documents pertaining to shipping, receiving, and warehouse procedures when they joined Zoox’s logistics team,” the startup said in a statement to Reuters. Zoox says it will pay Tesla an undisclosed amount of money and will perform an audit to “ensure that no Zoox employees have retained or are using Tesla confidential information.”
Zoox says it “regrets the actions of those employees,” and says it will also “conduct enhanced confidentiality training to ensure that all Zoox employees are aware of and respect their confidentiality obligations.”
Founded in 2014, Zoox’s plan has been to build self-driving vehicles from the ground up that were more purpose-built and far more maneuverable than traditional vehicles retrofitted with autonomous tech. Its tech has been praised by many, and the company raised $500 million in July 2018 on the way to a $3 billion valuation. But just one month later, its board of directors pushed out co-founder and CEO Tim Kentley-Klay. (He was replaced with Intel’s former chief of strategy, Aicha Evans, who is still Zoox’s CEO.) The settlement now comes as Zoox has laid off around 100 full-time employees, as well as contract workers, amid the COVID-19 pandemic.
The lawsuit was filed against Zoox and four Zoox employees in March 2019, all of whom had previously worked at Tesla. The Silicon Valley automaker claimed that those employees brought “proprietary information and trade secrets” about Tesla’s manufacturing operation to Zoox, which allegedly helped the startup “leapfrog past years of work needed to develop and run its own warehousing, logistics, and inventory control operations.”
Tesla said those employees “absconded with select proprietary Tesla documents” on their way to Zoox, in what the company called a “blatant and intentional” act. Specifically, the employees were accused of stealing confidential information related to the company’s “WARP” system, which is a proprietary logistics software platform Tesla developed to oversee the manufacturing, warehousing, inventory, distribution, and transportation of its products.
Tesla described what sounded like fairly incriminating evidence of the theft in its lawsuit. It said that Scott Turner, who was previously a manager at one of Tesla’s distribution centers before joining Zoox, had emailed “internal schematics and line drawings of the physical layouts of certain Tesla warehouses” to his personal email address with the words “you sly dog you…” along with other documents that contained information about the company’s receiving and inventory procedures.
After Turner joined Zoox, Tesla alleged that he gave the startup “names of at least four other Tesla employees” with “insights about their pay structure at Tesla.” Christian Dement, a warehouse supervisor that Turner hired away from Tesla, allegedly emailed four confidential documents from his company account to his personal address with the subject “Good Stuff.”
Tesla said it learned about the alleged theft after the third employee, Sydney Cooper, supposedly admitted to sending documents to Turner, and after the fourth, Craig Emigh, mistakenly sent an email to Cooper’s old Tesla address with a modified version of a proprietary Tesla document attached.
Neither Zoox nor the four employees ever officially disputed Tesla’s claims in court. But the evidence itself never surfaced before this week’s settlement.