Tesla And Self-Driving Startup Zoox Reach Settlement

Zoox and Tesla have reached a settlement for their lawsuit after Zoox confessed that some of its new hires had obtained certain Tesla documents when they joined the company. Zoox will pay Tesla an undisclosed amount; the company will also be audited to make certain that no employees have or are using Tesla’s confidential information. The parties stipulated for voluntary dismissal with prejudice.

Tesla sued Zoox after four of its previous employees joined Zoox. Tesla claimed the former employees stole “Tesla’s proprietary information and trade secrets to help Zoox leapfrog past years of work needed to develop and run its own warehousing, logistics, and inventory control operations.” Specifically, they are accused of stealing information related to Tesla’s WARP system; Tesla states this was “blatant and intentional.” They were accused of misappropriating trade secrets, violating agreements with Tesla, breaching their duties of loyalty with full knowledge in order to support Zoox.

“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,” Zoox said. The company added it “regrets the actions of those employees,” and it will “conduct enhanced confidentiality training to ensure that all Zoox employees are aware of and respect their confidentiality obligations.”

Zoox is a self-driving startup founded in 2014. Its “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. The settlement comes after Zoox has laid off some employees because of the coronavirus pandemic.