Hyperloop One settles, cloaks employee harassment lawsuit in secrecy
Hyperloop One has settled a lawsuit brought forward by former employees which accused the firm's board of nepotism, unprofessionalism, defamation and the misuse of company funds for personal gain.
Four former employees of the company, known for the development of Elon Musk's Hyperloop futuristic transport system, launched the case in July.
According to court documents, ex-CTO and co-founder Brogan BamBrogan, previous VP of business development Knut Sauer, David Pendergast, the former Hyperloop One assistant general counsel and former VP of finance William Mulholland have accused Hyperloop One of a range of inappropriate business practices, which eventually led to what the plaintiffs' say is wrongful termination and defamation of character.
As reported by CNBC, the four claimed that Hyperloop One, led by top executives CEO Robert Lloyd, General Counsel Afshin Pishevar and co-chairman and co-founder Shervin Pishevar abused their positions by placing family members and partners into high-placed and well-paid job roles.
The complaint cites the case of Pishevar's former fiance, who was granted a role in PR and had their salary raised from $15,000 to $40,000, which the complaint says is "far above market value."
The complaint alleges that the executives "continually used the work of the team to augment their personal brands, enhance their romantic lives, and line their pockets (and those of their family members)."
"Those with the expertise to bring the Hyperloop concept to fruition, the team that has done an incredible job building out hardware with their heads down and hands in the dirt have been systematically marginalized," court documents say. "The "money men" who do not understand the technology spent little time seeking to understand its potential, focusing instead on puffery -- turning the company into a marketing-driven exercise, instead of the engineering-driven enterprise it should be."
In addition, the complainants say Hyperloop One was guilty of breaching basic, lawful fiduciary duties.
In a countersuit for $250 million, Hyperloop One said the accusations were nothing more than an "illegal and failed plot by former employees to take over the company in a coordinated coup."
Hyperloop One and the firm's former employees have chosen to settle outside of court and the case is expected to be formally dismissed in the coming weeks.
"Hyperloop One is pleased to announce that it has reached a confidential resolution of litigation with its former employees and looks forward to continuing to execute on its business plan," the company said in a statement.
The details of the agreement, however, are confidential.
In a memo to employees acquired by the publication, Lloyd said that lawsuits "often halt momentum until they can be resolved. That didn't happen here."
Speaking to Forbes, representative attorney Justin Berger said the four former employees are looking to move on too, saying the group is "planning to build rad shit with rad people, starting with our take on Hyperloop."