A123 Systems Drafting Settlement With Apple on “Poaching” Lawsuit

A123 Systems, the electric-car battery maker that is suing Apple for allegedly “poaching” employees, is in the final steps of drafting a settlement with the electronics giant, according to a court filing.

A123 and Apple have reached an agreement and signed a term sheet, according to a document filed yesterday in Massachusetts district court. A123 was responding to a request to the court by Apple to dismiss the case, which the Cupertino, CA-based company says was centered around “baseless conjecture.”

In the original claim filed in February, A123 had alleged that Apple “raided” its employees to develop a competing large-scale battery business. The company named five of its former employees in the suit for allegedly breaking noncompete and nonsolicit agreements, particularly targeting Mujeeb Ijaz, its former chief technology officer, who A123 alleges was involved in getting the other defendants hired by Apple.

In the original lawsuit, A123 accused Ijaz of recruiting Don Dafoe, who was vice president of cell product engineering at A123, after Ijaz left the company for Apple in June 2014. The other former A123 employees, Michael Erickson, Dapeng Wang, and Indrajeet Thorat, all began working for Apple in early 2015, the lawsuit said.

Apple responded with its request for dismissal in March, calling A123’s claims threadbare.

A123 has had a torrid history. Founded in 2001, the company had the country’s largest IPO in 2009 at $371 million. By 2012, it found itself in bankruptcy and restructuring. Chinese multinational Wanxiang took over the business in 2013.

A123 says that projects the former employees were working on have been “principally shut down” since they departed, and alleges it suffered “severe economic impact” because Apple “raided” its Venture Technologies division. The company lists A123 System’s corporate headquarters in Livonia, MI, and says A123 Venture Technologies is located in Waltham, MA.

Apple and A123’s attorneys declined to provide additional comment.

A123 v. Apple Drafting Settlement

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at [email protected] Follow @xconholley

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