Hyperloop Sues Co-Founder Who Accused Company of Nepotism

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  • High-speed transport startup fires back at four ex-employees
  • Countersuit escalates rift at firm inspired by Musk’s vision

Hyperloop Technologies Inc. hit back at co-founder Brogan BamBrogan and three other former employees who last week accused the high-speed transportation startup of nepotism and mismanagement.

The Los Angeles-based company that is trying to realize Elon Musk’s vision of using levitation to move passengers and cargo at breakneck speed filed a $250 million countersuit Tuesday with some unflattering allegations of its own against the group it dubbed “the Gang of Four.” 

‘‘Today’s lawsuit demonstrates that these four men staged a failed coup to try to take over Hyperloop One and then conspired to start their own competing company,” Orin Snyder, a lawyer for the company, said in a statement. “They engaged in gross misconduct in pursuit of their illegal plan and will now be held fully accountable in a court of law.”

BamBrogan claimed in his July 12 lawsuit that he and two colleagues resigned after facing demotion while another co-worker was fired after they had written a letter detailing their concerns about mismanagement to Shervin Pishevar, the Silicon Valley venture capitalist who helped form Hyperloop in 2014; board member Joe Lonsdale; and Chief Executive Officer Robert Lloyd.

BamBrogan also claimed that Hyperloop’s former general counsel, the brother of co-founder Shervin Pishevar, had left a hangman’s noose on his chair last month at the height of tensions. But the company called it a lasso, playing off what it described as BamBrogan’s fondness for cowboy attitude and attire. BamBrogan also displayed erratic behavior, erupting in bursts of anger and sometimes appearing inebriated at the office, according to the countersuit.

The company known as Hyperloop One also said that before it was hit by last week’s lawsuit, it was trying to make big changes -- new faces on the board, more power for engineers and less control for Pishevar and Lonsdale.

Hyperlooptoo Domain

Hyperloop One alleges the former employees who sued for breach of contract and wrongful termination had a Plan B: starting a rival transportation company, as evidenced by web domain purchases including the domain for hyperlooptoo. In meetings, the plaintiffs discussed funds they had set aside or could raise to get a rival company off the ground, Hyperloop said in its complaint.

“Hyperloop One’s cross complaint goes beyond revisionist history, it’s pure fiction, and that will be shown by the evidence,” Justin Berger, a lawyer for the former employees, said in an e-mailed statement.

BamBrogan bought the hyperlooptoo.com domain only as a joke at the prompting of a coworker, and never intended to use it for business, according to his lawyer’s statement. The former employees didn’t intend to leave Hyperloop until their attempted intervention was met with threats of termination, Berger said.

BamBrogan and the other plaintiffs -- business development vice president Knut Sauer, assistant general counsel David Pendergast, and finance vice president William Mulholland -- asked other employees to go along with their demands, Hyperloop claims. In total, 11 employees signed the May 26 letter to management asking for changes.

Public Relations

The company denied other accusations, including that it overpaid a public relations firm, although it didn’t deny that Pishevar and a key employee of the PR shop conducted a romantic relationship that began after she was working on behalf of Hyperloop.

It also said Fideras, a firm run by Lonsdale’s brother to provide banking services, was hired only after Lonsdale recused himself from the decision.

The case is BamBrogan v. Hyperloop Technologies Inc., BC626780, California Superior Court (Los Angeles).