Tesla Settles Suit Against Ex-Autopilot Head and His Startup

  • Carmaker had alleged Sterling Anderson breached his contract
  • Anderson formed startup with former Google car project chief

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Tesla Inc. settled its lawsuit against Sterling Anderson, the former director of the electric-car maker’s Autopilot program, according to a copy of the agreement signed by both parties.

“Tesla has withdrawn its claims, without damages, without attorney’s fees, and without any finding of wrongdoing,” Aurora Innovation LLC said in an emailed statement. Aurora agreed to reimburse the cost of an audit to “demonstrate the integrity” of its intellectual property.

A California state court docket listed a notice of the settlement on Wednesday. Tesla confirmed in an emailed statement that the lawsuit has been settled and said it’s been paid $100,000.

Tesla sued Anderson in January, alleging he breached his contract by forming a competing self-driving car startup with Chris Urmson, the former head of Google’s self-driving car program, and recruiting engineers away from the company led by Elon Musk. Anderson managed Autopilot’s hardware and software teams and helped steer Tesla through a regulatory probe involving a driver who died in a Model S sedan using the system last year. Urmson and Aurora were also named in the suit.

Settlement Terms

“Under the settlement, Mr. Anderson’s contractual obligations to Tesla will remain in place and will also be extended to Aurora, with additional specific protections being added to ensure there are no further violations,” Tesla said in its statement. “The settlement also establishes a process to allow Tesla to recover all of the proprietary information that was taken from the company, and it provides for Aurora’s computer systems to be subject to ongoing audits to monitor for any improper retention or use of Tesla’s property.”

The signed agreement -- a portion of which was redacted in the copy obtained by Bloomberg News -- requires that Aurora provide to Tesla within 30 days the results of a third-party forensic audit “in order to determine the absence, presence or use of any Tesla confidential information.”

Tesla has the right to audit Anderson’s and Aurora’s electronic devices and accounts a second time prior to February 2018, using a third-party examiner paid for by Tesla, according to the settlement. Aurora also has to provide names and titles of any former Tesla employees who join the company, the settlement said. Neither party admitted wrongdoing, the document shows.

Anderson and Urmson, who left Google in August, now co-lead Aurora Innovation. Three other engineers from the Tesla’s Autopilot group initially decided to join Aurora, though one later changed his mind, Tesla said in the Jan. 26 complaint. Aurora has also hired as its chief technology officer Drew Bagnell, who previously worked for Uber Technologies Inc.’s self-driving car program.

Tense Competition

Tesla filed its lawsuit in the midst of intense competition within Silicon Valley for autonomous-driving engineers and spoke to the threat established tech companies face when executives with experience leading teams want to move on.

In California, 30 companies have been issued autonomous-vehicle testing permits from the state’s department of motor vehicles. The ranks include established automakers Ford Motor Co. and BMW AG; suppliers Robert Bosch GmbH and Delphi Automotive Plc; startups including Zoox Inc. and Nuro Inc.; and most recently tech behemoth Apple Inc.

Google’s self-driving car project, now called Waymo, sued Uber in February. Waymo alleges Anthony Levandowski, a former engineer, stole laser-scanning system designs and technology and started a new company that Uber acquired last year.

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