Fisker stiffed engineering firm developing its low-cost electric vehicle and pickup truck, lawsuit says

Henrik Fisker took the stage last August and proudly presented two prototypes designed to catapult his eponymous electric vehicle startup, Fisker, into the mainstream. There was the Pear, a low-cost electric vehicle aimed at the masses, and the Alaska, Fisker’s entry into the red-hot pickup truck market.

In the weeks that followed, Fisker stopped paying the engineering company that helped develop the vehicles, according to a groundbreaking lawsuit filed this week in federal court. The company, a US subsidiary of German engineering giant Bertrandt AG, also accuses Fisker of wrongfully owning intellectual property associated with these vehicles. He is seeking approximately $13 million in damages.

The lawsuit adds to a pile of legal problems facing Fisker, which is on the brink of bankruptcy. At least 30 lawsuits alleging lemon law violations have been filed, a handful of which have already been settled by Fisker. A former director has filed a proposed class action lawsuit seeking unpaid wages. A textile supplier also sued Fisker for more than $1 million, claiming the EV startup never paid.

The engineering lawsuit stands out amid the legal woes because it suggests that financial cracks were already forming within Fisker last August despite its CEO’s bold claims to that point.

“Bertrandt’s lawsuit is without merit,” Matthew DeBord, Fisker’s vice president of communications, said in an email to TechCrunch. “This is a legally baseless and disappointing attempt by a valued partner to obtain payments and intellectual property rights from Fisker to which Bertrandt has no rights under the relevant agreements or otherwise .” He declined to comment on the other cases.

Bertrandt said in the complaint filed in the Eastern District of Michigan court that it entered into a “design and development agreement” with Fisker in May 2022 to provide “engineering, design and development services” on the Pear — a contract worth $35 million, according to a copy of the design and development agreement attached to the lawsuit. (The agreement also shows that Fisker previously hired Bertrandt to complete a feasibility study, cost analysis, timeline proposal and other items for the Pear EV.)

At some point after making the deal, Bertrandt claims Fisker asked him to do similar work in connection with the Alaska van. Bertrandt claims in the complaint that a formal written agreement was never signed with Fisker for Alaska, but that it included a quote of $1.66 million that Fisker agreed to pay.

Fisker stopped paying Bertrandt at the end of August 2023, according to the complaint. The company remains unpaid on its invoices through January 31, 2024, bringing the unpaid total to $7,061,443. The engineering company also claims that Fisker’s decision to suspend development work on the Pear and Alaska electric vehicles constitutes a further breach of contract because it resulted in delay costs for Bertrandt.

Bertrandt says he had a meeting with Fisker on February 6, 2024 during which the EV startup “acknowledged its responsibility in paying these invoices and agreed to promptly pay $3,685,000 as partial payment” – but did not then never made this payment.

According to Bertrandt, the breach of contract cost the engineering firm an additional $5,858,000 in “lost profits, delay costs and incidental damages,” which is why she is seeking $12,919,443 in total damages.

Additionally, the company claims to have demanded on April 22 that Fisker “return all intellectual property of Bertrandt” and “certify in writing that Fisker had not retained any paper or electronic copies,” and claims that the EV startup has “not does neither.” .”

“Fisker has unjustly enriched himself at the expense of Bertrandt,” the firm’s lawyers write in the complaint.

Bertrandt is not the only supplier to sue Fisker so far.

Georgia-based Corinthian Textiles sued Fisker in Los Angeles Superior Court in early April. The supplier says it has reached an agreement with the EV startup in early 2023 to provide it with “customized products for use in Fisker automobiles.” The company doesn’t say what products it made for Fisker, but the company’s website says its automotive division specializes in floor, trunk and trunk mats, as well as “automotive carpets.”

Corinthian claims Fisker “has refused and continues to refuse” to pay bills and other fees in the amount of $1,077,571.75.

Doing overtime

Days before Bertrandt sued in federal court, Robert Lee, an employee who worked for Fisker from October 2023 to March 5, 2024, filed a proposed class-action lawsuit in Los Angeles Superior Court, alleging a pattern of overworking employees and not compensating them properly. The suit also claims Fisker failed to reimburse expenses and pay wages owed when employees left the company.

Lee says he and other hourly employees worked “well over” eight hours a day and 40 hours a week, and often worked more than 12 hours a day. He claims they were “frequently required” to work weekends. Fisker did not pay employees for this overtime, according to the complaint. Lee also claims Fisker failed to properly track hours worked and even deducted commissions from their hourly wages.

It claims employees were “regularly required to work outside of normal hours and (Fisker Inc) created a policy to count fewer hours than the total number of hours actually worked” in order to “achieve certain goals and to generate more sales.

Lee also claims that Fisker “effectively coerced and pressured its non-exempt employees to work around the clock, to have their wages deducted, to have their wages miscalculated, to take short cuts (which amounted to a missed meal period) or forgo meal and rest periods (or will not be paid for their breaks).

Lemons

Fisker began facing lawsuits in California alleging it was violating the state’s lemon law as early as last November, which TechCrunch previously reported. The company has begun settling some of those earlier lawsuits, which essentially amounts to repurchasing the vehicles, according to court filings and a person familiar with the settlements.

Other lemon lawsuits continued to roll in across the state, where Fisker delivered the bulk of its cars to the United States.

Customers may have taken action in other states where Fisker has delivered cars, such as New York, Florida and Massachusetts. These states require lemon law disputes to be submitted to arbitration, making it difficult to know how many actions may be pending against the company.

In its recent 2023 annual filing, Fisker indicated that it is still defending itself against a proposed class action lawsuit filed by shareholders alleging violations of securities laws. Fisker then goes on to vaguely say that “(v)arious other legal actions, claims and proceedings are pending against the Company, including, but not limited to, matters arising from alleged product defects; employment issues; product warranties; and consumer protection laws.

He also implied that he had been contacted by unnamed government agencies for information about his activities, including subpoenas, in a new line of text that he had never included in any of his filings prior filings with the SEC.

“The Company also receives from time to time subpoenas and other requests for information or inquiries from agencies or other representatives of the federal, state, and foreign governments of the United States,” the company wrote . DeBord, the vice president of communications, told TechCrunch that Fisker “currently (has) no pending subpoenas from governments.”

Correction: The article incorrectly identified Robert Lee as Fisker’s former director of technical services. The Lee who filed the complaint is an employee who worked for Fisker from October 2023 to March 5, 2024. The article has been corrected.