Ousted Hyperloop One Co-Founder Slaps Company With Scathing Wrongful Termination And Defamation Lawsuit

When it rains, it pours and right now Elon Musk finds himself in the middle of a storm of bad press. The latest bit of bad news for Mr. Musk is that the Hyperloop One concept he came up with is the center of a lawsuit filed by co-founder Brogan BamBrogan (do names get more hipster than that?) and several former and current employees.

Hyperloop One, formerly known as Hyperloop Technologies when it was conceived by Musk, BramBrogan, and Shervin Pishevar in 2014, is an ultra high-speed transportation concept that uses electric propulsion to accelerate people (or cargo) through a tube in a low pressure environment. It consists of an autonomous vehicle that levitates slightly above a track. One of the appeals is that it runs faster than an airplane over long distances.

Hyperloop One

Pishevar, who's listed as one of the defendants in the suit, previously told CNBC that Hyperloop has raised nearly $100 million in funding. It's an immensely popular project, though the lawsuit claims that Musk and other top brass at Hyperloop have grossly mismanaged the company. They stand accused of using the work of the team at large to "augment their personal brands, enhance their romantic lives, and line their pockets (and those of their family members)."

The lawsuit pours the rhetoric on pretty thick, drawing a distinct line between the engineers who've conceived and built the hardware, and the investors "who do not understand the technology," referring to the latter as "money men" who are more interested in "puffery" than seeing Hyperloop reach its full engineering potential.

"While the team worked tirelessly and successfully to hit initial targets, defendants established an autocratic governance culture rife with nepotism, and wasted the company’ s precious cash," the lawsuit states.

Shervin Pishevar (left) and Brogan BamBrogan (right)
Shervin Pishevar (left) and Brogan BamBrogan (right)

According to the lawsuit, Pishevar was generally not involved with day-to-day operations, but after dating the company's PR vendor, decided to increase her salary from $15,000 to $40,000 a month, making her the highest paid employee in the company. That lasted until their engagement fell through, at which time Pishevar "finally heeded suggestions that her work was worth little, and terminated the arrangement."

The lawsuit also alleges other examples of "nepotistic hires," all of which "quickly proved disastrous and wasteful," along with constituting "blatant breaches of defendants' fiduciary duties under basic corporate law."

BamBrogan filed the suit around a month and a half after he and nearly a dozen employees sent a letter to Pishevar and other top executives complaining that their work was "severely undervalued." Defendants made clear that "no significant changes would be made," and not longer after BamBrogan was forced to resign.

To say that Musk has a lot going on these days is an understatement. As all this plays out with Hyperloop, which Musk doesn't actually have a stake in (but is a big proponent, having helped come up with the concept), Tesla Motors, the automaker that Musk co-founded, is under investigation by the U.S. Securities and Exchange Commission (SEC) over a fatal accident involving the company's autonomous vehicle technology.