- Ex-workers of a lithium tech startup have sued the company, alleging toxic chemical exposure.
- Lilac Solutions, a company bankrolled by Bill Gates, countersued for trade secret violations.
- An attorney for the ex-employees said Lilac’s suit is a “pressure tactic to scare” his clients.
Four ex-employees of a lithium startup bankrolled by Bill Gates’ climate investment firm have sued the company, accusing it of “recklessly” exposing them to toxic chemicals that left them sick and injured.
The former workers at Lilac Solutions say in a 60-page lawsuit they were fired after they repeatedly sounded the alarm to upper management about their “overexposure” to hazardous dust and fumes inside a poorly ventilated Oakland, California, warehouse.
Lilac hit back against the ex-employees with its own lawsuit in late January, alleging the ex-workers “intentionally misappropriated” the startup’s trade secrets through their public court filings.
The company, which has said it raised more than $165 million in funding led by Gates’ climate investment firm Breakthrough Energy Ventures, developed new technology to extract lithium, a crucial material in electric car batteries.
Gates is not personally affiliated with the lithium company. His investment firm is not named in the ex-workers’ lawsuit.
A previous Business Insider review found companies are using trade secrets law as a legal strategy against workers who have accused them of wrongdoing.
Nick Yasman, an attorney with West Coast Trial Lawyers who represents the former employees, told BI that Lilac’s countersuit is a “pressure tactic to scare” his clients into backing down, and called the suit “utterly unmeritorious.
A Lilac spokesperson, though, told BI that “the allegations against the company are completely without merit.”
“Lilac Solutions will vigorously defend itself and its employees in this lawsuit, and we are confident that the legal process will vindicate us from these baseless allegations,” the spokesperson said. “Our focus remains on delivering industry-leading technology that unlocks faster, cheaper and cleaner lithium production to meet growing industry demand.”
Lilac ‘sacrificed human health,’ lawsuit says
The former employees’ lawsuit against Lilac alleges that the company “sacrificed human health and safety in pursuit of its goals.”
Plaintiffs Michael Mitchell, Khiry Crawford, Tyler Echevarria, and Anthony McCune worked out of Lilac’s Oakland processing plant, assisting in the manufacturing of tiny ceramic ion exchange “beads” used in the company’s process to extract lithium from brine, the lawsuit, filed in late November in California’s Alameda County Superior Court, says.
The beads or ion exchange material, referenced in court papers as “IXM,” “was comprised of many different toxic and hazardous chemical compounds,” says the lawsuit, which highlights a specific chemical compound, only identified as “Compound A,” containing “a toxic chemical” only referred to as “Chemical 1.”
“While Compound A can be a benign material at small exposure levels, significant exposure to Compound A can lead to high levels of Chemical 1 in the human bloodstream,” the lawsuit says. “High enough concentrations of Chemical 1 in the bloodstream can lead to Chemical 1 poisoning, which is a toxic condition caused by overexposure or chronic exposure to Chemical 1.”
The plaintiffs allege Lilac stored its stock of “Compound A” in torn bags that were “carelessly” piled on the warehouse floor, allowing particles to escape into the air.
Test results eventually confirmed that the ex-employees were “actively being exposed to toxic and dangerously high levels of Chemical 1 every work day,” the lawsuit says.
Prior to their employment at Lilac, the lawsuit says the plaintiffs were physically healthy. Yet when they were at the company and after they left, they experienced symptoms including severe respiratory pains, coughing, difficulty breathing, abnormal gastric pains, loss of balance, nervous system tremors, uncontrollable shaking in their hands and limbs, severe insomnia, anxiety, and depression, their lawyers allege in the complaint.
The plaintiffs say that throughout their employment with Lilac from 2021 to 2024, they were “regularly warned by colleagues about the danger of the materials they worked with,” but were provided with “extremely minimal and grossly insufficient personal protective equipment.”
The ex-workers say in the complaint their physical injuries were “substantially caused by LILAC’s willful concealment of the identities of many toxic chemicals,” as well as arsenic.
The former employees allege that their desks and workspaces were “constantly” covered in chemical dust and engulfed by fumes and that the “toxicity was inescapable.”
As early as 2021 and through January 2024, the employees complained to management about the “grossly insufficient” ventilation system in the warehouse, the lawsuit says.
“Despite Plaintiffs complaints, LILAC took no measures to increase ventilation and air purity within its warehouse until January 2024, after Plaintiffs were terminated,” it says.
On January 16, 2024, the workers were notified of their terminations and told it was the result of a “reduction in force,” the lawsuit says.
The lawsuit argues that the plaintiffs’ complaints about workplace health and safety and “whistleblower complaints” about Lilac’s “noncompliance with state and local health and safety codes and regulations, substantially caused and contributed” to the company’s decision to end their employment.
The lawsuit alleges California labor code violations, whistleblower retaliation, negligence, and discrimination.
“It’s a whistleblower retaliation case where the people who complained the most were the same ones who were fired,” Yasman told BI.
After their firings, the plaintiffs filed complaints of retaliation against Lilac with California’s Labor Commissioner’s Office and complaints with the state’s Division of Occupational Safety and Health, resulting in OSHA issuing Lilac four citations, the lawsuit says.
Lilac alleges the ex-workers breached confidentiality agreements
Lilac filed its countersuit against the ex-employees on January 31, calling it ” a case of clear and intentional misappropriation of trade secrets” in court papers.
The former workers, Lilac’s lawsuit says, “gained access to Lilac’s trade secret information relating to the chemicals and processes Lilac uses to manufacture certain ceramic beads.”
It’s a process that “none of its competitors do, know how to do” or were aware that Lilac does, the lawsuit says.
The lawsuit, which also alleges breach of contract, says the ex-employees were made aware that the chemicals and processes used to manufacture the so-called “IX beads” were “highly confidential and that they were not permitted to be disclosed to anyone outside of Lilac.”
Lilac alleges that the company “has been and continues to be irreparably harmed” as a result of the ex-workers’ “misappropriation of its trade secrets.”
Its lawsuit says a draft of the former workers’ legal complaint included repeated references to “Chemical 1,” which the company describes in the court papers as “the most important chemical in the manufacturing of the IX Beads.”
Yasman, during an interview with BI, argued that the trade secrets Lilac has alleged can be found on the company’s own website or in publicly filed patents.
The attorney and his team have filed a special motion to strike the case under California’s anti-SLAPP law that’s designed to curb meritless lawsuits and protect free speech rights.
