Former Rivian executive claims gender discrimination in new lawsuit ahead of IPO
A former Rivian executive claims in a new lawsuit that she experienced gender discrimination and a “toxic bro culture” during her short tenure with the company.
The lawsuit, filed Thursday in California, comes on the eve of Rivian’s initial public offering that could happen as soon as next week. The timing of the lawsuit also restricts Rivian’s ability to respond publicly, due to a “quiet period” that companies must abide by before an IPO. Rivian on Friday declined to comment for that reason.
The executive is Laura Schwab, the former vice president of sales and marketing, who was recruited to join Rivian in November 2020. Schwab alleges her boss, Rivian’s chief commercial and growth officer, helped stoke a “discriminatory, hostile environment,” claims the lawsuit.
Schwab contends she was fired two days after reporting her concerns to human resources last month. Rivian told her it was part of a reorganization as the company moved into an “operational phase,” the lawsuit states. Schwab claims she was the only person eliminated in that reorganization.
“Her termination has damaged her previously unblemished track record and reputation in the automotive industry, and the emotional impact is severe,” the lawsuit reads. “Rivian’s unlawful conduct also cost (Schwab) millions of dollars in unvested equity on the eve of the company’s IPO.”
Schwab’s lawsuit alludes to operational issues within the company that WGLT not been able to independently verify. Schwab, who previously worked for Jaguar Land Rover and Aston Martin Lagonda for the Americas, alleges Rivian has a “dearth of operational automotive experience.”
Schwab said she raised the following concerns:
- Rivian’s vehicles were underpriced, and that each sale would result in a loss to the company. Schwab claims her boss later agreed that they would need to raise the vehicle prices after the IPO.
- Schwab said the manufacturing process was unrefined, and as a result she recommended they make their first deliveries to employees. She said her boss dismissed that advice, though it was later adopted. (Rivian has confirmed that almost all of its first truck deliveries have gone to employees.)
- Schwab said she was ignored when she raised concerns about the use of an expensive third-party vendor to run Rivian’s test drive events.
Schwab claims she and at least one other female executive were excluded from meetings where important decisions were made, and that Rivian founder and CEO RJ Scaringe relies on a “small group of men to make decisions.” Schwab contends her boss canceled their regular 1-on-1 meetings in September and October, though he continued to meet with his male direct reports.
“This pattern of excluding female executives from the most important strategy and business operations meetings is one of the most revealing and also impactful types of gender discrimination experienced by senior executive women,” the lawsuit reads.
Rivian’s top leadership and board of directors do include several women. Rivian’s chief financial officer is Claire McDonough, who joined the company in January after working at JPMorgan Chase. The board of directors includes Karen Boone, Rose Marcario, and Pamela Thomas-Graham, all with extensive business leadership experience in many sectors.
This is not the only pending lawsuit facing Rivian. Tesla sued Rivian in 2020, alleging it poached employees and trade secrets. Rivian says the claims are meritless. Rivian also is fighting a lawsuit from the Illinois Auto Dealers Association that is trying to stop it from selling directly to consumers. The Illinois attorney general has sided with Rivian in that dispute.
Rivian is making its electric trucks, vans, and SUVs in Normal, where it already employs more than 3,300 people. It’s rapidly become the third-largest employer in McLean County.