Regarding Publication Authorship I worked with this teammate on a 4-people class group project. We did research, conceived ideas and prototyped the concept together. I just found out that he is publishing this research work with himself as the first author and another guy who was not in our group as the second author. He may write the entire paper, but the implementation of the research and the majority of the published results come from the team effort. He did not even notify us that he planned to publish it. It seemed like he consolidated the research work and did all the writing with the other author behind our back without notifying us. I am wondering what should I do with this situation?

We are all graduate students enrolled in a master's program. Both he and I are applying for the same Ph.D. program this year. He has a few publications before coming to this graduate program. I am totally new to the academic publication and just started collaborating with a professor this summer on a project which could lead to publication. I am not sure whether this situation perceived as "unethical conduct" or "reasonably tolerable" in the academic world, as the research efforts are hard to be quantified. How should I approach this?
It is very possible that it is unethical, but it would take a bit of analysis to clarify it. Your course professor is probably a good person to adjudicate it. I'd suggest that you take the problem to them, preferably in person. 

Using other people's work without attribution is plagiarism. 

Go see the prof.