Uber vowed to cover legal fees for engineer over trade secrets
SAN FRANCISCO Uber made an unusual commitment to the engineer it hired to lead its driverless car project: It would cover the costs of legal actions against him over information stored in his head from his previous job at Waymo.
That promise — buried in the fine print of an otherwise straightforward employment contract for an executive — emerged in documents unsealed last week in San Francisco federal court.
Waymo alleges that in 2015, Anthony Levandowski and Uber Technologies Inc. hatched a plan for him to steal more than 14,000 proprietary files, including the designs for lidar technology that helps driverless cars see their surroundings. Uber, which acquired Levandowski’s startup, Otto, in August for US$680 million, has denied Waymo’s allegations.
The Alphabet Inc. unit’s claims were bolstered Wednesday when it told the court Uber has said that Levandowski informed then-chief executive Travis Kalanick more than a year ago that he had five discs containing Google data. Kalanick told him not to bring the information to Uber, and Levandowski said he then destroyed the files, according to the filing.
Even though neither of the men are still at the company — Kalanick stepped down this week while Levandowski was fired last month — Uber has to defend itself from Waymo’s suit as well as a possible criminal probe after U.S. District Judge William Alsup asked prosecutors to take a look at the allegations.
Uber’s legal fees promise is further evidence that the talent competition in the driverless car sector is cutthroat. It was a highly risky benefit to offer, according to Jim Pooley, a lawyer at Orrick in Menlo Park, Calif.
The indemnification document may be “very powerful” evidence that Uber suspected Levandowski would be taking proprietary information from Waymo, said Pooley, who is the author of the Secrets: Managing Information Assets in the Age of Cyberespionage.
“What Uber did was to leave the door open for Levandowski to use whatever he remembered of Waymo’s trade secret information, so long as he didn’t deliberately memorize it,” the lawyer said.
Waymo hasn’t sued Levandowski directly. In its suit against Uber, the engineer has refused to testify, asserting his constitutional right not to incriminate himself. But if he is found to have broken the law, all bets could be off to tell Levandowski to return the treasure trove to its rightful owner, the judge said in a May 11 ruling.
Pooley, the lawyer at Orrick, said he’s never seen a written agreement that makes overt reference to “bad acts” like Levandowski’s contract with Uber.
The document, dated April 11, 2016, references “Pre-Signing Bad Acts,” which covers behaviour including fraud and trade-secrets theft, as well as “Post-Signing Specified Bad Acts.” Misconduct in the latter time period wouldn’t be indemnified, “with the exception of retaining confidential information solely in the memory of an employee.”
Pooley said such a “vague and potentially very broad exception” looks “very troublesome” for Uber as the case heads toward trial because the company basically told Levandowski: Don’t worry about what’s in your head.
Waymo said in a filing unsealed last week that the indemnification agreement is more proof that Uber knew Levandowski stole trade secrets.
The Alphabet unit also alleged that the ride-hailing company “affirmatively incentivized” the engineer to use the information illegally by linking his compensation to rapid progress in research and development.