A top Uber lawyer struggled to describe to a national judge why the firm reached a $7.5 million settlement with a former employee who accused it of stealing its rivals’ trade secrets, even though Uber believed the allegations a false attempt at blackmail.
The effort did little to clean up the latest dark cloud hanging through the ride-hailing service. Uber is struggling to defend itself at a high-profile suit alleging that it’s been constructing a fleet of self-driving automobiles with technologies stolen from Waymo, a Google spinoff.
U.S. District Judge William Alsup postponed it until February 5 after studying about a 37-page letter delivered to Uber attorney Angela Padilla with a former Uber security manager and his lawyer. The letter contained accusations of intellectual thievery and other shady behavior that have reshaped the Waymo case.
Although the May 5 letter contained allegations that Uber had stolen a number of Waymo’s trade secrets, Padilla didn’t discuss it with some of the lawyers involved in the case. That has incensed Alsup, who asserts that the correspondence is an integral piece of evidence, even though its allegations remain unproven.
“On the surface, it seemed like you covered up this,” Alsup scolded Padilla. “For reasons that, to me, are somehow inexplicable.” Sent the correspondence into the U.S. Justice Department in an attempt to deflate the “extortionist” asserts of Richard Jacobs, that was Uber’s director of international intelligence until seven weeks ago. Jacobs’ allegations have become a part of a Justice Department investigation into whether Uber has been breaking U.S. laws as it emerged as the world’s leading ride-hailing service.
Regardless of Uber’s belief that Jacobs simply was creating a story in an effort to milk the company, it paid $4.5 million to Jacobs and $3 million to Clayton Halunen, the Minneapolis attorney who wrote the explosive letter. Jacobs’ chunk of this money contains a one-year stint as a Uber consultant that’ll pay him $1 million through August.
That settlement prompted a Waymo lawyer to inquire Padilla: “Does Uber pay cash to extortionists?”
The revelation concerning the Jacobs settlement probably
Under wraps, a tactic that’s irked several U.S. lawmakers which currently threatens to find the company into more legal trouble.
Throughout her testimony, Padilla said Uber reluctantly paid Jacobs and Halunen to avoid distractions, protect the safety of overseas workers and avoid the expenses of a lawsuit. The explanation didn’t appear to convince Alsup, who will be presiding over the jury trial.
“People don’t pay that sort of money for BS and they certainly don’t employ them as consultants,” the judge stated.
Alsup also lashed out at the $3 million paid to Jacobs’ contacted Wednesday, Halunen stated he regularly operates on a contingency basis that needs him to be paid 40 percent of their entire settlement. “Whether it’s $1 or $10 million, I receive 40 percent,” Halunen said.
Halunen is very likely to be called as a witness in the Waymo trial. Misconduct by routinely with a messaging service called Wickr that erases conversations soon after they are sent.
Uber CEO Dara Khosrowshahi revealed in a Wednesday tweet that he ordered workers to stop with Wickr and other vanishing messages services while on the job in late September, shortly after he replaced firm co-founder Travis Kalanick.
“We look forward to our day in court and are as confident in the merits of the case as ever,” Uber said in a statement.
But before ending Wednesday’s hearing, Alsup cautioned the company that the job of defending itself against Waymo’s allegations is becoming more difficult. “Poor Uber, I don’t feel sorry for you because you brought this on yourself,” Alsup said.