Uber Fires Executive At Center Of Suit -- WSJ

By Jack Nicas Features Dow Jones Newswires

Dismissal relieves one pressure point, though company faces fights on several other fronts

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Uber Technologies Inc. fired its top driverless-car executive Anthony Levandowski, nine months after buying his startup for $680 million, in a bid to contain a spiraling legal battle with Google parent Alphabet Inc.

Uber said Tuesday it dismissed Mr. Levandowski after he missed the company's deadline to comply with court orders to produce documents related to Alphabet's lawsuit. Alphabet has accused Uber and Mr. Levandowski of conspiring to steal its trade secrets while Mr. Levandowski helped lead Alphabet's driverless-car unit, now called Waymo.

Now Uber is trying to extract itself from an increasingly awkward, and legally tricky, relationship with Mr. Levandowski. Uber has denied accusations that it used stolen technology to advance its self-driving car program. But the company has struggled to prove that because its employee at the center of the case, Mr. Levandowski, has repeatedly declined to comment or turn over any documents.

As a result, Uber hasn't denied that Mr. Levandowski stole Alphabet's files. Instead it has argued that if he did, Uber didn't know about the theft and Alphabet's trade secrets didn't make it into Uber's technology.

"They were already making clear to the court that they were not taking a position on his guilt or innocence," said Michael Brophy, an attorney with Withers Worldwide who has tracked the case. "Now this gives Uber complete license to throw Levandowski under the bus."

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Mr. Levandowski and his lawyers didn't respond to requests for comment.

Uber, one of the world's most highly valued startups at nearly $70 billion, is mired in a series of scandals, including a federal investigation into its use of software to evade regulators and a leaked video of Uber Chief Executive Travis Kalanick berating an Uber driver while a passenger in his car.

The results of an internal investigation into its workplace culture, prompted by accusations that executives ignored complaints about sexual harassment, are expected next week. Separately on Tuesday, the head of Uber's New York operations left a week after the company admitted it had shortchanged drivers in the city by tens of millions of dollars over 2 1/2 years.

The scandals could be complicating Mr. Kalanick's efforts to recruit a No. 2 executive at the company. Meanwhile, Mr. Kalanick is also dealing with personal tragedy after a boating accident on Friday killed his mother and left his father in serious condition.

According to Uber's dismissal letter to Mr. Levandowski, the executive's termination is effective June 15, unless he complies with the court order before that date. An Uber official said the company has revoked Mr. Levandowski's access to his email and security badge.

Uber in April removed Mr. Levandowski from its driverless-car program. Several weeks later, the judge formally barred him from working on the program.

Alphabet has separately filed two arbitration claims against Mr. Levandowski, which accuse him of launching competing startups while at Google and attempting to poach its employees. It isn't clear how Mr. Levandowski has responded to the arbitration claims, which are private.

A Wall Street Journal investigation found Mr. Levandowski ran side businesses throughout his nine years at Google, including some that sold technology to Google. Google eventually bought one of the startups for roughly $20 million.

Mr. Levandowski, who isn't a party in the lawsuit, has repeatedly invoked his Fifth Amendment rights against self-incrimination in the case. His attorneys initially said Mr. Levandowski wouldn't comment on the case because of the potential for criminal charges. U.S. District Judge William Alsup has since recommended that Justice Department officials investigate the accusations against Mr. Levandowski and Uber.

Judge Alsup this month encouraged Uber to use all means to force Mr. Levandowski to comply with his order to return the files and produce numerous other related documents. "Uber has no excuse under the Fifth Amendment to pull any punches as to Levandowski," he wrote.

Mr. Levandowski's attorneys have argued the judge's order violated his constitutional right protecting him from self-incrimination. On Tuesday, his attorneys cited his firing as further evidence the judge went too far.

The judge's order placed "Mr. Levandowski on the horns of an unconstitutional dilemma: either he must waive his Fifth Amendment rights ... or face immediate firing," they wrote in a court filing.

The Alphabet lawsuit could hinder Uber's ability to pursue self-driving technology, which Uber has said is crucial to its future, and expose it to potential civil and criminal damages.

Uber acquired Mr. Levandowski's driverless-truck startup, Ottomotto LLC, last August in a $680 million stock deal that elevated Mr. Levandowski to leading Uber's driverless-car program. Payment for the startup was tied to certain goals for the program.

In a press release announcing the move, Mr. Kalanick praised Mr. Levandowski as "one of the world's leading autonomous engineers," and said the acquisition gave Uber "one of the strongest autonomous engineering groups in the world."

Six months later, Alphabet sued Uber. Now Uber says little, if any, of Otto's technology has made it into its driverless-car program.

It is unclear how much of the $680 million in stock the company will ultimately have to pay for Otto. An Uber spokesman said earlier this month that none of Mr. Levandowski's 5.3 million Uber shares, or more than $250 million, had yet vested because technical milestones hadn't been met.

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

May 31, 2017 02:47 ET (06:47 GMT)