There’s nothing illegal about a high-level employee moving from one company to a competing company (especially in California, which bans non-compete agreements). But businesses do still have the right to protect their trade secrets and legitimate business interests in the form of confidential information, especially when it comes to experimental technology.
So although Anthony Levandowski was perfectly within his rights to quit his position developing self-driving technology at Waymo (a division of Google’s parent company, Alphabet) to go work for Uber to develop similar technology, that’s not what Levandowski wanted to do, according to Travis Kalanick’s testimony in a recent corporate lawsuit.
Kalanick, the founder and former CEO of Uber, recently testified in court that he regularly hosted what he called a “jam sesh” at his home. He would invite other Uber executives to his house and they would brainstorm business ideas together. Kalanick testified that Levandowski would sometimes attend these jam sessions while he was still employed by Google. Kalanick said he had wanted to hire Levandowski, but Levandowski wanted to break out on his own and form his own company. Kalanick then came up with a solution in which he could get Levandowski to work for him while still allowing Levandowski to feel as though he had the freedom he wanted.
Levandowski left Google to start his own self-driving truck company, called Otto, which was acquired by Uber for $590 million shortly after the company was founded.
According to Waymo, which is suing both Uber and Otto for allegedly stealing trade secrets, the plan for Levandowski to leave Google to start his own company, and for Uber to buy that company, was really all an elaborate plan for Uber to steal trade secrets from Google relating to the self-driving technology Levandowski had been helping them develop. Waymo alleges that critical trade secrets pertaining to their self-driving technology went missing from their servers right before Levandowski quit to start his own self-driving truck company. Waymo further alleges that, because of Uber’s acquisition of Levandowski’s company, Uber now allegedly has possession of those trade secrets, which was Kalanick’s plan all along, according to the lawsuit.
Despite the fact that both Uber and Otto deny the allegations, Uber fired Levandowski shortly after Waymo filed their lawsuit.
Although large technology companies acquire smaller start-ups all the time, it’s standard practice for a due diligence report to be conducted and its results to be distributed to members of the larger company’s board before it votes on whether to acquire the smaller company. According to the deposition of a former Uber board member, the ride-sharing company’s board was allegedly not given such a report before they conducted their vote. He also claimed that, if he had seen the report, or in any way known or suspected that Levandowski had confidential files from Google in his possession, he would not have voted in favor of the acquisition.
His testimony is still to come and Kalanick will be called up to the witness stand at least once more before the court will reach a decision on the case.
Our Chicago non-compete agreement attorneys have defended high-level executives in a covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago Business. You can view that article by clicking here.
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