Yesterday, Uber released a letter that it had sent to Anthony Levandowski notifying him of its intention to terminate him as an employee because of his failure to cooperate with an Order issued on May 11, 2017 by U.S. District Court Judge William Alsup.   While most of the media coverage of the case had previously focused on the portion of the Order effectively quarantining Levandowski from Uber’s development of its LiDAR technology, perhaps the most noteworthy portions of the Order proved to be Judge Alsup’s directives to Uber to get to the bottom of what Waymo trade secrets Levandowski might have shared with others at Uber.  (A link to Judge Alsup’s Order can be found here).  As I explain below, those two paragraphs of Judge Alsup’s Order inevitably set Uber against Levandowski and led to his termination.

Background:  In his Order dated May 15, 2017, Judge Alsup found that Waymo had presented “compelling evidence” that Levandowski had downloaded over 14,000 confidential files from Waymo immediately before leaving his employment there on January 27, 2016.  However, Judge Alsup expressed frustration that he could not determine whether Levandowski had shared any of the information within those files with his new employer Uber because Levandowski had invoked his Fifth Amendment right against self-incrimination.

Judge Alsup took the highly unusual step of making a criminal referral for the matter to the U.S. Attorney’s office in the U.S. District of Northern California; while most commentators viewed this to be directed at Levandowski, the referral certainly had the potential to ensnare others at Uber.  And while Uber was initially able to stave off an injunction shutting down its autonomous car research by demonstrating that its LiDAR technology was different from Waymo’s technology, Judge Alsup remained unconvinced that there was no contamination from Levandowski, whose companies Otto Trucking and Ottomotto were purchased by Uber for $680 million last August.

The Critical Portions of the Order:  As a result, in addition to directing Uber to ensure that Levandowski had no further role in the development of its LiDAR technology (a step that Uber had already taken), Judge Alsup made two critical rulings.

First, in Paragraph 4 of the Order, Judge Alsup directed Uber and its forensic consultant Stroz Friedberg to “conduct a thorough investigation and provide a detailed accounting under oath setting forth every person who has seen or heard any part of any downloaded materials, what they saw or heard, when they saw or heard it, and for what purpose.”  Not only did Judge Alsup make clear that this investigation was to be extremely detailed (down to the identification of the chain of custodians for any information that might have been shared) but he ordered that Uber “must use the full extent of their authority and influence to obtain cooperation . . . from all involved” — namely, Levandowski and his colleagues who had joined Uber.  If Levandowski refused to cooperate, the judge ordered that Uber “set forth the particulars, including all efforts made to obtain cooperation.”  This accounting was ordered to be done by June 23, 2017.

Second, Judge Alsup ordered in Paragraph 5 that by June 23, 2017, Uber “provide Waymo’s counsel and the Court with a complete and chronologically organized log of all oral and written communications–including, with limitation, conferences, meetings, phone calls, one-on-one conversations, texts, emails, letters, memos, and voicemails–wherein Anthony Levandowski mentioned LiDAR to any officer, director, employee, agent, supplier, or consultant of defendants.”  Judge Alsup ordered that the “log shall identify for each such communication the time, place (if applicable), mode, all persons involved, and subjects discussed, as well as any and all notes or records referencing the communication.”  Of course, this log would require Levandowski’s cooperation to compile, since it focused on his communications with others at Uber.

Think for a moment about what this meant for Uber.  Not only did it have to conduct a thorough and painstaking forensic investigation and log of all communications with Levandowski for over 13 months, with an aggressive competitor looking over its shoulder to point out every mistake or flaw in that investigation; Uber had to do so for a skeptical court that specifically found that Uber “knew or should have known that Levandowski had taken and retained possession of Waymo’s confidential files.”  I doubt any officer or legal representative was particularly eager to be the one to sign off on the report and accounting under oath, especially against the backdrop of a criminal referral to the U.S. Attorney who is now likely scouring the record for potential crimes.

The effect of these two paragraphs was to put Uber in a vise to use its influence to compel Levandowski to cooperate or to face potential consequences for non-compliance with the Order, which could include contempt or a potentially broader injunction that could hinder its autonomous car development efforts.  Because Judge Alsup could not compel Levandowski to cooperate, he turned the screws on Uber to use its influence to persuade or cajole Levandowski to cooperate.  In essence, Judge Alsup put the onus upon Uber to get to the bottom of what happened, and he ratcheted it up by requiring the detailed accounting and reporting by Uber under oath.

What Does Levandowski’s Termination Mean For The Case?  The uneasy alliance between Levandowski and Uber is now likely over, which means Levandowski might be incentivized to point the finger at Uber should he reconsider his Fifth Amendment invocation.  In the short term, Uber can at least argue that it has done what it could to compel Levandowski’s compliance and that any shortcomings in the record are not its fault.

Of course, the June 23 reporting date now looms larger as no one knows what Uber has uncovered as part of its investigation.  While Uber may have been able to bob and weave in response to discovery served by Waymo before, it now has serious reporting responsibilities under oath to Judge Alsup under this very broad Order.  If it finds there were communications between Levandowski and others at Uber that are inconsistent with the representations Uber previously made to the Court, it could face a renewed effort by Waymo for a broader injunction or even find itself ensnared in the criminal referral.  I will keep you posted on further developments as they unfold.