Thursday 21 September 2017

Uber sacking costs self-drive executive a $250m payday

Anthony Levandowski was fired after failing to comply with a court order
Anthony Levandowski was fired after failing to comply with a court order

Anders Melin and Mark Bergen

Anthony Levandowski lost both his job at Uber Technologies and a potential $250m payday.

Levandowski, 37, was fired on Tuesday, after failing to comply with a court order to hand over documents at the centre of a court wrangle over the alleged theft of self-driving car technology.

He had received 5.31 million shares when he was hired in August.

The grant was set to vest based on his continued service and achievement of performance milestones.

However, high-flyer Levandowski was employed 'at-will' (a US employment contract which means staff can be fired at any time without a reason) and none of the shares had vested when he left, according to an Uber executive.

"Such awards are really intended for retention, and when an employee's services are no longer needed, those awards are typically lost under at-will employment," said Shane Tucker, a partner at Vinson & Elkins focused on executive compensation.

The sacking caps Levandowski's brief and dramatic stint at the taxi-hailing juggernaut which had acquired his company Otto, an autonomous trucking startup he formed after leaving Alphabet's self-driving vehicle unit Waymo last year.

Many technology companies, including Apple, Alphabet and Facebook, typically don't enter into employment contracts with senior executives. That means unvested shares are generally forfeited.

If Levandowski had an employment contract, Uber could have been forced to cash him out of the award if he was let go without cause - meaning he didn't breach any of the terms in the contract or behaved in a way that would be grounds for a termination. A separation following a breach by the employee would typically result in a termination for good reason, which often causes unvested equity awards to be forfeited.

Uber had hoped Levandowski, one the most respected self-driving engineers in Silicon Valley, would help the ride services company catch up with rivals including Waymo, in the race for self-driving technology. Instead the hiring led to a court fight and the threat of criminal charges. Uber replaced him as the head of its self-driving car unit in April before finally making the decision to fire him.

Waymo claims he stole trade secrets by downloading more than 14,000 documents before he left. Levandowski is not a defendant, but his actions are at the heart of Alphabet's lawsuit against Uber.

Uber said in a letter to Levandowski filed in federal court that it was firing him because he had not complied with a court order to hand over the documents. He has declined to cooperate, citing his Fifth Amendment right not to incriminate himself. His lawyer did not immediately respond to a request for comment.

Uber and Alphabet are battling over tech expected to revolutionise the way people use cars. Waymo claims its trade secrets made their way into Uber's Lidar technology, which bounces light pulses off objects so self-driving cars can "see" the road. Uber denies these claims.

Levandowski has 20 days to comply with the court orders, according to the Uber letter.

Last month, Uber named Eric Meyhofer as Levandowski's replacement as head of its Advanced Technologies Group. "Over the last few months Uber has provided significant evidence to the court to demonstrate that our self-driving technology has been built independently," Angela Padilla, Uber's associate general counsel for employment and litigation, wrote in an email to employees, cited by the 'New York Times'.

An spokeswoman said Uber, which has never denied that he took the Waymo documents, has urged Levandowski to "fully cooperate".

Uber has been hit by a string of departures of senior executives and other negative news. (Bloomberg)

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