Ephemeral Technology Used to Evade Discovery Upends Uber Trade Secret Theft Case
In Waymo LLC v. Uber Technologies, Inc., Dist. Court, (N.D. Cal. 2017), a December trial date was put on hold after the disclosure of an inflammatory letter written by the attorney of one of Uber’s former employees.
Plaintiff Richard Jacobs (“Jacobs”) served as Uber’s Manager of Global Intelligence from March 14, 2016, until he was demoted on February 14, 2017, for raising objections to and refusing to participate in what he believed was unlawful activity. He was terminated on April 14, 2017.
An attorney representing Jacobs wrote a 37-page letter in May of 2017 and mailed it to Angela Padilla (“Padilla”), the HR lawyer at Uber. Padilla sent the letter to attorneys on-staff at Uber, but not to the counsel of record in the Waymo case. The letter alleged extensive activities at Uber designed to prevent future discovery of evidence in the form of emails and communications. The alleged activity included mandatory use of ephemeral applications which would automatically delete communication and messages shortly after sent or received. Jacobs had been hired at Uber because of his background with the US Military. He was supposed to be helping to build and scale an intelligence program.
According to the letter, which was sent by Jacobs’ attorney to Uber in lieu of a meeting, Jacobs’ direct supervisors directed the use of ephemeral and encrypted communications software, including WickrMe to communicate sensitive information. Wickr Inc. is a San Francisco-based company that describes its product as a communications platform designed to empower greater control over data security using multi layers of peer-to-peer encryption. Uber implemented this program of ephemeral and encrypted communications for the express purpose of destroying evidence of illegal or unethical practices to avoid discovery in actual or potential litigation. The Wickr application uses encryption which prevents the information from being viewed by anyone except the intended recipient and programs messages to self-destruct in a matter of seconds to no longer than six days. Consequently, Uber employees cannot be compelled to produce records of their chat conversations because no record is retained.
Jacobs was also instructed to conceal documents by attempting to “shroud” them with attorney-client privilege or work product protections. Given the ongoing criminal and allegedly fraudulent activities within Uber, communications in furtherance of these schemes would be fair game in discovery. Uber’s attempt to pre-emptively conceal them under attorney-client privilege was, according to the Jacobs letter, illegal, unethical, and improper.
The Special Master examined the Court’s orders, comparing the Jacobs Letter. Under the May 2017 Order, Uber was required to 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. The Jacobs E-mail and Jacobs Letter both were in Uber’s possession by the time of this Order but not produced at that time. The Jacobs Letter makes broad assertions that Uber was allegedly engaged in coordinated efforts to steal competitors’ trade secrets. It also states that Uber extensively and purposefully used ephemeral software as a preemptive measure to avoid discovery requests now and in the future.
The use of ephemeral software such as Wickr and Telegram is already wide-spread. Companies have an obligation to preserve records that may be reasonably seen as relevant to litigation or that fall under data retention rules set by industry regulators. The intersection between that obligation and ephemeral technology has not been extensively explored by the judiciary. The Northern District of California’s decision will be heavily watched for that reason, with many businesses mindful of its far reaching implications.