Tesla has sued a former employee in Nevada federal court alleging theft of trade secrets. That employee – in turn – claims that he’s a whistleblower. Let’s take a look.
Martin Tripp joined Tesla’s Nevada operation as a process technician in October 2017. And apparently, Tripp was a problem from the jump. He complained that the role wasn’t “sufficiently senior” for his level of experience and expertise. According to his managers, Tripp was disruptive and combative with his colleagues. On approximately May 17th, 2018, as a result of these personality issues, Tesla reassigned Tripp to a different role. But that didn’t help – because Tripp was angry over the reassignment. In retaliation, Tripp allegedly hatched a plan to steal Tesla’s trade secrets.
Tesla does not allege how or when they figured out that Tripp was supposedly stealing trade secrets. But somehow they did. On June 14th and 15th, investigators for the Company interviewed Tripp regarding this alleged theft of trade secrets. According to Tesla, Tripp originally denied any wrongdoing, But when confronted with Tesla’s evidence, Tripp allegedly admitted to writing software that hacked certain Tesla systems and transferred Tesla data outside of the Company. Tripp allegedly installed this hacking software on multiple computers and systems within the Company.
Naturally, Tesla claims that the stolen materials implicate Tesla’s trade secrets. But the Company provides little insight into what those trade secrets are. All of Tesla’s allegations about the nature of the alleged trade secrets are generic, boilerplate references to methods, processes, programs, techniques, etc. The trade secret counts easily could be dismissed for failure to state a claim, because Tesla does not identify what specific trade secrets have supposedly been stolen. It looks like Tesla is just riding on its name and reputation. You know: “We don’t have to actually follow the rules and plead a real claim for theft of trade secrets. We can just say someone stole our trade secrets and you have to take our word. Because we’re Tesla. Of course we have trade secrets.” And of course Tesla does. But the Complaint simply does not tell us what trade secrets allegedly were stolen.
Interestingly, however, the Complaint doesn’t just allege that Tripp stole information. It alleges that Tripp doctored the stolen information to portray Tesla in a bad light. This is where the plot thickens. Although Tripp has not filed a response to the lawsuit, Tripp has talked to the media. And in his comments to the media, Tripp has portrayed himself as a whistleblower. According to Tripp, he was collecting data to go public about Tesla using damaged batteries in its Model 3 cars, Tesla storing excessive amounts of scrap metal in a dangerous fashion, and Tesla inflating its product numbers.
So apparently, Tripp has some information, data, or documents that make Tesla look dirty. If the documents are real, it’s a problem for Tesla. So Tesla comes out swinging, sues for theft of trade secrets, and preemptively attacks the authenticity of any yet-to-be-leaked documents that could portray Tesla in a negative light. The reality is that Tripp probably doesn’t have the resources to litigate against Tesla. Tesla has Jackson Lewis out of Las Vegas as their local counsel and Los Angeles-based powerhouse Hueston Hennigan as their lead counsel. Tesla will bury Tripp in paper unless Tripp is already tied to a well-capitalized Tesla rival that wants to back him. I doubt the case goes any serious distance. But if it does, the big-ticket item is going to be forensics. What, if anything, did Tripp steal? And for the damaging documents Tripp has, are they real or fake?
If Tripp has real dirt on Tesla (i.e. authentic documents that show Tesla breaking the law), and the resources to fight, then the case could set up a fantastic conflict between trade secret protection and whistleblower immunity under the Defend Trade Secrets Act. As many folks know, the DTSA’s whistleblower immunity only applies (1) when the disclosure is made in confidence to the government or an attorney for the sole purpose of reporting or investigating a suspected violation of law and (2) when the disclosure is made in a complaint or other document filed under seal in a judicial proceeding. We’ll have to wait and see.
Jonathan Pollard is a competition lawyer based in Fort Lauderdale, Florida. He focuses on complex non-compete, trade secret, trademark and unfair competition disputes. His office can be reached at 954-332-2380.
