A contractual indemnification agreement with Google may end up costing Uber $179 million when Uber purchased a company allegedly formed using stolen trade secrets.
Anthony Levandowski was one of the founding members of a group at Google that was researching and implementing a self-driving vehicle project. Then he left Google and created a self-driving truck startup, naming it Otto. Uber acquired Levandowski’s company for $580 million in stock. Google then sued. It turns out Levandowski stole trade secrets from Google before he left and allegedly shared those secrets with Uber.
So what does all of this have to do with medical law?
When Uber acquired Levandowski’s company, the parties signed a contract. Uber agreed to a broad indemnification agreement in which Uber agreed to pay for any claims Google might bring against Levandowski. In March 2019, an arbitration panel awarded Google a $127 million judgment against Levandowski. The judgment has since ballooned to $179 million. Because of the contractual indemnification agreement, Uber may now be forced to pay Google $179 million.
Think indemnification in your employment contract is no big deal? That’s what Uber probably thought.
Don’t sign indemnification agreements. Doing so could result in financial suicide.
Want to learn more about indemnification? Read more articles I have written on indemnification here.
Need help with medical contract issues? Contact me. I’d be happy to try to help.