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The data breach is Uber's latest regulatory problem. Photo: Eric Gay / AP

In a second court hearing this week, Uber employees testified that a disgruntled former colleague, Richard Jacobs, attempted to extort money from the company when he sensed he was on the verge of getting fired. Jacobs made explosive allegations of misconduct by Uber in a letter he sent the company in May, which the Justice Department sent to the judge presiding over its dispute with Waymo last week.

The big question: As the presiding judge still wants to know, if Uber didn't find merit in the former employee's allegations that it was crossing legal and ethical lines and even believes he sought to extort a payout, then why did Uber agree to hire him as a consultant and pay him a hefty $4.5 million after the fact?

What's next: The trial has been delayed until early February.

More from today's hearing:

  • Angela Padilla, an in-house lawyer at Uber, testified that the former employee was caught exporting emails and other company documents, presumably as evidence for the claims he planned to make about Uber's practices. When confronted, he sent an email to executives with his claims and resigned.
  • According to Padilla, Uber agreed to settle with Jacobs to "take the air out" of his whistleblowing threats. Uber also decided to disclose the letter to the U.S. government after he threatened to do so.
  • "On the surface it looks like you covered it up," said the judge to Padilla. "To me it does not add up."
  • One employee, Mat Henley, testified that Uber's "non-attributable devices" were laptops, set up with temporary virtual machines (VMs) for certain security analysts to do research safely without their activities being tied to Uber's networks. According to him, this was critical to protect employees overseas when researching violent or criminal groups.
  • Henley testified that Jacobs was demoted because of poor work performance, but the company decided to fire him after he began stealing files.
  • He also admitted that Uber used to conduct surveillance on its competitors, but no longer does.
  • Another employee, Nick Gicinto, testified that he did not discuss Waymo or stealing its trade secrets during his trips to Pittsburgh to meet with the autonomous driving team.
  • "There's very little truth in that document," said Gicinto of Jacobs' letter about Uber's practices, adding that Jacobs never brought up any such concerns during his employment at Uber.

Go deeper

New York AG alleges "significant evidence" of Trump Organization fraud

Combination images of former President Trump and New York State Attorney General Letitia James. Photo: Al Drago/Bloomberg via Getty Images; Scott Heins/Getty Images

New York's attorney general filed a motion Tuesday seeking to compel former President Trump and two of his children, Donald Trump, Jr. and Ivanka Trump, to appear for sworn testimony in her office's civil investigation into the Trump Organization's financial dealings.

Why it matters: Attorney General Letitia James revealed new details in the court filing on her office's investigation into the Trump Organization's business practices, including a preliminary finding alleging the Trump Organization used "fraudulent and misleading asset valuations to obtain economic benefits."

2 hours ago - Technology

Ex-N.Y. Post digital chief files lawsuit alleging sexual harassment

Richard B. Levine) (Photo by Richard Levine/Corbis via Getty Images

Former New York Post editor Michelle Gotthelf is suing her former employer, its parent company News Corp. and two editors, alleging she was reprimanded after complaining to senior executives that she was sexually harassed by retired N.Y. Post editor-in-chief Col Allan. The N.Y. Post issued a statement denying any wrongdoing.

Why it matters: "I felt that I owed it to myself and I owed it to the news organization and the people who answered to me," Gotthelf, who was a long time editor at the N.Y. Post, told Axios in an interview.

Updated 2 hours ago - Economy & Business

Airlines warn of flight cancellations amid 5G rollout concerns

Emirates SkyCargo airline Boeing 777F aircraft. Photo: Nicolas Economou/NurPhoto via Getty Images

Emirates and Delta airlines announced Tuesday that the planned rollout of 5G services at certain American airports could affect flights.

Driving the news: AT&T and Verizon announced earlier Tuesday that they would delay this week's scheduled rollout of 5G signals near a limited number of airports due to continued concerns from the aviation industry.