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Tesla Cycles Through Top Lawyers While Musk Spars With SEC (1)

March 8, 2022, 4:09 PMUpdated: March 8, 2022, 8:50 PM

Tesla Inc. named its third new legal chief in two years, as the company promoted David Searle to be acting head of legal and corporate secretary.

Searle takes the role after being hired a little over a year ago as Tesla’s head of compliance. Tesla welcomed him aboard from Walmart Inc., where Searle spent almost two years, having been hired to be the Bentonville, Ark.-based retailer’s international chief ethics and compliance officer.

A source familiar with the matter confirmed that Searle is now the interim head of Tesla’s legal group. Searle updated his LinkedIn profile Monday to reflect his new titles and indicated he took on those positions in October. He didn’t respond to several requests for comment left for him in recent days.

Tesla, which does not have a public relations team, didn’t respond to a request for comment sent to the company via an email address for press inquiries listed on its website. Another inquiry sent to an email address for the office of the company’s chief executive officer, billionaire Elon Musk, was not returned.

Musk and the SEC continue to spar over the 2018 agreement that he claims stifles his free speech. Musk is asking a federal judge to end the SEC’s oversight of his Twitter account, which Musk has used to do things like attack the regulator, talk about his company, and interact with followers, Bloomberg News reported Tuesday.

Searle succeeds William Berry, a longtime in-house lawyer at Alphabet Inc.’s Google who served as Tesla vice president of legal for several months last year. Berry replaced former acting general counsel and corporate secretary Alan Prescott, who left in early 2021 after more than a year on the job.

Berry, whose LinkedIn profile shows he left Tesla in December, also didn’t respond to requests for comment. Berry joined Tesla in late 2020 and initially served as the electric automaker’s head of litigation before being promoted to replace Prescott.

Fifth Departure

Berry’s exit made him the fifth top lawyer to leave Tesla in three years. Musk, the company’s voluble leader, has cycled through a half-dozen legal chiefs in a decade.

Prescott is now chief legal officer at Luminar Technologies Inc., a company specializing in laser sensor technology for the autonomous vehicle industry. Bloomberg Law reported Monday on Prescott receiving a nearly $30 million total compensation package to leave Tesla last year for Luminar.

Searle’s LinkedIn profile shows he’s based in Austin, Texas, where Tesla relocated its headquarters as of Dec. 1, following spats between Musk and California regulators.

The former federal prosecutor previously served as an interim general counsel and compliance chief for the Bristow Group Inc., a helicopter fleet operator that provides services to the offshore oil and gas sector. Searle’s wife, Julie, is a fellow ex-federal prosecutor who was a senior director for U.S. ethics and compliance at Walmart.

Julie Searle left that company shortly after her husband was hired by Tesla to join Norton Rose Fulbright as a litigation partner in Austin and Houston.

Legal Group Changes

Investor Chase Gharrity has cited Tesla’s legal leadership changes in a derivative lawsuit he filed against the company and its board over the terms of Musk’s 2018 securities fraud settlement with the Securities and Exchange Commission.

Gharrity’s complaint accused Tesla and its board of failing to ensure the company had an “independent general counsel who can provide advice untainted by Musk.”

Musk, whose official position at Tesla is CEO and “technoking,” has long resisted adopting traditional C-suite titles. The company’s top in-house lawyers have not all held the role of full-time general counsel, either also serving as vice presidents of legal or running the law department on an acting or interim basis.

Tesla’s longest-serving legal chief was Todd Maron, who was once Musk’s personal divorce lawyer. Maron left Tesla in 2018 after nearly five years as its top lawyer.

Tesla hired Williams & Connolly litigation partner Dane Butswinskas to succeed Maron, but he stepped down after just two months.

Butswinskas was succeeded as general counsel by Jonathan Chang, who left Tesla in 2019 to take a similar job at SambaNova Systems Inc., an artificial intelligence startup. Prescott was promoted to replace Chang in late 2019.

In-House Exodus

Other Tesla lawyers beyond those in the role of legal chief have also been moving on from the company.

In January, Tesla’s top Black executive, attorney and former human resources head Valerie Capers Workman, left to become legal chief for Stryder Corp., a career placement startup doing business as Handshake recently valued at $3.5 billion.

Workman’s exit came shortly before California’s civil rights regulator sued Tesla over allegations of “pervasive racism” against Black factory workers.

Workman didn’t respond to a request for comment, nor did Candice Petty, a Tesla lawyer promoted in November to deputy general counsel and director of human resources compliance.

Deputy general counsel for litigation Candace Jackman and deputy general counsel for employment and immigration M. Yusuf Mohamed also left Tesla in December, according to their LinkedIn profiles. Neither responded to requests for comment.

Mohamed, who joined Tesla in 2014 after working in-house at a chicken processor, wrote on his LinkedIn profile that he’s currently taking a sabbatical. Jackman is a former Cooley associate who was hired by Tesla in 2016.

Musk and Cooley

Tesla and Cooley made news in January when the Wall Street Journal reported that Musk had sought to have the law firm fire an associate who investigated him while working at the Securities and Exchange Commission. Musk threatened to take away Cooley’s business unless it terminated the associate.

Cooley declined to discuss the matter and the associate, who remains with the firm after it refused Musk’s alleged demands, didn’t respond to a request for comment.

January also saw Tesla managing counsel for regulatory Elizabeth Mykytiuk become an associate general counsel for product and regulatory at Zoox Inc., the self-driving unit of Amazon.com Inc.

Mykytiuk, a former senior trial attorney at the National Highway Traffic Safety Administration’s Office of Chief Counsel, didn’t respond to a request for comment.

Matthew Yun Huh, another former deputy general counsel at Tesla, left the company last July to take a similar job at SambaNova Systems Inc., an artificial intelligence startup. SambaNova in 2019 hired its legal chief Jonathan Chang from Tesla, where he had been general counsel. Huh also didn’t respond to a request for comment.

Tesla saw another longtime deputy general counsel for litigation and regulatory, Lynn Miller, leave last June to become general counsel for PlusAI Inc., a newly public self-driving truck startup. Miller’s exit came about a year after Tesla deputy general counsel Jonathan Butler left to become general counsel for Lucid Motors Inc., a Newark, Calif.-based electric vehicle rival led by a former Tesla executive.

Lawyer Openings

Tesla continues to keep a small army of outside lawyers busy with a robust litigation docket and ongoing battles with regulators, according to Bloomberg News. An online jobs board shows the company currently has openings for nearly a dozen lawyers.

Recent legal recruits include senior privacy counsel Theodore Kinch, hired last summer from the Gap Inc., and managing counsel for lead regulatory compliance Stephen Geist, a director of law and regulation at Allstate Corp. who had previously been legal chief at Esurance Insurance Services Inc.

CNBC reported in November on Tesla’s addition of managing counsel for litigation David Misler, a former federal prosecutor who most recently was a trial attorney with the SEC in Washington.

(Updates story throughout with detail on Tesla's legal team and related matters.)

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com