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Tesla Taps Walmart Ethics, Compliance Chief for New Legal Role

March 23, 2021, 10:17 PM

Tesla Inc., which has faced accusations of lax in-house legal management, has hired a new compliance leader from Walmart Inc.

David Searle, a former federal prosecutor who joined Walmart in 2019, became deputy general counsel and senior director of compliance at Tesla last month, according to his LinkedIn profile.

Reached last week at Tesla via email, Searle confirmed he joined the upstart automaker though declined to discuss details. He spent nearly the past two years as international chief ethics and compliance officer at Walmart, which in recent months made changes to its compliance personnel.

Searle’s move to Tesla comes as his new employer grapples with a recently unsealed lawsuit accusing it of refusing to hire law department leaders willing to stand up to the company’s voluble co-founder and CEO, Elon Musk.

The lawsuit, filed March 8 against Tesla in Delaware Chancery Court by investor Chase Gharrity, alleges that the Palo Alto, Calif.-based company and its board have “consistently failed to ensure that Tesla has an independent general counsel who can provide advice untainted by Musk.”

Tesla, which as of late last year no longer has a media or public relations department, didn’t respond to requests for comment about the lawsuit or Searle.

Alan Prescott, a former lawyer at Ford Motor Co. and Uber Technologies Inc. whose LinkedIn profile identifies him as Tesla’s vice president of legal and acting general counsel, a role he’s held since last year, didn’t respond to a request for comment.

A Walmart spokeswoman confirmed that Searle left Feb. 12 and that his wife, Julie Searle, remains employed by the company.

Julie Searle, who like her husband also graduated from the Duke University School of Law and once worked at the U.S. attorney’s office in Houston, joined Walmart in 2019 as a senior director for U.S. ethics and compliance.

Searle, prior to joining Walmart that same year, served as a deputy general counsel and chief compliance officer at Bristow Group Inc. The former Baker Botts associate previously held in-house roles at Nexeo Solutions LLC and Baker Hughes Inc., which like Bristow operate in the oil and gas sector.

Compliance Questions

Gharrity’s complaint cites the departure of three different Tesla legal chiefs in 2019.

It also claims that Musk frequently meddled “with the general counsel’s activities” and that he violated the terms of a 2019 settlement with the Securities and Exchange Commission, which mandated that Tesla hire a so-called Twitter sitter to monitor its CEO’s social media forays.

Bloomberg Law reported last year on the rotating cast of lawyers that have taken over Tesla’s top legal chair, one held by Prescott since the December 2019 exit of former general counsel Jonathan Chang. Todd Maron, Musk’s former personal divorce lawyer, spent over five years as Tesla’s top lawyer before leaving in late 2018.

Three members of Tesla’s board—Ira Ehrenpreis, Antonio Gracias, and Kathleen Wilson-Thompson—have legal backgrounds.

Last summer Tesla posted a job listing for a senior compliance counsel who will “be comfortable in an entrepreneurial, fast-paced environment, able to effectively interact with, influence, and collaborate with other members of the organization,” as noted by Today’s General Counsel.

In-House Hiring

Searle’s recruitment, first reported Monday by Law360, comes as Tesla appears to be reshaping its in-house legal and compliance staff.

A jobs portal on Tesla’s website showed openings in mid-March for more than a dozen in-house lawyer positions in California and Austin, Texas, as well as overseas outposts in Amsterdam, Berlin, Oslo, Shanghai, Taipei, and Tokyo.

The signature block on Searle’s Tesla email indicated that he’s based in Texas.

In December, Musk said that Tesla and other entities he’s affiliated with—including Space Exploration Technologies Corp., which has built a launchpad near the Gulf of Mexico—will relocate some of their operations to the Lone Star State. Bloomberg News reported this month that a Tesla subsidiary is building a 100-megawatt energy storage facility outside Houston.

Still, despite spats with California officials, Tesla hasn’t completely turned its back on the Golden State.

Telsa hired former Hyundai Motor America counsel Kevin Jay in January as a Fremont, Calif.-based corporate counsel for litigation, according to his LinkedIn profile and registration with the State Bar of California.

Similar records show that within the past year, Tesla has brought on managing counsel Keith Porapaiboon, corporate employment counsel Eric Ortiz, and regulatory managing counsel Elizabeth Mykytiuk, from Akzo Nobel NV, DLA Piper, and Volkswagen of America Inc., respectively. Mykytiuk works out of Washington, while Ortiz and Porapaiboon are based in California.

Searle, a former college golfer at Stanford University, where in the late 1990s he joined a men’s team that had just lost legendary player Tiger Woods, is one of at least 10 deputy general counsel at Tesla.

In August, Tesla promoted former associate general counsel Candace Jackman, Dinna Eskin, John “J.T.” Boone III, and Samir Boufadiss to be deputy general counsel for various business segments and geographic regions.

Former Tesla deputy general counsel Jonathan Butler left the company last year to become legal chief at Lucid Motors Inc., a competitor that’s preparing to go public.

Tesla, which faced scrutiny last year for its treatment of workers in California at the start of the coronavirus pandemic, also elevated former associate general counsel for compliance and head of North American human resources Valerie Capers Workman in July to be its vice president of people.

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

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

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