Huawei says whistle-blower’s accusation it ordered staff to spy at US telecoms event is ‘completely groundless’

PUBLISHED : Monday, 16 July, 2018, 1:37pm
UPDATED : Thursday, 19 July, 2018, 10:44am

Huawei Technologies has refuted a claim by a former employee who said he was directed by the company to infiltrate industry meetings at the headquarters of Facebook to steal rivals’ trade secrets.

Jesse Hong, a former software architect for Huawei subsidiary Futurewei Technologies in Santa Clara, California, filed a lawsuit against the world’s largest telecommunications equipment provider, alleging that it directed Hong and two other employees to register for an annual TIP Summit using fake US-company names as Huawei was not permitted to attend the event in 2017.

Hong, who worked for the Huawei subsidiary in the US since 2014 until he was fired in March this year, is seeking US$105 million in damages from Huawei as he claims he was fired for raising concerns about the company’s activities. He is suing Huawei for whistle-blower retaliation, racial discrimination, harassment and unfair competition.

The allegations in the lawsuit arose from a labour dispute and are “completely groundless”, the company said in an email statement, adding that it will vigorously defend the company’s interests.

A media inquiry sent to Jesse Hong on his LinkedIn account had not received a reply at the time of publication.

The Chinese company has maintained some of its operations in the US despite numerous business setbacks in the country. Huawei claimed recently that the US government’s “unfounded allegations” over security concerns have cost American consumers US$20 billion in lost savings from the country’s development of mobile networks because its lower cost products have been kept out of the US market.

US carrier AT&T walked away from a smartphone distribution deal with Huawei in January this year, while the Federal Communications Commission (FCC) has put Huawei and its Chinese rival ZTE Corp on a list of companies banned from selling equipment or services to US carriers under a government-subsidised programme.

US House backs defence budget of US$675 billion and ZTE and Huawei ban

“Compliance with local laws and regulations, as well as international conventions, is key to Huawei’s operational compliance worldwide. Every employee is expected to adhere to applicable laws, regulations, and business ethics in the countries where we operate. These requirements are clearly set out in Huawei’s Employee Business Conduct Guidelines as a condition of ongoing employment,” said the Huawei statement issued on Monday.

Facebook, which hosted the TIP Summit for the telecommunications industry at its headquarters in Menlo Park on November 1, 2017, banned Huawei from attending private meetings it had organised with other companies, many of which were Huawei’s competitors, Hong claimed in the lawsuit.

Hong said he believed that faking company identity to attend the closed-door meetings “was illegal and fraudulent” and he refused to comply, while the two other Huawei employees went ahead, according to the court document.

Huawei’s US staff also prepared a TIP Summit report, including TIP competitors’ integration plans, and transferred that information to product teams in China, according to Hong.

Hong, who was told on March 15 this year he was being “laid off”, said he had requested a transfer to another department within the company in November last year, after the TIP Summit, but the request was denied without explanation in December.

The court documents also showed that Hong received a “C” rating – generally perceived as “underperform” inside the company – at his half-year review conducted by his manager Sean Chen in August 2017. Chen had instructed Hong and two other employees to register for the Facebook event by using fake US company names, the documents showed.