X Corp Accuses Former Engineer of Massive Code Theft

A newly filed federal action in the Northern District of California centers on allegations that a former engineering manager misappropriated millions of lines of proprietary source code during the transition period following Elon Musk’s acquisition of the social media platform now known as X. According to the complaint, the engineer, hired in 2010 and later responsible for infrastructure optimization, allegedly extracted approximately 6 million lines of internal code and later used it to establish a competing technology venture.

The lawsuit contends that the data at issue included tools developed to optimize platform performance at scale. The filing characterizes these assets as “highly specialized” and critical to the company’s operational efficiency and competitive standing.

Termination and Alleged Conduct

The complaint outlines the circumstances that led to the engineer’s November 2022 termination, which followed the company’s shift away from remote work. Public posts made around the same time referenced internal policy changes, including a communication from leadership stating that refusal to return to the office could be treated as a voluntary resignation. The filing describes one such post urging employees not to resign, asserting, “You gain literally nothing out of resignation.”

The lawsuit asserts that the termination stemmed from violations of managerial conduct standards rather than the employee’s operational responsibilities. It also claims the engineer anticipated the termination and used it to elevate her public profile ahead of launching a new enterprise.

Discovery of the Alleged Code Exfiltration

The company reports that it did not become aware of the alleged code exfiltration until nearly two years later. According to the complaint, a former supervisor contacted the company in October 2024 with concerns that the engineer had openly discussed taking proprietary code to support her new venture.

The supervisor allegedly also reported unusual post-termination communications in which the engineer attempted to classify certain internal materials as open-source. A forensic review of her account activity followed, ultimately identifying the large-scale download of source code cited in the lawsuit. As stated in the complaint, “Yue’s looting of X Corp. capitalized on the shift in ownership and management resulting from Elon Musk’s acquisition of Twitter just weeks earlier.”

Trade Secret Claims and Competitive Implications

At the heart of the lawsuit are trade secret allegations tied to performance optimization tools used to manage large-scale infrastructure demands. The complaint asserts that these tools contribute directly to the platform’s stability, speed, and resource efficiency.

The filing argues that the alleged misappropriation provided the engineer’s new company with immediate commercial advantages by enabling it to offer services mirroring X’s proprietary capabilities. The lawsuit describes these assets as foundational to X’s market position, stating they are essential to enabling the platform “to operate at scale with maximum efficiency and minimal resource expenditure.”

Administrative Proceedings and Current Posture

Before the lawsuit, the engineer contested her termination before the National Labor Relations Board. The NLRB dismissed the challenge on the basis that she held a supervisory role and therefore was not protected under the relevant labor classifications. The complaint notes that she had argued she no longer met the supervisory criteria following organizational restructuring.

The civil action now seeks judicial resolution of the trade secret, employment, and competitive harm claims.

Case Details

Case Name: X Corp. v. Yue et al.
Court Name: U.S. District Court for the Northern District of California
Case Number: 4:25-cv-10423
Plaintiff Attorney(s): Zweiback Fiset & Zalduendo LLP