Ninth Circuit denies relief to TikTok whistleblower

PHOENIX (CN) — The Ninth Circuit declined to vacate a sanction order against a whistleblower who claimed TikTok’s parent company, ByteDance, stole content and shared data with the Chinese Communist Party.

A lower court dismissed Yintao Yu’s 2023 wrongful termination lawsuit after finding he fabricated evidence and lied under oath, sanctioning and ordering him to abide by the contracts he says he never signed and enter arbitration over his termination.

In an unpublished memorandum posted Thursday, a Ninth Circuit panel dismissed Yu’s appeal.

“Plaintiff rendered his appeal moot by initiating and proceeding with arbitration, for example, by working to select an arbitrator and participating in an ongoing arbitration proceeding for over a year,” the panel wrote. “As a result of plaintiff’s actions, we would be unable to grant any effectual relief to plaintiff, should he prevail on appeal.”

ByteDance claims Yu signed four different agreements that required he go through arbitration to challenge adverse employment actions. Yu said his signatures on those documents were forged and offered an anonymous witness declaration claiming to have witnessed Yu sign a key document that would have aided his claim.

At an evidentiary hearing in October 2024, it was revealed that the anonymous witness never saw the declaration attributed to her name and never witnessed Yu sign any documents. U.S. District Judge Susan Illston dismissed the claims and sanctioned Yu in December 2024.

“That dispute no longer exists because plaintiff submitted all his claims to arbitration and has continued to participate in arbitration,” the panel wrote.

At oral arguments on April 16, both parties argued the case isn’t moot. Yu said he needs the sanction order to be vacated because, as long as it stands, ByteDance can use it as leverage in a $6 million countersuit it plans to file against Yu, claiming malicious prosecution. He said he’s entitled to the annulment of any “collateral consequences” stemming from the order to enter arbitration because Yu already did so willingly.

ByteDance agreed the case is not moot because the lower court granted judgment on ByteDance’s counterclaims regarding the different agreements Yu signed.

The judges didn’t agree with either argument.

Though the case is now moot, the panel agreed the mootness does not invalidate the previous sanction order.

“The case was not moot when the district court entered its order, because plaintiff’s mere demand for arbitration days before the District Court entered its order, without his later substantial participation, did not waive clearly his objection to arbitration.”

Yu also argued his claims should never have been removed to federal court from California state court. He asked the Ninth Circuit for remand to the San Francisco County Superior Court, but the panel didn’t reach that question in its analysis.

Yu began working for ByteDance in 2017 but was fired in 2018 as part of a 16-person layoff, according to ByteDance. Yu, however, says he was fired for blowing the whistle on ByteDance’s unethical and illegal practices, claiming the Chinese Communist Party influenced TikTok to spread anti-Japanese sentiment and suppress content about pro-democracy protests in Hong Kong.

ByteDance has denied these accusations.

Neither side replied to a request for comment.

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