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22 August 2022Sarah Speight

Tesla trade secrets case moves to arbitration

EV maker accuses former engineer of lying on CV | Secrets relate to AI supercomputer named ‘Dojo’.

A former Tesla engineer has lost his bid to keep a dispute with his former employer in court.

Alexander Yatskov was hired in January this year as a thermal engineer to work on Tesla’s advanced supercomputer for artificial intelligence (AI), named Dojo.

By early May, Tesla sued Yatskov for the “illicit retention of trade secrets” and “refusing” to return confidential information belonging to the firm, instead providing a “dummy” computer for investigation.

After a hearing last Thursday, August 18, US District Judge James Donato ordered that the case should go to arbitration after Tesla had claimed that Yatskov was bound by an arbitration clause from his employment agreement with the company.

The former employee had requested that the case remains in court so that he could publicly defend “public and humiliating claims that irreparably damaged” his reputation.

In an opposition filed in July, Yatskov and his attorneys argued that Tesla had “waived its right to arbitration through its conduct”. “The right to arbitration, like other contractual rights, can be waived.”

“Now that Tesla has dragged Dr Yatskov’s name through the mud, Tesla wants to hide this dispute in private arbitration and deprive Dr Yatskov of the opportunity to clear his name publicly,” said the defence. “Tesla cannot have it both ways.”

Judge Donato rejected this plea and stayed the case in the US District Court, Northern District of California (San Jose Division), directing the parties to advise the court on material developments.

Tesla: ‘lies on CV’

Yatskov was appointed by Tesla to “help address the technological challenges that come from designing and running a complex, custom supercomputer”. But Tesla said it soon realised he had “lied” on his CV about his work history and expertise.

“His work communications became erratic,” said Tesla in the court complaint. “He was repeatedly unable to complete tasks he was hired for and provided incoherent answers when pressed for explanations.”

Tesla argued that Yatskov had, in his short time at Tesla, “already demonstrated a track record of lying and then lying again by providing a ‘dummy’ device to try and cover his tracks”.

WIPR has contacted attorneys for both Tesla and Yatskov for comment.

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