By Malathi Nayak | Bloomberg
A former Tesla Inc. engineer says that after the company dragged his reputation “through the mud” with a trade-secrets theft lawsuit, it’s now trying to prevent him from publicly clearing his name.
Alexander Yatskov was accused in May of duplicitously taking sensitive proprietary information about Tesla’s supercomputer technology when he left his job. He’s now fighting back against the company’s move to push the dispute into private arbitration, saying he wants to contest the “humiliating claims” in open court.
Tesla lost its initial request in court for an emergency order against Yatskov, but argues the matter belongs in arbitration under the terms of its standard employment contract.
The world’s most valuable automaker has been accused in the past of using closed-door arbitration proceedings to keep embarrassing allegations about racial discrimination and sex harassment at its main California factory out of the public eye.
A San Francisco federal judge is set to hear arguments Thursday on whether to put the Yatskov court case on hold while arbitration proceeds.
In this case, Tesla went on the offensive in a May 6 complaint alleging that Yatskov downloaded “extremely valuable” trade secrets about its supercomputer on his personal device and tried to cover up the theft before he left the company.
While the complaint said Tesla employees spent thousands of hours building the supercomputer to deal with massive amounts of data and solve difficult engineering problems, including driver autonomy, Chief Executive Officer Elon Musk told investors in a January earnings call that “Project Dojo” isn’t guaranteed to succeed.
“We’re not saying for sure, Dojo will succeed,” Musk said. “We think it will.”
Yatskov’s employment agreement has a mandatory arbitration clause, but allows either party to go to court to seek protection against the “immediate threat” of technology theft before arbitration, Tesla’s lawyers told the judge in a July filing.
The company’s attorneys said that after the suit was filed, the ex-engineer handed over the personal computer specifically sought by Tesla for a third-party forensic inspection and agreed not to disclose any proprietary material.
Yatskov’s lawyers countered that the company went against its own right to arbitrate by filing the suit and “cannot have it both ways.”
“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,” his lawyers said in a filing.
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