Tesla wins arbitration order in trade secret case against ex-engineer

The logo of car manufacturer Tesla appears at a branch office in Bern, Switzerland, October 28, 2020. REUTERS/Arnd Wegmann

Register now to get free unlimited access to Reuters.com

  • Alexander Yatskov asked for his name to be publicly acquitted
  • The judge said that the arbitration clause in the work agreement applies

(Reuters) – A federal judge in San Francisco has referred a dispute between Tesla and its former engineer Alexander Yatskov to special arbitration, rejecting Yatskov’s plea to keep the case in court so he can publicly challenge Tesla’s “insulting” allegations.

US District Judge James Donato has ordered arbitration in the case after a hearing Thursday. Tesla argued that Yatskov was bound by an arbitration clause from his business agreement with the company.

Yatskoff’s attorney John Kirk of Donahue Fitzgerald said Friday that the company “will continue to do whatever is necessary to clear Dr. Yatskoff’s name, whether in open court or private arbitration.”

Register now to get free unlimited access to Reuters.com

Tesla’s lawyers did not immediately respond to a request for comment on Friday.

Tesla sued Yatskov in May for allegedly obtaining confidential information about his Dojo AI training supercomputer and storing it on his personal computer. The lawsuit also alleged that Yatskov provided a “fake” computer to Tesla to investigate “covering up its tracks.”

Yatskov said that Tesla filed the lawsuit during his last working day there, and that he handed over all of the company’s materials after leaving. The court was asked to dismiss Tesla’s claims regarding trade secrets.

Yatskov also opposed Tesla’s request to arbitrate the case. He said the company’s “humiliating” allegations had “irreparably damaged” his reputation and asked to defend against it at a public hearing instead.

Yatskov’s proposal said Tesla had already lost out in its attempt to obtain a temporary restraining order, and Tesla wanted “to protect its future failures and Dr. Yatskoff’s victories from the public eye”.

He said Tesla had waived its right to arbitrate by pursuing the case in court.

“Now that Tesla has dragged Dr. Yatskoff’s name into the mud, Tesla wants to hide this dispute in private arbitration and deny Dr. Yatskoff the opportunity to publicly clear his name,” he said. “Tesla can’t be both ways.”

But Donato agreed with Tesla that the case should be arbitrated. Tesla described its lawsuit as a request for an “emergency injunction to maintain the status quo,” a type of filing it said the arbitration clause specifically authorized.

The case is Tesla Inc v. Yatskov, US District Court for the Northern District of California, No. 3: 22-cv-02725.

For Tesla: Sean Gates of Charisse Lakes, Joseph Alm of Tesla

Liatskopf: John Kirk Donahoe Fitzgerald

Register now to get free unlimited access to Reuters.com

Our Standards: Thomson Reuters Trust Principles.

Blake Brittain

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights, and trade secrets. You can reach him at [email protected]

Leave a Reply

%d bloggers like this: