A former Tesla engineer who the company accused of stealing Dojo supercomputer secrets is now in a bizarre situation where he can’t defend himself as Tesla moves the case to arbitration.
Tesla has a clause in its employment contract that requires employees to settle workplace disputes by arbitration, an out-of-court method that relies on third-party decision-makers instead of courts.
The automaker has been known to aggressively sue employees, especially over handling of confidential information, like trade secrets, and then move to private arbitration – hiding the matter.
Shareholders have proposed to remove the arbitration clause for three years in a row at Tesla’s annual shareholder’s meeting, including earlier this month, but it was voted down by shareholders.
Now we get a clear example of the practice.
In May, we reported on Tesla filling a lawsuit against Alexander Yatskov, a recently hired engineer who Tesla claims stole trade secrets related to its Dojo supercomputer project.
Yatskov was hired as a thermal engineer, though Tesla claimed that he lied about his qualifications, and he was assigned to the Dojo project to work on a cooling system.
Project Dojo is a new supercomputer that Tesla is developing to help train its neural nets, which are primarily used in its self-driving effort.
Tesla claims that quickly after starting the job, Yatskov started downloading “confidential and tightly guarded” information related to the Dojo supercomputer project to his personal computer.
In the lawsuit, the company claims that Yatskov admitted to stealing the information when confronted about it. He was placed on administrative leave starting April 6, 2022, and asked to bring Tesla his personal laptop to recover the allegedly stolen information.
Tesla claims that the engineer brought the company a “dummy laptop” that was set up to make it look like he only accessed “inoffensive Tesla information, like an offer letter” and not trade secrets related to Dojo.
Yatskov ended up resigning from Tesla on May 2.
The engineer has maintained his innocence and now complains that Tesla is pushing to move the dispute to arbitration, which will result in him not being able to defend himself in court (via Bloomberg):
A former Tesla Inc. engineer said it was “humiliating” to be sued in open court for allegedly stealing trade secrets, only to be steered by the company into closed-door arbitration where he can’t defend himself publicly.
Yatskov’s lawyers wrote in a filing:
Now that Tesla has dragged Dr. Yatskov’s name through the mud, Tesla wants to hide this dispute in private arbitration.
Originally, Tesla was seeking “compensatory and exemplary damages and an order that would stop Yatskov from disseminating its trade secrets and direct him to return all proprietary data.”
But now according to the new report, Tesla is only seeking to recover the cost of its investigation.
The judge asked if Yatskov wanted his job back:
At the end of the day, maybe it’s just money. I mean, he doesn’t want his job back, does he?
His lawyer confirmed that he doesn’t.
It’s not the first time that Tesla is suing former employees over alleged stolen information.
Tesla is currently suing Rivian and former employees hired by the EV startup over allegedly stealing information related to its “next-gen battery.”
Previously, the company also sued a former employee who went to work at Xpeng after Tesla claimed that the engineer stole the Autopilot source code.
Finally, Tesla also won a lawsuit against self-driving startup Zoox for the theft of some proprietary information related to its logistics systems.
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