Tesla is under pressure from Democratic Party leadership who claim the automaker is hiding complaints from workers and customers.
The case stems from the inclusion of “arbitration clauses” in Tesla’s contracts with workers and customers.
An arbitration clause consists of any form of agreement between the parties that indicates that certain disputes will be resolved by an arbitrator rather than through a civil court.
There are many reasons why someone would prefer arbitration because the procedures are often faster, less expensive, and more private than those in court. Tesla uses arbitration clauses in employee and customer contracts. Over the past year, these items have been raised as an issue.
Last summer, we reported on a former Tesla employee who was accused by the automaker of stealing information about the Dojo supercomputer. Tesla sued the worker in court, made some serious public accusations against him, which he denied, and then moved to settle the dispute in arbitration—effectively barring the worker from defending himself against the claims.
Now, seven senators, including such well-known Democratic leaders as Elizabeth Warren, Bernie Sanders, Richard Blumenthal and Edward J. Markey, have sent a letter to Elon Musk to pressure Tesla to stop including arbitration clauses.
They wrote in the letter:
We are incredibly disturbed to report Tesla’s use of enforceable arbitration clauses in consumer and employee contracts. Such rulings deny consumers their right to bring claims to court and protect Tesla from public scrutiny and accountability. Several recent reports and lawsuits have described a culture of “intense and pervasive harassment” faced by workers at Tesla, and on February 15, the National Highway Traffic Safety Administration (NHTSA) found that Tesla’s fully self-driving beta program could “violate local traffic.” laws or customs” and increase the risk of a vehicle collision. 1 We are deeply concerned that the arbitration agreements you impose on your workers and consumers have kept these deplorable and discriminatory conditions and potential safety flaws out of the public eye and the regulatory authorities’ limited ability to protect Tesla customers and employees and hold Tesla publicly accountable.
They believe Tesla uses this tactic to hide complaints from employees and customers. These senators are asking Tesla to disclose how many complaints it has received from both and to commit to stop using arbitration clauses in its contracts.
Here is the full message:
Normally, this is where we’d add a response from Tesla about these claims, but Tesla doesn’t have a PR department to request a response.
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