Daily Labor Report®

Tesla Can Arbitrate Whistleblower’s Retaliation Claim (1)

Dec. 12, 2018, 7:29 PMUpdated: Dec. 12, 2018, 9:41 PM

Tesla Inc. can force arbitration in a dispute by a former employee who claims he was demoted and ultimately fired for blowing the whistle on the company’s “illegal” business practices.

A federal judge granted the electric car-maker’s motion to compel arbitration Dec. 11, saying the arbitration agreement in the worker’s employment contract covered this dispute.

The worker said the arbitration agreement was ambiguous, pointing to language preserving his right to file administrative charges with government agencies like the Equal Employment Opportunity Commission. But that language wasn’t relevant to this lawsuit, which was based on New Jersey’s Conscientious Employee Protection Act, the judge said.

Tesla has long required employees to sign arbitration agreements as a condition of being hired.

The worker said he was fired after discovering Tesla had a practice of selling “lemons” without proper disclosure and hiding “high-dollar, pre-delivery damage repairs” from consumers. He told his supervisors this was illegal and, in response, was demoted twice and then fired, he claims.

Judge Joseph H. Rodriguez of the U.S. District Court for the District of New Jersey wrote the decision.

Law Offices of Eric A. Shore PC represented the former employee. Littler Mendelson PC represented Tesla.

The case is Williams v. Tesla, Inc., 2018 BL 458034, D.N.J., No. 1:18-cv-04120-JHR-AMD, 12/11/18.

--with assistance from Dana Hull (Bloomberg News)

(Updated with additional reporting.)

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; C. Reilly Larson at rlarson@bloomberglaw.com

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