Tesla, Salespeople Get Court OK for $1M Work Break Settlement

Tesla Inc. received preliminary court approval to pay $1 million to settle a lawsuit alleging it underpaid car salespeople.

An estimated 253 salespeople would get payouts under the settlement. They were required to work through breaks mandated by state law, and Tesla failed to pay overtime by improperly claiming an exemption for workers who earn commissions, according to the lawsuit.

Magistrate Judge Jacqueline Scott Corley said the settlement was a fair and reasonable resolution of the claims when she granted preliminary approval Sept. 26. Class members will have an opportunity to object or opt out, and Corley will consider how many, if any, do so when she decides whether to grant final approval.

Tesla is engaged separately in a trial before a National Labor Relations Board administrative law judge. A group of workers, backed by the United Auto Workers, alleged that the company restricted organizing activity in a way that violates their rights under federal labor law.

The case is Wilson v. Tesla Inc., 2018 BL 350255, N.D. Cal., No. 3:17-cv-03763, preliminary settlement approval 9/26/18.