Tesla Leaders Free for Now of Shareholder ‘Toxic Workplace’ Suit

Tesla Inc. investors can’t proceed with a lawsuit against CEO Elon Musk and other directors and officers alleging they fostered a “toxic workplace culture,” a federal court has ruled.

The shareholders, suing on behalf of Tesla, failed to show that they were excused from first making a demand that the company’s board take legal action, Judge David Alan Ezra said in an opinion docketed Monday in the US District Court for the Western District of Texas. The dismissal on those grounds wraps in a conclusion that at least some of the defendants aren’t likely liable.

But the investors may attempt ...