Tesla’s arbitration agreements allow the company to evade public scrutiny & accountability for workplace discrimination & safety complaints

Washington (May 8, 2023) – Senator Edward J. Markey (D-Mass.) joined Senator Richard Blumenthal (D-Conn.), who led a group of six senators, in a letter to Tesla questioning the company’s use of forced arbitration clauses in employee and consumer contracts. Tesla’s use of these agreements prevents workers and consumers from bringing discrimination claims and consumer safety complaints to court – effectively shielding the company from both accountability and public scrutiny. Joining Senators Markey and Blumenthal in sending today’s letter were Senators Elizabeth Warren (D-Mass.), Jeff Merkley (D-Ore.), Dick Durbin (D-Ill.), Bernie Sanders (I-Vt.), and Sherrod Brown (D-Ohio).

“We are deeply concerned that the arbitration agreements you impose on your workers and consumers have kept these reportedly deplorable and discriminatory conditions and potential safety flaws from the public eye and limited regulatory authorities’ ability to protect Tesla customers and employees and hold Tesla publicly accountable,” the members wrote in the letter to Tesla Chief Executive Officer and Product Architect Elon Musk.

Numerous incidents of racial and sexual harassment have been reported at Tesla, including verbal slurs, graffiti in the workplace, Black employees being disproportionately disciplined and demoted, and female employees facing pervasive and egregious instances of sexual misconduct. At Tesla’s Fremont factory last year, workers brought five times the number of discrimination lawsuits than employees at comparable plants. The letter stresses that these reports “raise significant concerns about not only Tesla management’s complicity and participation in the discriminatory conditions, but also the untold number of other complaints that remain confidential” due to the arbitration agreements.

The letter also details the troubling history of safety complaints about Tesla’s vehicles and its Full Self-Driving Beta software, which caused the recall of over 360,000 vehicles recently. Because of various software and hardware issues with Tesla’s vehicles, drivers have reported instances of vehicles running yellow lights and stop signs, disobeying speed limits and lane markings, exhibiting unexpected “phantom” braking, and even steering wheels falling off during operation. The senators wrote that, “Consumer arbitration agreements have placed a black box around any concerns drivers may have on the safety of Tesla’s vehicles,” and that, “The public deserves the full record of safety complaints about Tesla vehicles.” 

The lawmakers concluded their letter with a detailed list of questions about the company’s past, present, and future use of these harmful employee and consumer contracts.

“With limited visibility into the labor conditions at Tesla, the safety of Tesla’s vehicles, and the fairness of the arbitration proceedings, we – and the public – are restricted in our ability to ensure that American workers and consumers retain the ability to protect their rights and hold firms like Tesla accountable,” the letter concluded. 

The full text of the letter can be found HERE.

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