Seven U.S. senators raised concerns about Tesla Inc.’s use of compulsory arbitration terms in consumer and employee contracts on Monday, claiming that these agreements bar consumers and employees from filing lawsuits for consumer safety and discrimination.
Democratic Senator Richard Blumenthal is one of the writers of the letter to Tesla CEO Elon Musk, which lists multiple incidences of alleged racial and sexual harassment as well as criticisms about Tesla’s cars and its Full Self-Driving Beta software.
“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 letter, which was also signed by senators Bernie Sanders, Elizabeth Warren, Edward Markey, Jeff Merkley, Dick Durbin and Sherrod B. Tesla did not respond right away.
A Black former employee of Tesla won a racial harassment case against the electric car manufacturer this month, and a San Francisco jury ordered Tesla to pay him around $3.2 million. This amount is much less than the $15 million he turned down last year in favor of a fresh trial.
According to Tesla, the company does not allow workplace discrimination and takes employee grievances seriously.
Similar allegations of condoning racial discrimination at the EV manufacturer’s Fremont, California, facility and other locations are now the subject of a class action lawsuit by Black employees, a different lawsuit brought by a California civil rights agency, and other individual worker lawsuits. In such situations, the corporation has denied any wrongdoing.
The senators referenced an NHTSA investigation into claims of “phantom braking” in Tesla cars, which is now continuing. By June 8, the senators wanted answers to specific inquiries they had regarding Tesla’s use of forced arbitration.
Arbitration provisions, according to the senators, “may obscure potential safety flaws and limit the ability of regulatory authorities to safeguard Tesla customers and employees and hold Tesla publicly accountable.”
