The US Supreme Court has declined to hear Elon Musk’s appeal regarding his agreement with the Securities and Exchange Commission (SEC) over his social media posts. Musk’s request to have an in-house lawyer pre-approve his Twitter activity concerning Tesla Inc. has been left intact.

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Background

The legal battle stems from Musk’s infamous tweet in August 2018, where he claimed to have “funding secured” to take Tesla private, resulting in a surge in Tesla’s stock value. The SEC subsequently sued Musk, alleging that the tweet misled shareholders. Musk settled with the SEC, agreeing to step down as Tesla chairman and pay a $20 million fine.

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Recent Developments

In 2021, Musk reignited the conflict by posting a Twitter poll about selling 10% of his stock. This led the SEC to issue subpoenas to Musk and Tesla. Musk then sought to annul his pre-screening agreement, arguing that it infringed upon his free speech rights. However, a federal appeals court rejected his claims last year.

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Legal Arguments

Musk’s legal team contended that the pre-approval requirement constituted an unconstitutional prior restraint on his speech. They argued that the provision continues to inhibit Musk’s ability to freely communicate with the public.

In response, the SEC maintained that parties involved in litigation can waive fundamental constitutional rights, urging the Supreme Court to dismiss Musk’s appeal without further review.

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Conclusion

With the Supreme Court’s decision, Musk’s agreement with the SEC remains in force, requiring him to obtain pre-approval for his social media posts about Tesla. The case underscores the complexities surrounding the intersection of free speech rights and regulatory oversight in the digital age.

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Identifying the Victim

While the court documents discreetly refer to the aggrieved party as a prominent electric vehicle manufacturer, additional details align unmistakably with Tesla. This identification was further confirmed by an informed source, underlining the gravity of the allegations against the accused for pilfering proprietary technology related to battery assembly lines.

The Accused and Their Actions

The narrative unfolds with the accused exploiting Tesla’s confidential battery production technology to kickstart their venture in China. Among the indicted is Klaus Pflugbeil, a Canadian national, apprehended in Nassau County, New York. His arrest followed an attempted transaction of the stolen technology to undercover operatives posing as businessmen from Long Island, as disclosed by the Justice Department.

Pflugbeil’s counterpart, Yilong Shao, a Chinese citizen, is currently evading capture.

Government’s Stance on Intellectual Property Theft

Matthew Olsen, the head of the DOJ’s national security division, condemned the unauthorized extraction of advanced trade secrets, emphasizing the repercussions on America’s technological forefront and its economic and national security interests. This case is part of broader efforts by a DOJ and Commerce Department initiative aimed at safeguarding critical US technology from foreign adversaries, further highlighted by the recent apprehension of a former engineer accused of stealing Google’s AI trade secrets.

Legal Proceedings and Implications

During his initial court appearance, Pflugbeil was ordered detained by US Magistrate Judge Peggy Kuo, pending a follow-up hearing. The lack of a plea from Pflugbeil at this juncture adds to the case’s complexity. Representing the government in this legal battle was Assistant US Attorney Ellen Sise, who, alongside her team, refrained from commenting on the ongoing case.

The backdrop to Pflugbeil’s involvement includes his tenure as president of a Canadian battery manufacturer, subsequently acquired by the electric vehicle giant in question in October 2019, the same month Tesla acquired Hibar Systems, a specialist in high-speed EV battery production.

The Undercover Operation

The unfolding of this espionage saga saw undercover agents engaging with Mr. Shao at a Las Vegas trade show, laying the groundwork for the sting operation that culminated in Pflugbeil’s arrest in New York. This proactive approach by US law enforcement underscores the determination to protect domestic innovation and competitiveness on the global stage, as articulated by Breon Peace, the U.S. attorney for the Eastern District of New York.

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The Equal Employment Opportunity Commission (EEOC), a U.S. anti-discrimination agency, has submitted a filing urging a federal judge to reject Tesla Inc.’s request to halt a lawsuit addressing widespread racial bias allegations at its flagship Fremont, California, assembly plant.

EEOC Defends Lawsuit

In the filing presented in federal court in San Francisco, the EEOC refuted Tesla’s argument that its September lawsuit duplicates two other pending racial discrimination cases against the electric carmaker. The agency accused Tesla of filing a baseless motion aimed at diverting attention from the substantive allegations and serious racial issues allegedly prevailing at the Fremont facilities.

Allegations Against Tesla

The EEOC’s lawsuit, filed in September, contends that from 2015 to the present, Black workers at the Fremont plant have consistently experienced racial slurs and offensive graffiti, including swastikas and nooses, and faced retaliation for reporting such incidents.

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Previous Cases

The California Civil Rights Department filed a 2022 lawsuit accusing Tesla of tolerating similar discriminatory conditions and making biased decisions regarding pay, promotions, and work assignments for Black workers. Additionally, a proposed class action initiated by Tesla workers in 2017 alleges racial harassment.

Tesla’s Response and Appeals

Tesla, maintaining its innocence, did not immediately respond to the recent filing by the EEOC. The company is also appealing a $3.2 million award granted to a Black former elevator operator at the Fremont plant in a separate racial harassment lawsuit.

Tesla’s Motion Disputed

Last month, Tesla filed a motion to dismiss the EEOC lawsuit, asserting that the commission rushed to sue due to an interagency feud with the California agency. Tesla argued that the California case and the proposed class action should take precedence since they involve similar claims.

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EEOC’s Counterargument

In its recent filing, the EEOC countered Tesla’s motion by stating that its case is distinct as it alleges violations of federal workplace discrimination law, unlike the other cases in state court governed by California laws. The commission also disputed Tesla’s claim that it could not settle the claims before the lawsuit.

Ongoing Legal Battle

As the legal proceedings unfold, the EEOC continues to assert the gravity of the racial problems at Tesla’s Fremont facilities, emphasizing the need for a thorough examination of the allegations without delay. Tesla’s response to the EEOC’s recent filing and the overall legal battle surrounding racial bias allegations remain crucial aspects of this ongoing dispute.

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Elon Musk’s Tesla secures victory in a U.S. trial, vindicating its Autopilot system.

In a significant legal victory for Tesla (TSLA.O), a U.S. jury has ruled in favor of the electric vehicle manufacturer, dismissing allegations that its Autopilot driver assistance feature was responsible for a fatal accident. This triumph comes at a pivotal time as Tesla faces multiple other lawsuits and federal investigations concerning the same technology.

Tesla’s Legal Triumph

This courtroom win marks the second legal success for Tesla in 2023. Earlier this year, juries found no evidence of software defects in Tesla’s vehicles, a key aspect of the cases involving its Autopilot system. Tesla has been actively testing and rolling out its Autopilot and Full Self-Driving (FSD) system, which CEO Elon Musk has emphasized as vital to the company’s future. However, these innovations have also attracted regulatory and legal scrutiny.

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The Responsibility Debate

This verdict underscores a fundamental aspect of Tesla’s arguments – the ultimate responsibility in cases of accidents involving Autopilot rests with the drivers. The civil lawsuit, initially filed in Riverside County Superior Court, alleged that the Autopilot system caused Micah Lee’s Model 3 to suddenly veer off a highway near Los Angeles, leading to a fatal crash.

The incident resulted in the tragic death of Micah Lee and serious injuries to his two passengers, including an 8-year-old boy who suffered severe injuries. The plaintiffs had sought $400 million in damages, along with punitive damages.

Tesla’s Defense

Tesla denied liability, contending that Lee had consumed alcohol before driving and that it was unclear whether the Autopilot system was engaged at the time of the accident. During the trial, the jury was presented with gruesome details of the injuries sustained by the passengers.

The Jury’s Verdict

The 12-member jury ultimately concluded that the vehicle did not have a manufacturing defect, delivering a 9-3 vote in favor of Tesla. While the verdict is a win for Tesla, Jonathan Michaels, an attorney for the plaintiffs, expressed disappointment, suggesting that it still leaves a shadow of uncertainty.

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Tesla welcomed the verdict, asserting that its vehicles are well-designed and contribute to road safety. The company contends that the jury’s decision was the correct one.

Previous Legal Victory

In a prior trial in Los Angeles in April, Tesla had similarly argued that its technology required human monitoring, despite the names “Autopilot” and “Full Self-Driving.” In that case, the jury attributed an accident involving a Model S to driver distraction rather than a defect in Tesla’s technology.

Public Perception and Legal Implications

Legal experts and observers note that these verdicts indicate that juries continue to place a strong emphasis on the presence of a human driver as the ultimate responsible party when accidents occur. However, the Riverside case involved unique steering issues, making the legal landscape complex.

In other lawsuits against Tesla, plaintiffs have alleged that the Autopilot system is defectively designed, leading to misuse by drivers. In the Riverside case, the focus was primarily on whether a manufacturing defect influenced the steering.

Regulatory and Safety Concerns Persist

Tesla remains under scrutiny on multiple fronts, with the U.S. Department of Justice conducting a criminal probe into claims that Tesla’s vehicles can operate autonomously. Furthermore, the National Highway Traffic Safety Administration is investigating the performance of Autopilot after identifying several accidents where Tesla vehicles struck stationary emergency vehicles.

While disclaimers Tesla provides in its vehicles may offer legal protections, some experts argue that regulatory intervention may be necessary to address these concerns comprehensively. Sam Abuelsamid, an analyst at Guidehouse Insights, asserts that addressing the issue of autonomous driving safety should become a priority for regulators.

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In a significant development, the U.S. Justice Department has thrown its weight behind Tesla in the electric car manufacturer’s ongoing legal battle against the Louisiana Automobile Dealers Association, Louisiana Motor Vehicle Commission members, and a group of dealers. Tesla alleges these entities conspired to limit competition through Louisiana’s ban on direct-to-consumer automobile sales. The case, which Tesla appealed after its initial dismissal in June, has taken a new turn with the Justice Department’s involvement.

Antitrust Law Misinterpretation

The Justice Department filed a “friend of the court” brief to the New Orleans-based 5th U.S. Circuit Court of Appeals, asserting that the trial court judge in Tesla’s case had misinterpreted antitrust law in her ruling to dismiss the case. The government’s filing, echoing Tesla’s recent submission, argued that U.S. District Judge Sarah Vance incorrectly held that Tesla was obligated to demonstrate that members of Louisiana’s motor vehicle commission had the intent to restrain market competition.

Importantly, the Justice Department emphasized that it was not taking sides by supporting Tesla, nor did it express any opinion on the “proper disposition” of the appeal.

Absence of Intent Requirement in U.S. Civil Antitrust Law

In its submission, the Justice Department and Tesla’s legal team underscored that U.S. civil antitrust law does not necessitate proving intent. They contended that introducing such a requirement would “improperly” restrict antitrust law.

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Tesla’s Unique Direct-to-Consumer Model

Tesla stands out as one of the few car companies selling their vehicles directly to consumers and not relying on independent franchises for sales and service.

Ruling and Tesla’s Allegations

Judge Vance’s ruling against Tesla argued that the state’s ban on direct sales applied universally to all vehicle manufacturers and that Tesla had not presented any evidence of anti-Tesla bias within the Louisiana Legislature. Tesla countered in its appeal, alleging that Louisiana car dealers had collectively engaged in baseless investigations and harassment to drive Tesla out of the state.

Future Proceedings

The appeals court has not yet scheduled a date for oral arguments.

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Past Settlement in a Similar Dispute

In a related development, in 2020, Tesla settled with the state of Michigan, allowing Michigan residents to purchase lawfully and service Tesla vehicles within the state.

The case is titled “Tesla v. Louisiana Automobile Dealers Association et al.,” before the 5th U.S. Circuit Court of Appeals under case number 23-30480.

For Tesla, legal representation is provided by Ari Holtzblatt of Wilmer Cutler Pickering Hale and Dorr and Mark Beebe of Adams and Reese.

The Louisiana Automobile Dealers’ legal team includes Paul Clement of Clement & Murphy.

Matthew Mandelberg of the U.S. Justice Department handles the amicus brief on behalf of the United States.

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In a legal battle that has captured the corporate world’s attention, Tesla Inc. is strongly pushing to dismiss a staggering $230 million legal fee request by a team of shareholder attorneys who secured a settlement in a contentious dispute related to director compensation. The electric vehicle giant is adamant that this request constitutes an “unwarranted windfall,” with an hourly rate that ranks among the highest ever witnessed in Delaware’s Court of Chancery – a renowned arena for shareholder-related litigation.

Tesla’s Stand: Advocating for a $64 Million Fee

Tesla’s firm stance on this matter is clear: the company urges Chief Judge Kathaleen McCormick, who presides over the court, to approve a legal fee no greater than $64 million. This stark contrast in the proposed fee has set the stage for a legal showdown, with implications extending far beyond this particular case’s boundaries.

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The Origin of the Dispute: Director Compensation

At the heart of this legal dispute lies the compensation of Tesla’s directors from 2017 to 2020. The shareholder attorneys represented a Detroit police union pension plan that raised concerns about what they deemed excessive director pay. Notably, most of the directors’ compensation consisted of stock options, and they were only compensated if Tesla’s stock value saw substantial growth, which it indeed did, multiplying tenfold in recent years.

Notable Exclusion: Elon Musk’s Compensation

It’s essential to underline Elon Musk’s formidable $56 billion in compensation as Tesla’s Chief Executive was not part of this lawsuit. A separate legal challenge is underway concerning Musk’s compensation package.

The Settlement and Its Fallout

The lawsuit, initiated in 2020, was settled in July. The directors agreed to return $735 million to Tesla, forming part of a comprehensive $919 million agreement. The directors maintained that their compensation was equitable, and they only agreed to settle to eliminate the looming risk of prolonged litigation.

The Attorney’s Demands: 25% of the Settlement

The attorneys representing the Detroit police union pension plan are now seeking a fee equivalent to 25% of the settlement involving the twelve directors, among whom are high-profile figures such as James Murdoch, son of media magnate Rupert Murdoch, and Larry Ellison, co-founder of Oracle. This case, known as a “derivative lawsuit,” directly benefits the company rather than individual shareholders.

Tesla’s Counterargument: Discrepancy in Valuation

Tesla is steadfast in its claim that the shareholder attorneys have artificially inflated the value of the settlement and, consequently, the requested legal fee. Their assertion is grounded in the argument that the value has been pegged to the cost incurred by the directors rather than the benefit derived by the company. According to Tesla, their net gain from the agreement stands at $295 million.

The Crux: Dissecting Stock Options

The main point of contention revolves around the valuation of stock options. At the time of the July settlement, the directors deemed these options worth approximately $458 million. Tesla, however, emphasizes that the benefit of reclaiming these options lies not in exercising them but in reversing the accounting costs recorded when they were initially issued, which amounted to approximately $20 million.

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Musk’s Non-Involvement and Compensation

An important note is that Elon Musk is not participating in this settlement, and he has not received any compensation for his role on the board, as confirmed by a court filing submitted by the plaintiff.

This legal battle between Tesla and the shareholder attorneys over legal fees promises to be a precedent-setting case that will shape the landscape of future disputes involving corporate governance and director compensation. The outcome will be closely watched by the involved parties and by corporate entities, legal practitioners, and the broader business community.

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Elon Musk, the prominent billionaire known for his leadership in various high-profile companies, is entangled in a web of legal disputes across his business empire. These legal challenges encompass multiple issues, from securities regulations to employment discrimination lawsuits. In this article, we provide an in-depth look at the various legal entanglements that Musk and his companies face.

Twitter Lawsuits

SEC Lawsuit for Testimony

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk to compel the world’s richest man to testify as part of a probe into his $44 billion takeover of the social media giant Twitter. This legal action is a significant development in the ongoing investigation, with the court filing dated October 5, 2023.

Investor Lawsuit Against Musk

In May 2022, investors in Twitter took legal action against Musk, alleging that he manipulated the company’s stock price by failing to disclose his acquisition of shares in the platform, now known as “X.”

Trademark Infringement Lawsuit

On October 2, 2023, Twitter’s new name, “X,” faced a lawsuit in federal court in Florida. A legal marketing company claimed the social media firm’s new name infringed upon its trademark, which incorporated the letter “X.”

$56 Billion Tesla Compensation Lawsuit

A significant legal battle surrounds Musk’s compensation at Tesla. A ruling is expected soon following a non-jury trial. This lawsuit questions the validity of Musk’s $56 billion pay package at the electric carmaker. The problem featured closing arguments in February, during which a judge probed lawyers for Tesla directors and an investor challenging Musk’s pay regarding the company’s explosive growth and allegations of misleading disclosures about the pay plan 2018.

Employment Disputes

Musk’s major companies, including Tesla, SpaceX, and the X social media platform, are embroiled in several employment discrimination lawsuits.

SpaceX Discrimination Lawsuits

SpaceX faced a proposed class action lawsuit in October. A former female employee alleged that the company promoted women and minorities less frequently than white men. Additionally, the U.S. Justice Department filed a lawsuit against SpaceX in August, accusing the company of discrimination against asylum recipients and refugees during its hiring process.

X Employment Disputes

X is contending with multiple lawsuits alleging sex, age, and disability discrimination stemming from layoffs in the previous year. Two cases claim that the company owes laid-off employees a minimum of $500 million severance pay.

Tesla Workplace Harassment and Discrimination Lawsuits

Tesla and Musk are defending numerous allegations of workplace harassment and discrimination, including lawsuits filed by California’s Department of Civil Rights and a federal civil rights agency. In April, a federal jury in San Francisco ordered Tesla to pay $3.2 million to a Black elevator operator who won a racial harassment lawsuit. Tesla has publicly stated that it does not tolerate discrimination and has taken measures to address workers’ complaints.

Lawsuits Sparked by Musk’s Tweets

Elon Musk’s tweets on the social media platform he now owns have frequently sparked controversy and legal trouble.

Violation of Labor Law

In March, a U.S. appeals court upheld a decision by the U.S. National Labor Relations Board, stating that Musk violated federal labor law by tweeting that Tesla employees would lose stock options if they joined a union. The court is currently reconsidering this ruling.

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Misleading Investors

In February, a U.S. jury found Musk and Tesla not liable for misleading investors when Musk tweeted in 2018 that he had “funding secured” to take the electric car company private. This tweet led to allegations of securities fraud by the U.S. SEC and a 2018 settlement in which Musk stepped down as Tesla chairman, paid fines, and agreed to seek legal approval for some of his tweets before posting them. Musk is currently seeking U.S. Supreme Court intervention to challenge the SEC’s authority to enforce this consent decree, which he has called a “muzzle” on his free speech. As part of the settlement, a federal judge announced in September the creation of a “fair fund” to provide a $41.53 million payout to investors who incurred losses due to Musk’s tweet.

Investigations into Tesla’s Driver Assistance Features

Tesla is facing a criminal investigation in the United States regarding claims that its electric vehicles can operate autonomously. Additionally, Tesla is confronting a lawsuit alleging that its Autopilot system contributed to a fatal crash of a Tesla Model 3, resulting in one fatality and injuries to two other passengers. An attorney for Tesla argued in the first U.S. trial over these allegations that the crash resulted from “a classic human error.” Earlier in April, Tesla won a bellwether trial in Los Angeles related to a Tesla crash involving its Autopilot feature. Tesla’s strategy in the prosecution emphasized that the company informed drivers that its technology required human monitoring despite the “Autopilot” name.

Musk’s Corporate Perks and Vehicle Driving Range Claims

Federal prosecutors in New York have initiated an investigation related to Elon Musk’s corporate perks and claims regarding vehicle driving range. The investigation’s focus includes matters about corporate conduct and vehicle performance. The Wall Street Journal first reported on this probe, which adds to the legal challenges Musk is currently facing.

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Trump’s Lawsuit Against X

On October 4, 2023, a lawyer representing former U.S. President Donald Trump sought to revive a lawsuit claiming that the social media platform X violated his and other users’ free-speech rights when it suspended their accounts. This case, previously dismissed, has been highlighted, highlighting the legal complexities surrounding social media platforms and free speech issues.

In conclusion, Elon Musk’s legal entanglements are diverse and extensive, reflecting the challenges a prominent figure faces in various high-stakes industries faces. These legal battles encompass securities regulations, employment discrimination, corporate compensation, and even the consequences of Musk’s social media presence. As these cases unfold, they will continue to shape the legal landscape surrounding Musk and his companies.

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In the wake of their successful lawsuit against Tesla’s directors for alleged overpayment, a legal team is now vying for substantial compensation. The lawyers are pursuing a fee of $229 million, equivalent to $10,690 per hour, as disclosed in a filing on September 8th in Delaware’s Court of Chancery.

One of the Largest Fee Awards in Shareholder Lawsuit History

This proposed fee would rank among the highest ever awarded in a shareholder lawsuit against a corporate board if approved. The substantial sum is intended to be distributed among lawyers from four firms that dedicated several years to building a case against Tesla’s director compensation spanning from 2017 to 2020.

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Legal Fee and Settlement Await Delaware Judge’s Approval

The legal fee and the settlement are pending approval by a Delaware judge, with a hearing scheduled for October. In the settlement, the 12 director defendants, including prominent figures like James Murdoch and Larry Ellison, have agreed to return $735 million in compensation, forgoing an additional potential $184 million. Furthermore, the settlement mandates overhauling the board’s approach to determining director pay. The settlement funds will ultimately benefit Tesla shareholders indirectly, as this case falls under the category of a derivative lawsuit.

Estimating the Total Settlement Value and Fees

The law firms involved in the case estimate the total settlement value at $919 million and are seeking a 25% fee based on this amount. Additionally, they are requesting around $1 million to cover expenses.

Dedicated Legal Teams Accumulate Significant Hours

Partners and staff from the law firms of Bleichmar Fonti & Auld and Fields Kupka & Shukurov, headquartered in New York, billed more than 10,000 hours during the lawsuit. McCarter & English attorneys and staff based in Wilmington, Delaware, and Ronald King, an attorney with the Clark Hill firm in Lansing, Michigan, also contributed hundreds of hours to the case.

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Evaluating Fee Requests in the Legal System

The court is responsible for assessing fee requests, considering the need to reward risk-taking and effort while avoiding disproportionate windfalls that could undermine trust in the legal system. David Paige, founder of Legal Fee Advisors, a consulting firm, noted that comparing lawyers’ bills across different contingency-fee cases can be challenging. However, he described the Tesla plaintiffs’ fee request as “extraordinary” compared to typical hourly rates, which cost around $2,000 for elite corporate attorneys. Paige emphasized that the court will ultimately weigh the fee’s size against the litigation’s benefits.

Directors Expected to Challenge Fee Request

While Tesla’s directors have not yet objected to the fee request, it is anticipated that they will do so, according to a court filing by the plaintiffs’ lawyers. Attorneys representing the directors have not provided comments on the matter.

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Supervisors at a Tesla service center in Orlando, Florida, violated US labor law by preventing workers from discussing pay and other working conditions and making complaints to higher-level managers, according to a ruling issued on Tuesday by National Labor Relations Board (NLRB) Administrative Law Judge Michael Rosas. The judge found that the company illegally silenced employees in 2021 after some complained that new hires were receiving higher pay than existing workers. The decision is the latest in a series of losses for Tesla before the labor board as the company faces lawsuits alleging widespread race and sex discrimination at its assembly plants.

According to the ruling, several workers at the Orlando repair shop became aware in late 2021 that new hires were being paid more than existing staff. A technician who complained to a Tesla vice president about the disparity had his complaint forwarded to the head of human resources. However, supervisors at the service center then held a meeting where they told employees not to discuss their pay or other working conditions or to file complaints with higher-level managers. The technician who had complained was subsequently fired.

The technician filed a complaint against Tesla with the NLRB last year, leading to Tuesday’s ruling. The judge ordered Tesla to stop violating workers’ rights, post notice of the violations in the service center, and email it to employees.

Tesla had argued that it had quickly repudiated the managers’ comments by posting a notice in the service center that company policy allowed workers to discuss their pay. However, the judge said that attempting to silence employees violated their fundamental right under US labor law to band together to advocate for better working conditions.

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The decision came about a month after a US appeals court upheld an NLRB ruling that Tesla CEO Elon Musk broke the law by tweeting that employees would lose stock options if they joined a union. The company is also appealing an NLRB decision that said it unlawfully barred factory workers from wearing union t-shirts.

Tesla has denied wrongdoing in the race discrimination and sexual harassment lawsuits it is currently facing. Most of these cases involve its flagship assembly plant in Fremont, California.

Tesla’s legal struggles have not stopped the company from making significant strides in the electric vehicle market. In 2021, the company delivered over 936,000 electric vehicles, surpassing its previous record of 499,550 vehicles delivered in 2020. The company’s success has been driven in part by the popularity of its Model 3 and Model Y vehicles, which have become two of the best-selling electric cars in the world.

Tesla’s success has also drawn criticism from some quarters, with some analysts and activists arguing that the company’s success is partly due to government subsidies and tax breaks. Others have accused the company of mistreating workers and failing to live up to its promises regarding workplace safety and fair labor practices.

Tesla has been the subject of several high-profile controversies in recent years, including a fatal crash involving one of its self-driving cars in 2016 and Musk’s tweet about taking the company private in 2018, which led to lawsuits from shareholders and regulators. Despite these challenges, the company has continued to grow and expand, with plans to build new factories in Texas and Germany and to launch several new electric vehicles in the coming years.

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Tesla is facing a class action lawsuit filed by a California-based Tesla owner for an alleged privacy breach. The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses Tesla of violating customers’ privacy by allowing employees to access and share invasive videos and images recorded by customers’ car cameras between 2019 and 2022.

The lawsuit was filed by Henry Yeh, a San Francisco resident who owns a Tesla Model Y. Yeh alleges that Tesla employees accessed these videos and images for their “tasteless and tortious entertainment” and “the humiliation of those surreptitiously recorded.” Yeh’s attorney, Jack Fitzgerald, stated that Yeh was outraged at the idea that Tesla’s cameras could be used to violate his family’s privacy, which the California Constitution scrupulously protects. Fitzgerald also stated that Tesla needs to be held accountable for these invasions and for misrepresenting its lax privacy practices to him and other Tesla owners.

The lawsuit claims that Tesla’s conduct is “particularly egregious” and “highly offensive.” Yeh is filing the complaint against himself, similarly-situated class members, and the general public. The prospective class would include individuals who owned or leased a Tesla within the past four years. The lawsuit asks the court to “enjoin Tesla from engaging in its wrongful behavior, including violating the privacy of customers and others, and to recover actual and punitive damages.”

Reuters reported Thursday that groups of Tesla employees privately shared invasive videos and images recorded by customers’ car cameras between 2019 and 2022. The images reportedly included customers “doing laundry and intimate things” and their children. A former employee cited by Reuters claimed that such behavior was widespread and not limited to a few individuals.

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Tesla has not yet responded to Reuters’ request for comment on the lawsuit. The lawsuit highlights the growing concerns around data privacy in the tech industry. With increasing amounts of data being collected and shared, companies must prioritize protecting the privacy of their customers. The lawsuit against Tesla shows that customers are increasingly aware of their privacy rights and are willing to take legal action to protect them.

The lawsuit also highlights the potential risks of having cameras installed in cars. While cameras can be helpful for safety and security purposes, they also raise privacy concerns. Customers may not be aware that their movements are being recorded, and if this data is not secured correctly, it can be accessed by unauthorized individuals.

The lawsuit’s outcome will likely significantly affect Tesla and the broader tech industry. If the court finds Tesla guilty of violating customer privacy, it could lead to a substantial settlement and changes in Tesla’s data collection and storage practices. It could also lead to greater scrutiny of other tech companies’ data privacy practices and increased pressure to strengthen data privacy laws.

In conclusion, the lawsuit against Tesla highlights the importance of data privacy and the risks associated with invasive data collection practices. Companies must prioritize protecting their customers’ privacy and be transparent about their data collection practices. The lawsuit’s outcome will be closely watched by consumers, regulators, and the tech industry.

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