On Friday, July 19 Tesla whistleblower Karl Hansen filed a civil lawsuit in Nevada against Elon Musk, the company and others for violations of the Sarbanes Oxley Act, Intentional Interference with Business Relations, and Breach of Contract.
Hansen, a former Senior Investigator for the Federal Maritime Commission, states that he continues to provide investigative assistance to former colleagues, meaning that “whistleblower hell” may soon join “production hell” and “service hell” in the Tesla lexicon -- not just in reference to allegations of retaliation against whistleblowers, but in a ramp of whistleblower claims against the company.
Reached for comment, Mr. Hansen relayed:
“It’s taken a long time to get to this point, and I remain steadfast regardless of any monetary outcome. The only thing we are guaranteed to take to our graves is our name. I’ve spent a career of integrity, and won’t stand idly by when someone like Elon Musk runs roughshod over others because he happens to be a billionaire.”
Speaking to his experience in the ten months leading up to Friday’s lawsuit the military serviceman added:
“Even though this has been and continues to be one of the most wrenching experiences of my life, it’s important for people to do the right thing, even if it means doing it alone. If you stay in the arena long enough, even by yourself, people will notice that, and the right people are going to notice your courage, and will support you.”
(In reference to support, Hansen launched a GoFundMe campaign in June. The platform figures in two other Tesla developments from the past week. Twitter user Skabooshka, against whom Tesla dropped its request for a temporary restraining order on Friday, had benefited from a GoFundMe campaign to cover their legal costs. And two of the principal subjects of Lora Kolodny’s extensively-researched July 15 report on working conditions in Tesla’s open-air tent assembly line -- Maggie and Carlos Aranda -- have also launched a GoFundMe campaign.)
A Tesla representative was contacted for comment late on Friday but had not responded at time of publication. If the company chooses to respond to TheDrive.com, their response will be included.
From the lawsuit, Hansen’s claims include that Elon Musk, through Tesla, caused his subsequent employer to reassign him, and then eliminate his position, breaching his employment contract (Counts I and II).
At the risk of layman’s misinterpretation, the allegations appear similar to claims made to the National Labour Relations Board in June on behalf of employees at Tesla’s Buffalo factory, that the company interfered with ex-employees’ efforts to find work. Business Insider quotes the redacted lawsuit, in which the plaintiffs allege Tesla “intentionally interfered with efforts to seek employment with other employers in retaliation for outspoken union support.”
In Count III, Hansen further claims Musk and Tesla’s management actively concealed and participated in misconduct including spying on employees -- illegal surveillance is also alleged in the aforementioned Buffalo case -- improper contracts, and thefts being orchestrated by organized crime.
Paragraphs 16 through 19 of the lawsuit identify thefts ranging between $37 and $150 million dollars, along with links to a Mexican drug cartel. (Pablo Escobar’s brother recently demanded $100 million in cash or Tesla shares from Musk for purportedly stealing his flamethrower idea, but the Escobars are Colombian.)
In paragraph 22 Hansen alleges a Tesla employee was terminated after reporting the theft of $13,000 of copper wire to law enforcement, foreshadowing Hansen’s own termination from the company shortly after briefing management about his findings into criminal activities taking place (paragraph 23).
These cases of “firing the messenger” are troublingly similar to the claim of a former Tesla Director of Environment, Health, Safety and Sustainability that they were fired after reporting safety violations and an assembly line worker’s earlier claim that they were fired after reporting anti-gay harassment.
More recently, a lawsuit was filed in a Nevada District Court in June in which the plaintiff, a former Tesla employee, alleged a sexual assault took place on company premises; that they escalated the issue to no avail; and were later subject to retaliation from their supervisors. The lawsuit further alleges that after the plaintiff found Musk’s personal phone number and sent a text explaining what had happened to them at the workplace, they were terminated the next day.
While Tesla had provided responses for the above cases, the company had not yet responded to the June lawsuit. A company representative had been contacted in mid-June for comment, but was advised a week later of delays on the writer’s end, so their response could wait. Follow-up messages were sent on Monday and Wednesday of this week. (The publication of the Hansen lawsuit on Friday subsequently changed the content, publication and intended timeline of this planned article.) All of this said, it is understandable that Tesla’s communications team would be inundated with media requests, given Elon Musk’s far-ranging interests and star power.
Whistleblower retaliation figured in the high profile case of Martin Tripp; after Tesla identified him as the source for a Business Insider article, Tesla’s Security team gave police a tip that they’d received an anonymous call that Tripp was planning a mass shooting at the Nevada factory where he had worked. That evening, when police confronted the tearful, unarmed Tripp he expressed his terror of Musk; they concluded Tripp posed no threat, meaning he had been the victim of a ‘swatting’. Quoting from the above Bloomberg article,
“... as accounts by police, former employees, and documents produced by Tesla’s own internal investigation reveal, Musk set out to destroy [Tripp].”
Messenger retaliation also followed an April investigation by Reveal from The Centre for Investigative Reporting into Tesla workplace safety, claiming that Tesla had under-reported injuries, ostensibly to improve its safety statistics, which had come under fire. (As noted in paragraph seven of the article, Tesla did not respond to Reveal’s questions for the story.)
One of CIR’s sources alleges that shortly after their investigations, a complaint against her was lodged to the relevant Medical Board and an anonymous call was placed to state Child Protection Services claiming she neglected her children and that they needed to be placed in the care of the state. The source confided,
“I am not sure if knowing [what retaliation would come] that I would have made the same choice. I did not intend to risk everything in my life. I believed I could report it and someone would stop what was happening to the workers.”
On their own, each allegation is indelibly disturbing. The collective picture they paint is of a culture where the bearers of bad news are banished. And with Musk himself no mere micro-manager but a proudly self-professed nano-manager, it becomes challenging to argue that the culture took form without his taking notice, providing consent, or nodding approval.
An Exponential Ramp Worth Curbing
In light of Hansen’s disclosures of investigations on behalf of other whistleblowers, still more such lawsuits seem likely to surface. Indeed, recent years have brought an exponential increase not just in auto production but in legal filings against Musk, Tesla and its solar division, formerly called SolarCity. The chart below, dating to mid-June, comes from PlainSite.org.
It would be unfair to show Tesla’s legal dockets without also providing readers with context about other automakers. So here are links to PlainSite.org’s web pages of historical legal dockets for Ford Motor Company, General Motors, Toyota Motor North America and Volkswagen AG respectively.
At a glance many recent filings against Tesla appear to be claims of warranties not being honored or contractors not getting paid. One can hope that -- beyond the baked-in “whistleblower hell” coming from lawsuits based on Tesla’s alleged actions to date -- future suits can be limited to “mere” financial disputes such as these, or still more preferably settled before reaching the courts.
Tesla’s employees, suppliers, customers and many well wishers deserve nothing less than for the company to mature into an exemplar of ESG (environmental, social, governance) principles. While such a journey might require a cultural revolution, the reward of pursuing “ESG heaven” would allow the company to, in time, leave its “whistleblower hell” days behind.
NOTE: The day after this story had gone “to press,” we finally received this previously requested statement from Tesla spokesperson Gina Antonini:
“As we’ve said previously, Mr. Hansen’s position at Tesla’s Gigafactory in Nevada was eliminated in July of 2018 as part of a company-wide restructuring, which impacted our workforce globally. Mr. Hansen was subsequently hired by one of Tesla’s third-party contactors and assigned to a position in security at Gigafactory by his employer.
Tesla has thoroughly investigated all claims brought forth to Tesla by Mr. Hansen and handled his reports with the utmost thoroughness, objectivity and respect. These investigations showed that Mr. Hansen’s claims were either outright false or lacked enough evidence to be supported. The investigation revealed that Mr. Hansen forwarded numerous Tesla internal documents to his personal Gmail account, including internal security badging records and other sensitive information.
Tesla takes misconduct like Mr. Hansen’s very seriously and the company has every right to expect its employees and contractors to abide by its policies, and to be fully honest and cooperative when dealing with an internal investigation. As a result of the discovery of Mr. Hansen’s misconduct and misappropriation of confidential information, Tesla informed Mr. Hansen’s third-party employer and asked the firm to no longer assign Mr. Hansen to the Gigafactory. However, Mr. Hansen’s termination from the third-party contractor is a matter between his employer and Mr. Hansen, and does not involve Tesla.
Elon was not personally involved in the decision to request that Hansen be reassigned from the Gigafactory, and doesn’t remember having ever met Hansen and certainly wouldn’t be able to identify him out of more than 40,000 employees at Tesla.”
ADDENDUM: In light of the polarized discussion around Tesla, the author discloses that he has never invested in or against Tesla with the exception of owning one (1) Tesla share for several weeks in spring 2018 with the aim of voting for stronger Tesla Board of Directors oversight of its CEO, lest his Twitter antics imperil the company, with cascading repercussions to the broader zero emission vehicle sector. In the ensuing months Elon Musk alleged Thailand cave rescue hero Vern Unsworth was a pedophile, and that Tesla would be taken private at a price of $420 per share.