Seven US senators raise concerns about Tesla use of forced arbitration clauses

By David Shepardson

WASHINGTON (Reuters) -A group of seven U.S. senators on Monday questioned Tesla (NASDAQ:) Inc’s use of forced arbitration clauses in employee and consumer contracts, arguing that they prevent bringing discrimination claims and consumer safety complaints to court.

The letter, whose authors include Senator Richard Blumenthal, a Democrat, to CEO Elon Musk cited numerous incidents of alleged racial and sexual harassment as well as complaints about Tesla’s vehicles 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,” said the letter, which was also signed by senators Bernie Sanders, Elizabeth Warren, Edward Markey, Jeff Merkley, Dick Durbin and Sherrod Brown.

Tesla did not immediately comment.

Last month, a jury in San Francisco ordered Tesla to pay about $3.2 million to a Black former employee after he won a racial harassment lawsuit against the electric-vehicle maker, far less than the $15 million he rejected last year in opting for a new trial.

Tesla has said it does not tolerate workplace discrimination and takes worker complaints seriously.

The EV maker faces similar claims of tolerating race discrimination at its plant in Fremont, California and other workplaces in a pending class action by Black workers, a separate case filed by a California civil rights agency, and multiple cases involving individual workers. The company has denied wrongdoing in those cases.

The senators cited an ongoing National Highway Traffic Safety Administration investigation into reports of “phantom braking” in Tesla vehicles. The senators sought answers to detailed questions by June 8 about Tesla’s use of forced arbitration.

The senators said arbitration clauses may keep “potential safety flaws from the public eye and limited regulatory authorities’ ability to protect Tesla customers and employees and hold Tesla publicly accountable.”