Judge Denies Tesla’s Bid for Closed-Door Arbitration Sexual Harassment Lawsuit

A California judge rejected electric car maker Tesla Inc.’s bid for private arbitration of a lawsuit alleging widespread sexual harassment at its flagship assembly plant. Judge Stephen Kaus of Alameda County Superior Court determined that Tesla must continue to defend itself in open court against charges that female employees experience “rampant sexual harassment” in its largest California factory, rejecting the request for closed-door arbitration, despite the fact that Barraza had signed an arbitration agreement waiving her right to sue.

Jessica Barraza filed a case last year, a proposed class-action lawsuit, accusing the employer of “sexual harassment at work,” which includes catcalling, vulgar comments, and unwanted touching.

She said that working the night shift at Tesla’s Fremont, California, facility was “nightmarish” and coworkers and superiors made obscene remarks and gestures on a regular basis. She alleged that her complaints to managers and human resources fell on deaf ears. In the past, Tesla has won the great majority of such lawsuits when using mandatory arbitration to resolve employee disagreements.

The electric carmaker never mentioned or presented the arbitration agreement until after Barraza resigned from her former position, assuming she had been employed by the electric vehicle manufacturer and had completed all of the necessary paperwork, according to Kaus’ judgement. Tesla either deliberately organized this sequence of events or was unacceptably oblivious to the predicament in which this placed Barraza, Kaus said.

In March, President Joe Biden signed a federal statute prohibiting businesses from forcing employees to arbitrate sex-harassment claims, but the policy does not apply to complaints filed before the law was established.

Tesla has come under pressure from shareholder activists who have urged the electric-vehicle maker’s board to adopt transparency about its diversity targets and to use arbitration to handle complaints about sexual harassment and racial discrimination, with little success. The carmaker is facing separate sexual harassment lawsuits from at least six other female employees.
Barraza’s attorney, David Lowe, said that as a result of this decision, Tesla will no longer be able to take cover behind the closed doors of confidential arbitration.

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