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Judge denies Tesla’s bid to move sexual harassment case to arbitration

The firm has leaned heavily on mandatory arbitration of workplace disputes to shield the matters from public view

(Bing Guan/Bloomberg News)

SAN FRANCISCO — A California judge denied Tesla’s motion for arbitration in a sexual harassment case, bringing into open court an issue the electric-car manufacturer tried to shield from public view.

Alameda County Superior Court Judge Stephen Kaus made the decision Monday. Tesla has leaned heavily on arbitration clauses, which attempt to mandate that workplace disputes are heard by private arbitrators rather than in open court, thus keeping those decisions private.

Jessica Barraza sued Tesla in November, arguing that Tesla fosters a climate of sexual harassment in which she was often subject to catcalling and aggressive physical touching. Barraza alleged “nightmarish conditions” with a factory floor that “more resembles a crude, archaic construction site or frat house than a cutting-edge company in the heart of the progressive San Francisco Bay area.”

A Tesla factory worker alleges sexual harassment is rampant in a rare lawsuit. Now other women are stepping forward.

She alleged workers referred to her as having a “Coke bottle figure,” “onion booty” and more graphic descriptions, and alleged that a male co-worker picked her up and placed her next to him, pressing her torso under her chest.

The suit alleges sexual harassment is “rampant” at the company.

Tesla requires many of its workers to sign such agreements, and attorneys for the plaintiffs had argued Tesla’s use of arbitration was “illegal and unenforceable.”

The judge denied the arbitration bid in an order Monday.

“Basically, Barraza was ambushed,” Kaus said. “She had gone through extensive preemployment activities, had been offered a job, signed multiple forms and had left her previous employment in reliance on [a job] offer, all without Tesla giving any indication that she would have to agree to arbitrate employment claims and give up her right to a jury trial.”

Attorneys hailed the decision Tuesday as advancing the public interest.

“This is a victory for public accountability,” said David A. Lowe, partner at Rudy Exelrod Zieff & Lowe, who represents Barraza. “Because of this ruling, Tesla will not be able to hide behind the closed doors of confidential arbitration. Instead, Tesla will be judged by a jury of Ms. Barraza’s peers in a public courtroom.”

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Tesla did not immediately respond to a request for comment. The company has argued that its efforts to improve the workplace are a work in progress — but said it has come a long way. The company has also faced allegations of racial discrimination in the workplace. It vigorously denied the claims but has acknowledged it is “not perfect.”

Following Barraza’s suit, six other women sued Tesla alleging sexual harassment at Tesla. The matters are pending.

Some workers said the behavior was exacerbated by CEO Elon Musk’s behavior and occasionally crude tweets.

The publication Insider last week reported that Musk allegedly sexually harassed a flight attendant aboard his jet and that his aerospace firm SpaceX paid the woman $250,000 to settle the claim. Musk has vigorously denied the report and called it “politically motivated” amid his bid to buy the website Twitter.

A Tesla factory worker alleges sexual harassment is rampant in a rare lawsuit. Now other women are stepping forward.

The arbitration decision could have implications beyond the Barraza matter, if judges find they can apply the same standard to other cases.

“I’m so grateful that this decision brings us one step closer to justice,” Barraza said in a statement issued through her attorneys. Attorneys had argued Barraza was wronged, surprised and otherwise blindsided by the arbitration clause.

“Ms. Barraza does not recall having ever heard of arbitration before, did not know what it was, and did not understand that she was being asked to sign away her right to a jury trial,” they argued.

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