Tesla Loses Fight to Arbitrate Worker’s Sex Harassment Case

Tesla failed in its’ attempt to force a former production associate to arbitrate her claims, in which she alleged she faced constant sexually harassing remarks and unwanted touching from male supervisors at the company’s Fremont facility, as ruled by a California state judge.

On Monday, Alameda County Judge, Stephen Kaus, denied Tesla's February bid to send Jessica Barraza's sexual harassment claims before an arbitrator, finding the agreement is unconscionable because Tesla "ambushed" the worker with the arbitration pact just days shy of her start date.

"Tesla either orchestrated this sequence of events on purpose or was unacceptably indifferent to the situation in which this placed Barraza," the judge said. "Basically, Barraza was ambushed."

Barazza already had accepted an oral job offer, quit her previous position and signed several employment documents with Tesla before the company sent over an offer letter containing the arbitration provision, according to the opinion.

"She had gone through extensive preemployment activities, had been offered a job, signed multiple forms and had left her previous employment in reliance on that 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," the judge said.

Outside the signing process, the judge also noted that the contract terms seemed unfair as well, as they forced Barazza to take her case to arbitration while it allowed Tesla to pursue claims against the worker in court. The judge also found the confidentiality provisions were unconscionable because they were over broad.

"The inescapable conclusion is that Tesla created substantial pressure that effectively negated Barraza's free will, inserted two unconscionable provisions and attempted to enforce the agreement as is," the judge said.

Tesla, which is facing a slew of lawsuits from female workers who say they were inundated with unwanted sexual advances and remarks, had insisted that an arbitration agreement Barraza inked when she joined the company in 2018 mandated that her claims under California's Fair Employment and Housing Act move ahead outside of court.

The arbitration provision, contained in a four-page offer letter, was fully enforceable with clear, understandable terms, the electric car manufacturer told the court.

Barraza argued the agreement was one-sided and couldn't be enforced because Tesla sent it to her just days before her start date without explanation or any chance of negotiating.

She also said she signed the agreement without knowing what arbitration meant. In a late February filing, she said Tesla's conduct was "procedurally unconscionable" because it forced a "low-wage, unsophisticated worker" to relinquish her right to go to court even though she had already quit her previous job to begin work at Tesla.

Barraza said in her statement this week, "I'm so grateful that this decision brings us one step closer to justice.”

Her legal team also lauded the outcome in a news release.

"This is a victory for public accountability," said Rudy Exelrod Zieff & Lowe partner David A. Lowe. "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," Lowe said.

Lawyers and representatives for Tesla did not respond to requests for comment.

Barraza is one of six women who sued Tesla in November and December alleging they faced "nightmarish" sexual harassment — including crude commentary about their bodies, ogling and groping — while working for the electric carmaker in Fremont.

A seventh woman who worked for a Tesla service center in Los Angeles also sued late last year, alleging she faced consistent sexual and demeaning comments.

Barraza's lawsuit, which she filed in November, alleged that all of her supervisors either were aware of the harassment or were doing it themselves, and that human resources ignored it.