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Judge: Tesla can’t force alleged sexual harassment victim into arbitration

Aerial view of Tesla cars in a parking lot at the company's factor. The word
Enlarge / Tesla cars in a lot at the company’s factory in Fremont, California.

Getty Images | Justin Sullivan

Tesla can’t force a woman who sued the company over sexual harassment into arbitration, a judge ruled on Monday.

Jessica Barraza sued Tesla in November 2021 in Alameda County Superior Court in California, alleging that she and other women working in the carmaker’s Fremont factory were subjected to “nightmarish conditions of rampant sexual harassment.” The Tesla factory “resembles a crude, archaic construction site or frat house,” with women enduring sexual comments, propositions, and inappropriate touching, the lawsuit said.

Barraza also alleged Tesla retaliated against her after she complained about sexual harassment and that she was “denied certain privileges and benefits that were afforded to women who did not object to supervisors’ sexual advances and flirtations.” Many more details are in our coverage of the lawsuit.

Tesla moved to compel arbitration, saying Barraza signed an agreement that “[a]ny claim, dispute, or cause of action must be brought in a party’s individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.” The arbitration agreement “encompasses every claim pleaded in Plaintiff’s complaint,” Tesla said.

Barraza’s legal team called the agreement procedurally unconscionable, writing that “Tesla increased its leverage by not telling Ms. Barraza about the arbitration provision until she had already accepted a verbal offer and quit her other job.” The offer letter she signed “does not explain that Ms. Barraza was giving up the right to a jury trial,” Barraza’s court filing said.

“It is procedurally unconscionable to force a low-wage, unsophisticated worker to sign an adhesion contract relinquishing the right to go to court after she had already quit her [previous] job in reliance on Tesla’s verbal job offer and had already signed three documents stating that disputes would be decided in court,” the filing said. The previously signed documents included an applicant NDA, a visitor NDA, and a Proprietary Information and Inventions Agreement (PIIA).

Judge: “Barraza was ambushed”

Tesla argued its case in a hearing, but Judge Stephen Kaus was not convinced and, in an order issued on Monday, denied Tesla’s motion to compel arbitration. Kaus wrote, “The amount of procedural unconscionability here is considerable. Having left her previous employment, the pressure on Barraza to sign the offer letter was more significant than that found to be minimal in other cases.”

While Tesla argued that Barraza had the option of not signing the offer letter, Kaus found “it is obvious that signing was a condition of employment.”

“Tesla either orchestrated this sequence of events on purpose or was unacceptably indifferent to the situation in which this placed Barraza,” the judge wrote. “Basically, Barraza was ambushed. She had gone through extensive pre-employment 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.”

In a press release, Barraza attorney David Lowe said, “Because of this ruling, Tesla will not be able to hide behind the closed doors of confidential arbitration,” and Barraza’s claims will be heard in a jury trial.

“I’m so grateful that this decision brings us one step closer to justice,” Barraza said.

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