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Tesla Whistleblower Files Federal Retaliatory Termination Suit

A former Tesla employee has filed a federal lawsuit claiming, among other things, that he was fired in retaliation for blowing the whistle. He reported incidents of theft, improper surveillance, improper contract awards and even drug trafficking, which he alleges took place at Tesla's Gigafactory in Nevada.

He blew the whistle to the Securities and Exchange Commission under the Sarbanes-Oxley Act (SOX), which means he could receive up to 30% of any money the SEC ultimately recovers from Tesla in the matter.

The SOX prohibits retaliation against people who blow the whistle in good faith. Furthermore, a whistleblower may not even need to prove that an adverse employment action was motivated by retaliatory intent. It may be enough to show that such an action occurred after the whistleblowing.

Telling the truth can be unpopular

During the period in question, the whistleblower was employed by Tesla, and then by a contractor that was staffing the Gigafactory, as an internal investigator assigned to a wide range of matters. One investigation was into alleged thefts of between $37 million and $150 million that may have occurred at the factory. Another involved a question of whether members of a drug cartel were operating a narcotics trafficking ring out of the factory.

Later on, the man investigated allegations that senior Tesla management had improperly awarded contracts, resulting in significant losses to the company. After he reported his findings to the company, he says, he was summarily fired from Tesla.

After that, he obtained a three-year contract position with USSA, a third-party staffing company. In this position, he was to continue his previous investigations. After making new findings, he reported to Tesla that there might be ongoing criminal activity at the factory, which could warrant law enforcement involvement. He also stated that the company might be involved in covering up the alleged criminal activity.

He also discovered that a senior Tesla manager and his group were using devices to spy on employees' emails, cellphones and texts, which the whistleblower believed to be illegal. In any case, the activities were allegedly not reported to shareholders or the SEC.

After he expressed his concerns to management, his contract with USSA was abruptly revoked. He was told this was due to restructuring, but another investigator was hired for the position.

After being rebuffed by Tesla management, the man reported his findings to the SEC.

If you have witnessed unlawful behavior at your company and choose to blow the whistle, there could be legal protection from retaliation. However, it is crucial to get good advice on where, how and when to report your allegations to the government. Contact an experienced employment law attorney for help.

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