Unpaid workers, sexist conduct, factory on fire: Elon Musk faces troublesome week with lawsuits, court hearings

Elon Musk is facing a troublesome week with three separate incidents where he faces lawsuits from former employees over unpaid salaries and sexist behaviour. Additionally, an arson incident in one of his Tesla factories in Europe has caused a ruckus.

Sexist conduct

Rocket maker SpaceX on Tuesday will appear before a U.S. labour board judge to face claims that it fired eight engineers for criticizing CEO Elon Musk and accusing him of sexist conduct in a letter to company executives.

The case before National Labour Relations Board Administrative Law Judge Sharon Steckler in Los Angeles prompted SpaceX to file a lawsuit in January seeking to block it from going forward by claiming the board's in-house enforcement proceedings violate the U.S. Constitution.

The NLRB's general counsel, which acts as a prosecutor, claims SpaceX violated U.S. labour law by firing the engineers in 2022 after they circulated a letter accusing Musk of sexist conduct and claiming the company tolerated discrimination against women. SpaceX is accused of violating the National Labour Relations Act, which protects workers' rights to bargain together and advocate for better working conditions.

The engineers have separately filed complaints with a California civil rights agency accusing SpaceX of tolerating sex discrimination and retaliating against workers who complained.

SpaceX has denied wrongdoing while attacking the labour board's core functions in the lawsuit, which it filed in Texas federal court. A judge last month transferred the case to California, citing the fact that the labour board case was being heard there.

SpaceX is challenging that decision in an appeals court, and the California judge on Monday sent the case back to Texas pending the outcome of the appeal.

Kayla Blado, a spokeswoman for the board, said Tuesday's hearing "will be mostly procedural," focusing on the scope of subpoenas the board can issue to obtain information from SpaceX and a schedule for future hearings. Steckler will not hear testimony or opening statements, Blado said.

If SpaceX loses, it could be ordered to reinstate the workers and compensate them for lost pay and benefits. Steckler's decision in the case can be appealed to the five-member board and then a federal appeals court.

SpaceX did not respond to a request for comment. The company is represented by lawyers from law firm Morgan Lewis & Bockius including John Ring, who was the chairman of the NLRB during the Trump administration.

SpaceX had asked to put off the hearing pending the company's bid in the Texas court to block the labour board case from moving forward. An NLRB regional director last month denied that motion and the five-member board, which has one vacancy, upheld that decision in a single-page ruling.

In its lawsuit, the company claims the labour board's administrative process for hearing cases involving illegal labour practices violates its constitutional right to a jury trial. SpaceX also says limits on the president's ability to remove administrative judges and board members are unconstitutional.

Starbucks, Amazon.com and Trader Joe's, all of which are facing nationwide union organizing campaigns, have raised similar arguments in pending board cases.

The labour board has said in court filings that removal protections similar to those for board judges and members have been upheld by the U.S. Supreme Court, and that the right to a jury trial does not extend to cases brought under federal labour law.

Unpaid salaries

Former top executives of Twitter sued Elon Musk on Monday saying he has failed to pay them nearly $130 million after the billionaire took over the social media company and dismissed them.

"Musk doesn't pay his bills, believes the rules don't apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him," they said in the lawsuit filed in a California federal court.

The plaintiffs include former CEO Parag Agrawal, who according to the lawsuit is claiming $57.4 million in benefits, as well as fired CFO Ned Segal who is asking for $44.5 million. The other plaintiffs are former chief legal officer Vijaya Gadde and the company's then General Counsel Sean Edgett.

Musk terminated Agrawal, Gadde and Segal from their posts in late October of 2022 after closing his contentious $44 billion takeover of Twitter. According to the suit, citing a recent authorised biography of Musk, the tycoon went out of his way to ensure the executives were not able to resign from the company before he fired them in the first moments after taking over.

The executives "appropriately and vigorously represented the interests of Twitter's public shareholders throughout Musk's wrongful attempt to renege on the deal," the suit said.

"For their efforts, Musk vowed a lifetime of revenge," it added.

This referred to the bitter months leading up to the buyout, when Agrawal and his team drew Musk's anger for going to court to hold the Tesla chief to the terms of a takeover deal he had tried to escape.

"Because Musk decided he didn't want to pay Plaintiffs' severance benefits, he simply fired them without reason, then made up (a) fake cause and appointed employees of his various companies to uphold his decision," the suit alleged.

Musk, a self-declared "free speech absolutist," vowed to remove restrictions at Twitter after he bought the platform. Twitter has since been renamed to X, and has seen its staff numbers drastically slashed, with content moderation put on the back burner, with many previously banned accounts reinstated.

Musk has also seen major advertisers flee the site over the increase in troublesome content, and has struggled to build a strong enough subscription base to make up the lost revenue.

In a separate case, Agrawal, Gadde and Segal are suing Musk to be reimbursed for costs of litigation, investigations and congressional inquiries related to their former jobs.

Fire in Tesla factory

Tesla halted production at its German factory Tuesday after high-voltage lines supplying the carmaker's only European plant were set on fire in an act of "sabotage" claimed by a far-left group.

Emergency services were called in the early hours of Tuesday to reports of a burning electricity pylon southeast of Berlin, close to the Tesla plant.

The blaze was extinguished but damage to the lines knocked out power to the factory, as well as surrounding villages. After police said they had launched an investigation into suspected arson the act was claimed by far-left activists from the so-called Vulkangruppe (Volcano Group).

"With our sabotage, we have set ourselves the goal of achieving the biggest possible blackout of the Gigafactory," the group said in a statement posted on a far-left website.

The group highlighted concerns about the environmental impact of the plant and the local water supply.

"We feel connected to all the people who won't let Tesla turn the tap off," the group said.

Michael Stuebgen, interior minister for Brandenburg state, said that if arson was confirmed, it would be "a perfidious attack on our electricity infrastructure".

"Thousands of people have been cut off from their basic supply and put in danger. The rule of law will react to such an act of sabotage with the utmost severity."

Tesla said the production facilities at the Gruenheide plant were in a "safe state" after the shutdown, and workers had been sent home. "We are in close contact with the authorities and of course (electricity supplier) Edis. We are currently unable to say when production can be expected to resume," the company said in a statement.

The power outage is the latest problem to hit the factory.

In January, most production was halted at the site for two weeks due to a shortage of parts following shipping delays caused by Yemeni rebel attacks in the Red Sea, a vital trade route.

Tesla's German plant started production in 2022 following an arduous two-year approval and construction process dogged by administrative and legal obstacles.

Tesla wants to expand the site by 170 hectares (420 acres) and boost production up to one million vehicles annually to feed Europe's growing demand for electric cars and take on rivals who are shifting away from combustion engine vehicles. But the plans have annoyed local residents, who voted against the project in a non-binding ballot last month.

After the vote, Tesla said it might have to rethink the plans. "We recognise that the citizens of Gruenheide have concerns in connection with the planned expansion of the site," the company said.

Environmental activists opposed to the expansion of the factory run by Elon Musk's company recently set up a camp in a wooded area near the plant.

Protestors at the forest camp, situated in an area of forest that the carmaker will have to raze if the expansion goes ahead, share many of the locals' objections to the factory.

As well as deforestation, the activists say there is a threat to local drinking water supplies.

Stop Tesla, the group behind the protest camp, said Tuesday it had "no information" about the cause of the fire and shared its "solidarity with the workers at Tesla and the local residents".

Tesla has plenty of headaches elsewhere. In Sweden, a strike by Tesla maintenance and repair workers has lasted more than four months over its refusal to sign a collective wage agreement.

In January, the company reported lower fourth-quarter operating profits despite higher revenues, while warning of slower volume growth this year.

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