A group of mostly Democratic senators pressured Tesla CEO Elon Musk to end the company’s use of forced arbitration clauses in employee and customer contracts, in a letter on Monday.
Like most large companies, Tesla requires workers to sign an arbitration agreement upon employment wherever it is legal to do so. That means to speak freely in court, where their speech will become part of a public record, workers need to get an exemption from the arbitration agreement from a judge first.
The senators wrote that such clauses have allowed workers’ complaints of racist discrimination and other bad working conditions to remain hidden from public view. The group included Sens. Richard Blumenthal, D-Conn., Sherrod Brown, D-Ohio, Dick Durbin, D-Ill., Ed Markey, D-Mass., Jeff Merkley, D-Ore., Bernie Sanders, I-Vt. and Elizabeth Warren, D-Mass.
The letter references details from discrimination lawsuits against Tesla, in which Black workers said they regularly faced racist discrimination at work, and women who worked at Tesla reported blatant objectification and harassment by male co-workers, with little to no support from management. The EEOC, a federal agency responsible for enforcing civil rights laws against workplace discrimination, has previously issued a cause finding against Tesla, the company disclosed in June last year.
The senators wrote that workers at Tesla’s Fremont, Calif. factory seem to have brought at least five times as many discrimination lawsuits last year than workers at comparable plants run by other companies.
“Only a few of these cases, however, have managed to survive in court, with most being forced out of court following Tesla’s motions to compel arbitration,” the lawmakers wrote. “The details these cases allege – some of which we noted above – raise significant concerns about not only Tesla management’s complicity and participation in the discriminatory conditions, but also the untold number of other complaints that remain confidential.”
Forced arbitration clauses in consumer contracts have similarly obscured important details about Tesla’s vehicle safety and business practices from the public, the lawmakers wrote.
“The public deserves the full record of safety complaints about Tesla vehicles,” they said, adding that while clauses in customer contracts can theoretically let customers opt out of forced arbitration, they rarely do so, making the difference basically moot.
Of particular concern to the senators were consumer complaints of phantom braking that occurred in Tesla vehicles.
“Beyond flawed design choices, Tesla’s vehicles appear to be plagued by myriad hardware and software issues: steering wheels in two Tesla vehicles fell off during operation because of a missing retaining bolt, which NHTSA recently opened an investigation into, while another vehicle appeared to spontaneously combust,” they wrote. “But because Tesla drivers, as a practical reality, are subject to confidential arbitration agreements, we and the public – including would-be buyers – have no visibility into what complaints may have already been made and what other potential safety issues with Tesla vehicles may exist.”
Beyond asking Tesla to commit to ending arbitration clauses in employee and consumer contracts and to stop filing motions to compel arbitration in court, the lawmakers asked Tesla for detailed information on its arbitration practices.
For example, senators asked how many racial harassment, discrimination and retaliation complaints Tesla received from workers since 2012 and how many were settled or went to arbitration. They asked for the same details about sexual harassment complaints from Tesla workers.
They also asked for more information on when Tesla added the ability for consumers to opt-out of forced arbitration, and how many had actually been able to do so historically.
The senators also sought detailed information on the types of vehicle related complaints they received from customers, which hardware and software factored into those complaints, how many were settled prior to arbitration and how many that went to arbitration were found in favor of the consumer.
Mandatory arbitration is a common practice among new- and used-car dealerships, says Paul Bland, executive director at Public Justice, the consumer advocacy group. However, Tesla makes and sells its cars direct to consumers so its forced arbitration clauses cover more than the norm where auto sales are concerned.
Bland said, “It makes a lot of sense to me that senators would focus on this. Tesla uses arbitration clauses as a tactic to shunt people into a forum that’s pretty rigged for the corporation.”
The long-time consumer advocate views arbitration as a secretive system that makes it harder for consumers to find out what happened to people in previous related cases. Bland also said arbitration makes it harder for consumers to form class action lawsuits, or even to make informed choices about where they want to take their business.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.