Tesla urged by seven senators to end forced arbitration for workers and customers

Published

2 years ago

May 8, 2023

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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.

Read the full letter here.

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Technology

Instagram will award top creators with a gold ring. But no cash

Published

17 mins ago

October 6, 2025

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Instagram will award top creators with a gold ring. But no cash

Anadolu | Getty Images

Instagram announced on Monday the launch of a new “Rings” award that will give 25 creators a literal gold ring and a matching badge on their profile, but no cash.

Winners will be chosen by a panel including Instagram chief Adam Mosseri, filmmaker Spike Lee, designer Marc Jacobs and YouTuber Marques Brownlee.

The move comes as Meta-owned Instagram has wound down its creator bonus program and brand deals are slowing across the industry, raising the question of why one of the world’s richest companies is offering jewelry and profile features instead of direct payouts.

“It’s more about a special visibility and sort of incentive for people to work towards a really cool elevated recognition,” Brownlee told CNBC.

He said he nominated creators whose work showed the most effort and risk-taking, not simply those with the biggest followings.

Winners can also change their profile backdrop color and customize the “like” button.

Cerebras CEO explains IPO withdrawal, says it still intends to go public

Published

1 hour ago

October 6, 2025

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Cerebras CEO explains IPO withdrawal, says it still intends to go public

Cerebras CEO Andrew Feldman speaks to the media at the Colovore office in Santa Clara, Calif., on March 12, 2024.

The Washington Post | Getty Images

Cerebras CEO Andrew Feldman admitted that his artificial intelligence chipmaker made a mistake last week when it didn’t immediately explain its decision to withdraw its registration for an IPO.

In a LinkedIn post late Sunday, Feldman wrote that the company still wants to go public but has changed significantly since its initial filing a year ago. The company wants to revise parts of its prospectus before selling shares to the public.

“Given that the business has improved in meaningful ways we decided to withdraw so that we can re-file with updated financials, strategy information including our approach to this the [sic] rapidly changing AI landscape,” Feldman wrote.

Days before filing its withdrawal notice on Friday, Cerebras announced a $1.1 billion funding round at a valuation of $ 8.1 billion. Some of the investors in the new round, including Tiger Global and 1789 Capital, where Donald Trump Jr. is a partner, weren’t named in the 2024 filing, he added.

“We made this call because it’s in the best interest of our investors, partners, and team — and it will allow potential investors to better understand the value of the business when we enter the public markets,” Feldman wrote, without providing a timeline for a new filing.

In its prospectus, Cerebras characterized itself as a company that produces large-scale chips for training and running AI models. This year the company has added cloud business as it operates data centers that can handle incoming requests from AI models.

What’s remained is Cerebras’ insistence that its hardware outperforms graphics processing units (GPUs), a market that Nvidia dominates but where Advanced Micro Devices is trying to play catchup. AMD said on Monday that OpenAI committed to setting up to 6 gigawatts’ worth of the company’s AI processors and could end up owning 10% of the chipmaker.

WATCH: Cerebras CEO: Here’s why our chips are a more efficient alternative to Nvidia

Technology

Anthropic lands its biggest enterprise deployment ever with Deloitte deal

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2 hours ago

October 6, 2025

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Anthropic lands its biggest enterprise deployment ever with Deloitte deal

Samuel Boivin | Nurphoto | Getty Images

Deloitte on Monday announced a deal to bring Anthropic’s artificial intelligence assistant Claude to its more than 470,000 employees around the globe.

The rollout will be Anthropic’s largest enterprise deployment ever, building on a partnership the two companies first unveiled last year.

Deloitte, which offers consulting, tax and audit services, is one of the 300,000 business customers Anthropic has amassed in the four years since the startup’s founding.

“We are both investing a significant amount in this partnership, whether that’s financial or whether it is just simply the engineering resource that we’re going to put into this as well,” Paul Smith, Anthropic’s chief commercial officer, told CNBC in an interview.

The companies declined to disclose the financial details of the deal.

Deloitte will build out and deploy different Claude “personas” for different groups of employees, ranging from accountants to software developers, over the next several months. Staffers can also get support from specialists within Deloitte’s Claude Center of Excellence, which is designed to help teams deploy and benefit from the technology more quickly.