A man who alleges he was wrongfully fired from his managerial job at Elon Musk’s Tesla Motors Inc. in 2023 for complaining that would be committing fraud if he abided by a management order to overcharge customer does not have to arbitrate his case, a judge has ruled.
Los Angeles Superior Court Judge Virginia Keeny heard arguments on Friday on Tesla’s motion to compel arbitration of plaintiff Jon Adam Hinze’s case, took the case under submission and issued a final ruling on Tuesday denying the motion.
Tesla lawyers argued that Hinze was bound to arbitrate any work disputes under the terms of a letter offering him employment that he signed in April 2015.
“When plaintiff accepted Tesla’s offer of employment, he agreed to arbitrate any and all employment-related disputes with a neutral arbitrator…,” a Tesla attorney wrote in his court papers.
But the judge said the agreement was, among other things, biased in favor of Tesla.
“In sum, the agreement consists entirely of promises made by the employee to Tesla,” the judge wrote. “It creates a host of claims Tesla might bring against its employee, but none in reverse.”
The arbitration agreement is therefore “unconscionably one-sided,” according to Keeny.
Hinze, 40, is represented by attorneys from the law office of Gloria Allred. In the suit brought last Aug. 1, Hinze says he worked as an owner adviser and later a district and regional manager for Tesla for about 10 years.
Hinze “refused to participate in widespread fraud being perpetrated upon Tesla’s customers who brought their cars in for service,” the suit states.
According to the suit, Hinze disclosed to his supervisor that the Burbank and Torrance service centers fraudulently marked cars as having been delivered before they were actually returned to customers in order to enhance repair time scores. Hinze also discussed how the Centinela and Santa Monica locations cheated the labor productivity metric by stacking correction codes in order to double-dip on labor in a way that customers would not notice, the suit further states.
In response, the supervisor told Hinze, “You’re good at making excuses” and advised him to “just get the job done and climb the leader board,” the suit states.
The stress and anxiety caused by the supervisor’s alleged demands to engage in fraudulent activity took a physical and psychological toll on Hinze, who saw told his boss that he had begun seeking medical care and did not believe he could reach the boss’ aggressive targets without cheating customers.
” Mr. Hinze cared about Tesla and the exposure if customers learned that some service centers were overbilling them,” the suit states.
However, human resources declined to investigate Hinze’s allegations and he was fired in December 2023, according to the suit, which seeks unspecified compensatory and punitive damages.