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Latest Tesla Flap Shows The Huge Risks Facing Potential Whistleblowers

This article is more than 5 years old.

The latest labor and employment flap from Tesla is ... stranger than you typically see. To break it down:

On June 20 Tesla filed a lawsuit lobbing allegations of hacking and sabotage at former employee Martin Tripp.

Then Tripp and Tesla CEO Elon Musk got into a back-and-forth in the YouTube comments section over email.

Then Tripp allegedly threatened to shoot up Tesla (or maybe he just got swatted).

Tripp, for his part, says that he's not a saboteur. He says he's a whistleblower.

So aside from the general life lessons to be learned from all this recent Tesla weirdness--"Don't send insulting emails to potential whistleblowers if you are a billionaire tech genius CEO" belongs up there with "Never get involved in a land war in Asia"--there's also an important reminder about American workplace law, too.

Whistleblowers in America are really unprotected. Like really, really unprotected.

Don't believe it?

Assume for the moment that everything Martin Tripp is saying is true. Assume he's something close to the platonic ideal of the whistleblower.

In other words, assume that Tesla really has been hiding negative manufacturing outcomes from investors (which they deny). Assume that Tripp dutifully reported his allegations up the chain of command but was rebuffed. Assume that Tripp then went to the press--in this case Business Insider--because he felt there were no other options to protect the public. Assume he simultaneously reported his concerns to a government regulator.

Even if that's all true (and at this point we don't know), Tesla would still have the power to ruin Tripp's life--and to do it legally.

How? By filing a lawsuit just like the one it filed.

Here's the thing.

People (including corporations, my friend) have a constitutional right to file lawsuits. It's right there in the First Amendment. And no puny statute--not OSHA, not the NLRA, not Dodd-Frank--can override your constitutional right to go to court. (Well...)

Pretty much the only way the law will punish you for filing a lawsuit--even a retaliatory lawsuit against a whistleblower--is if a court decides your lawsuit is frivolous. "Frivolous" is a very, very narrow legal category. Lawsuits are only "frivolous" in the legal sense when no reasonable judge could conclude you had a real legal claim in the first place.

But punch-back lawsuits against whistleblowers are rarely found to be frivolous.

Because really, until all the facts are in, who knows? Is an employee who downloads internal documents just collecting evidence of fraud before it's destroyed--or is he recklessly breaching a confidentiality agreement and exposing trade secrets? Is an employee who passes along unflattering internal documents to journalists protecting the public--or is she breaching her duty of loyalty to her employer?

(By the way, these are the kinds of allegations Tesla has made against Tripp. They come up all the time in whistleblower lawsuits.)

The courts don't feel they can answer those questions ahead of time. So they let corporations press their lawsuits against potential whistleblowers at the same time that the whistleblower (or the government) is pressing a lawsuit against the corporation.

It turns whistleblower lawsuits into a uniquely high-risk, winner-take-all kind of litigation. Which means that when whistleblowers lose, they can really lose--their house, their car, their financial future.

And even when whistleblowers win, a lot of times they lose.

They lose because they have to pay lawyers to defend them against companies worth billions. Of course litigation is not cheap. Nor is it stress-free--think of the sleepless nights, the mental health issues that come from knowing your whole world can come crashing down. And litigation isn't fast--whistleblowers get stuck in the meat-grinder of litigation for years, with no idea of what kind of life awaits them on the other side.

Sound fun? No?

Turns out there's a reason that more people don't blow the whistle on corporate fraud. Normal people don't risk it. Oh they see the fraud going on around them--they just shrug at it. They turn their head, collect a paycheck. In exchange, they get to keep their lives intact.

It's the rest of us who suffer the consequences when corporate fraud stays hidden.

As for Tesla's case against Tripp--we don't know the facts yet. It may be that Tesla is right about Tripp. It may be that Tripp is right about Tesla.

We'll let the courts decide--which means, like usual, we'll let the potential whistleblower bear the risk.

 

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