A former Tesla Inc. employee can’t pursue allegations that he was fired for reporting improper record keeping because the underlying issues were resolved through arbitration, a split federal appeals panel ruled Tuesday.
Although an arbitrator’s decision can never preclude a claim under the Sarbanes-Oxley Act, “a confirmed arbitral award can sometimes preclude relitigation of the issues underlying such a claim,” Judge Holly A. Thomas said for the US Court of Appeals for the Ninth Circuit.
Hansen’s work for Tesla included internal investigations concerning allegations of, among other things, theft, narcotics trafficking, wiretapping, and hacking, according to the opinion. After relaying this information to Tesla’s management, which Hansen says reached CEO Elon Musk, he was terminated due to alleged “internal restructuring.”
He was later hired by US Security Associates, which provides its security services to Tesla, and continued his investigations at the car manufacturer’s Nevada Gigafactory, Thomas said. He sought help from local and federal law enforcement and made a report about the alleged misconduct to the US Securities Exchange Commission. But after being spotted by Musk at the factory, Hansen said his position was eliminated and he was reassigned to a post unrelated to Tesla.
Hansen claimed that the defendants—Tesla, USSA, and Musk—breached and...
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