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Tesla vs. Tripp: Who’s at Fault in the Tesla Whistleblower Case?

Tesla vs. Tripp can teach us a lot about the Dos and Don’ts of bringing a whistleblower case.

Tesla_Front_Store-300x200These are the facts: On June 20, electric car manufacturer Tesla sued Martin Tripp for $1 million. Tesla alleged that Tripp — who had previously worked as a process technician at Tesla’s battery factory in Nevada — stole confidential company information and transferred it to third parties, including the media.

A couple weeks later, on July 6, Tripp retained legal counsel and filed a formal whistleblower tip with the United States Securities and Exchange Commission. Tripp claimed that Tesla knowingly manufactured faulty batteries, lied about the number of cars they were manufacturing and systematically incorporated scrap materials into their vehicles. Tripp also filed a counterclaim alleging that he’d been defamed by Tesla.  

Room For Improvement

While lots of companies claim to have “trade secrets” but do little to protect them, Tesla has valuable trade secrets that it takes significant steps to protect. Still, just because the information in question was potentially valuable or important doesn’t mean that Tripp was empowered to leak it in any manner that he wished.

Whistleblowers are more likely to receive protection in cases where the whistleblower has invoked the protection of a specific law or regulation and has disclosed the information in furtherance of a legal right. For instance, in this case, Tripp might have been better off had he alleged that Tesla was, as a hypothetical example, violating a Department of Transportation regulation by using substandard parts or materials, committing some form of financial fraud, or deceiving consumers or investors and then provided information to the government agency tasked with investigating the issue.

It Matters Who You Leak To

Tripp’s first move (before even hiring a lawyer) was to leak the information to the press. Only later did he file a formal tip with the SEC. It’s difficult to understand why he went to the press first, and it’s unlikely that, had he been acting under the advice of counsel, he would have chosen this method.

And it’s not as though the SEC was Tripp’s only option: he might have gone to any number of government agencies given the breadth of his allegations. There were many avenues that Tripp didn’t pursue that would have likely been much more appropriate.

Whistleblower Statutes Are Highly Technical

There are a number of whistleblower statutes that Tripp might have availed himself of, and each of them have different and very particular reporting requirements. For instance, some laws are designed to encourage whistleblowers to act immediately and may require them to file a report within as few as 20 days. Other kinds of whistleblower actions, like False Claims Act cases for fraud against the government, may be filed under seal (or in secret), so the whistleblower may have to proceed very carefully until the government makes its decision about how to proceed.

It’s also worth noting that some agencies, like OSHA, have an administrative process set up for adjudicating whistleblower complaints; OSHA representatives will actually pursue cases on behalf of whistleblowers (MSHA has a similar process set up for mine workers). This is important because many employment statutes require the employee to utilize an agency’s administrative process and don’t actually allow for a traditional lawsuit, at least not immediately.

Another example is pursuing a discrimination case, which requires filing an administrative charge with the EEOC (within 180 days in many jurisdictions) before a lawsuit can be filed. Where agency involvement is required, the whistleblower should still have a private lawyer, but a government representative may be required to investigate or prosecute the case.

Whistleblower Cases Are Complicated

If you’re considering making a whistleblower report, the prudent course of action is to talk to an attorney. Not your friend, not your boss — an attorney. John L. Mays and his team of experienced employment attorneys can assist in determining what the illegal conduct is that should be reported, who it should be reported to, and when it needs to be reported.

We’ve handled cases involving retaliation under everything from Title VII to OSHA.. Whatever your whistleblower claim is, we have the expertise necessary to help manage it properly. These cases are complicated. Call John L. Mays today.