Explainer-Do claims against Musk raise a legal issue for his companies and Twitter deal? -Breaking
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© Reuters. FILE PHOTO Elon Musk’s Twitter account is shown on this photograph illustration, taken on April 28th 2022. REUTERS/Dado Ruvic/Illustration2/2
Written by Tom Hals and Daniel Wiessner
(Reuters) – A report that Tesla Inc CEO Elon Musk paid $250,000 for sexual harassment claims made by a flight attendant aboard a private plane. This comes amid his plans to takeover Twitter (NYSE)
Here is a summary of key legal issues arising out of these claims. It was published by Business Insider on Thursday. Musk denied all allegations.
What are the Claims Against MUSK?
Business Insider reported Thursday that SpaceX paid $250,000 for settling claims from an unidentified private plane flight attendant alleging Musk had exposed himself to her. According to the article, an unidentified person claimed that she was a friend and flight attendant. According to the article, the friend had given a statement during a private settlement process.
Musk tweeted on Thursday to deny the accusations and claim that it was “utterly absurd” for Musk. He also claimed that the incident “never took place.” Reuters couldn’t confirm independently the Business Insider reports.
HAS MUSK EVER ACCUSED OF ANY PAST SECIAL HARASSMENT COMPLAINTS, LAWSUITS OR OTHER DISCREETIONS?
No. Musk has not been accused of any other form of harassment.
ARE MUSK’S COMPANIES SUSPECTED TO BE CONFLICTED BY SEXUAL HARASEMENT OR OTHER EMPLOYMENT LAWSUITS?
Tesla is facing accusations of racism and sex discrimination. There was a California race bias lawsuit and one by the Department of Fair Housing and Employment. The lawsuit alleges widespread race discrimination.
Since late last year, at least seven women filed lawsuits against Tesla for sexual harassment and discrimination. The lawsuits in question are still at an early stage.
Tesla strongly denied any wrongdoing, and stated that it had adopted policies to stop and punish workplace misconduct.
Tesla isn’t the only company that faces such legal issues; all large U.S. corporations with large workforces will face employment-related lawsuits or claims.
SpaceX does not face lawsuits for sexual harassment despite numerous accusations made by female employees in the media or online. One example: In December, an ex SpaceX engineer complained that SpaceX was “rife in sexism”, and that her concerns about sexual harassment had been dismissed.
SpaceX stated that it investigates all complaints of harassment or discrimination and will take appropriate actions if a policy has been violated.
IS MUSK A DEFENDANT IN LAWSUITS AGAINST COMPANIES
No. No. Musk isn’t a defendant in any lawsuits. However, Musk is not a defendant in any of the pending cases for race discrimination or sexual harassment. Employees have accused him of dismissing misconduct allegations and allowing hostile work environments to flourish.
AREA WHERE DO LAWSUITS STAND? AND HOW HAVE COMPANIES REPONDED TO THEM.
In April, a federal judge awarded $15 million to Black Tesla worker. He claimed that he had been subjected in Fremont, California to racist graffiti and racial slurs by his coworkers. Tesla sought to stop the California agency from suing, saying it did not conduct an adequate investigation.
California’s judge will soon rule on Tesla’s request for arbitration to resolve one of its sexual harassment claims against Tesla. This judge preside over similar cases in five other states, and his decision could have an impact on those suits.
WOULD MUSK HAVE HAD A DUTY to DISCLOSE THIS INFORMATION TO SPACEX’S BOARD IF MUSK EVER FINALIZED WITH FLIGHT ATTENDANT?
Companies must comply with all laws, and boards have an obligation to do so. Ann Lipton from Tulane Law School stated that although board members won’t be privy to every case of rule-breaking, it is expected they have the procedures in place to identify claims made against the CEO.
Reuters couldn’t independently identify the source of funds that were used in SpaceX to compensate the victim.
WOULD TESLA’S BOARD NOW KNOW THE SETTLEMENT
Three SpaceX Board members served on the Tesla board simultaneously in 2016. They have the duty to keep confidential information they receive as directors, and they might not have disclosed the information to the Tesla board. Reuters couldn’t determine whether any of the members of these boards disclosed the settlement.
TWITTER HAS A REASON FOR INVESTIGATION?
Lipton replied that there is a “clear ‘no’.” Musk, a major shareholder in Twitter, has tried to purchase the company. However, when the board sells a company to cash for its shareholders, it is “only responsible to obtain the highest share price,” Lipton said.
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