Tesla Makes It Right, Settles Injured Foreign Worker Lawsuit



Tesla's Fremont Factory

Tesla’s Fremont Factory

It was reported that a pending Tesla lawsuit filed by foreign worker, Gregor Lesnik, injured while working at Tesla’s Fremont factory in May was settled thereafter for $550,000. The painter fell three stories, breaking his legs, ribs, and suffering a concussion.

Tesla Assembly Line In Painting Process

Tesla Assembly Line In Painting Process

As part of the incident, Tesla and its subcontractors have been under scrutiny and investigation by media because foreign workers have reported unfair labor practices.

The group of workers, including Lesnik, are managed by a Slovenian company known as ISM Vuzem, that transports the foreign employees to the factory to work long hours at low wages.

It was alleged that the managing company mandated sixty to seventy hour work weeks at less than $5 an hour. (It claimed that Vuzem paid Lesnik ~800 euros per month ($878 USD),or about $4/hour). The employees were told that they would also receive a stipend equal to money earned, once they returned back home, but the promises were never realized.

Although Tesla has released statements assuring that it has not violated any laws, reports show that the workers were actually contracted at $12.70 per hour. Reportedly, $2.6 million in estimated overtime and salary has gone unpaid according to the language of the lawsuit.

Tesla made it known that OSHA, government regulator of accidents in the workplace, investigated and found Tesla to not be at fault for the incident involving Lesnik. A statement from Tesla reads:

“When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.”


Tesla's Fremont Factory

Tesla’s Fremont Factory

Lesnik came to the Tesla paint shop in March of 2015, part of a project led by systems manufacturer Eisenmann, who then used its own subcontractor – ISM Vuzem (out of Slovenia).

Over the course of the investigation, Tesla CEO Musk confirmed that his company paid Eisenmann $55 an hour for the work being done, and in turn Eisenmann paid Vuzem an “hourly rate” to actually do the work (amount unknown).  From there Vuzem promised wages of $12.70/hour to workers, which was claimed to actually be less than $5 in reality.  So, it appears as though more than a little was ‘taken off the top‘ before wages hit the bottom rung of the ladder.

Elon Musk immediately tweeted on the matter when it first came to light in May: “Sounds like the wrong thing happened on many levels. Will investigate and make it right.”

As a result of the injuries (and probably the bad press as well), Mercury news reports the case was quickly settled out of court. $400,000 of the money was to agree to bring an end to the pending civil suit. The final $150,000 covered Lesnek’s workers’ compensation claim.

There was no breakdown of how much of that amount was covered by Tesla, and how much by the sub-contractor…but given Tesla’s statement on matter when it was discovered by the company, it appears Tesla footed much of the bill.

At Tesla, we aspire to operate on the principles of hard work and exceptional performance, but always tempered by fairness, justice and kindness. There are times when mistakes are made, but those are the standards to which we hold ourselves. With respect to the person at the center of this weekend’s article in the Mercury News, those standards were not met. We are taking action to address this individual’s situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.

Gregor Lesnik was brought to the Tesla factory by a company called ISM Vuzem, a sub-contractor brought in by Eisenmann, the firm that we hired to construct our new, high-volume paint shop. We contracted with Eisenmann for the simple reason that we do not know how to build paint shops and they are regarded as one of the best, if not the best, in the world. In our dealings with them, we have found them to be an excellent company, run by good people.

The article describes how Mr. Lesnik came to this country, the conditions under which Vuzem employed him and others to do their work, and how Mr. Lesnik ended up being injured while on the job. Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem. This is not a legal issue, it is a moral issue. As far as the law goes, Tesla did everything correctly. We hired a contractor to do a turnkey project at our factory and, as we always do in these situations, contractually obligated our contractor to comply with all laws in bringing in the resources they felt were needed to do the job.

Regarding the accident that resulted in Mr. Lesnik being injured, Cal/OSHA (the government regulator that investigates workplace accidents like these) came to our factory, investigated the incident and found that Tesla was not responsible. When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.

All of that is fine legally, but there is a larger point. Morally, we need to give Mr. Lesnik the benefit of the doubt and we need to take care of him. We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor, under the circumstances described in the article. If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable. Tesla is one of the highest paying hourly employers in the US automotive industry. We do this out of choice, because we think it is right. Nobody is making us do so.

Tesla will be working with Eisenmann and Vuzem to investigate this thoroughly. If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly.

Creating a new car company is extremely difficult and fraught with risk, but we will never be a company that by our action does, or by our inaction allows, the wrong thing to happen just to save money.

There have been no other official details of the settlement nor any news about whether or not Vuzem will face any legal issues based on the investigations.

Source: Teslarati, Mercury News

Categories: Tesla

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12 Comments on "Tesla Makes It Right, Settles Injured Foreign Worker Lawsuit"

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GO TESLA GO…you did the right thing.

Mr Lesnik is lucky to be alive after such a fall. Perhaps he can make a complete recovery, and the money can help ease his pain a bit.

Hopefully, opportunistic money grubbers don’t see this situation and then materialize with new injuries, with their hand out to Tesla. Walmart (for one) has seen that movie before.

Well done by Tesla! I’m sure they will pressure the Slovakian company to pay out the full salaries to these worker.

I have worked for many multinational companies and salaries differ from country to country. If the person works for a Slovakian company and simply traveled to the US to work on that project, he was likely being paid according to his contract from the original country. Nothing illegal here.

Nothing illegal?

How is the worker permitted to work in the US? Does he have a work visa? If yes, was there an abuse of the visa system? At $5/hr that does not meet the definition of a “skilled worker” under labor law.

Need to put a stop to these sort of crap.

It is illegal to employ a worker at a US location and not abide by US labor law.

If the workers were promised $12.70 per hour then that is what they shall have. This is a contract issue, they can’t just deny paying out at a whim. Add to that there are minimum salary laws and such, I don’t know what’s applicable in Nevada but $12.70 per hour seems reasonable, if not a bit low.

When I go to France to work for a couple of weeks, I know they get around 30 days of vacation a year, that doesn’t mean that I am not getting my full vacation days in the US because they are less. I don’t like it but I live in the US and the company still complies with the law here.

Slovenian, not Slovakian company.

It seems that Eisenmann is also investigating ISM Vuzem to ensure they paid the agreed to wage of $55/hour and look into why they didn’t meet Cal/OSHA requirements:

Here is the press release from Eisenmann:

Isn’t this called “Insourcing”?

From “The Campaign”
GLENN: Well, l got some more good news
for you, son.
We have purchased all the rights
and large tracts of land in your district…
…and we will be building three factories
that will generate 8000 jobs…
…and over a billion dollars of revenue
per annum.
Oh, my goodness.
And we immediately sold that real estate
and debt…
…to the People’s Republic
for a massive profit.
-l’m sorry, to who?
-Oh. The 14th district now belongs to China.
– Guess those jobs will be good
for the district.
– Actually, American workers
are paid way too much…
…for us to book the profits
we’re accustomed to.
We’ll be bringing in low-paid Chinese labor.
They’ll clock in at 50 cents an hour.
We call the concept “insourcing.”
And we want you to start using “insourcing”
in all your campaign speeches.
The word tested through the roof.
– lt just kind of seems like you’re building
a big sweatshop in Hammond.
You have factories in China.
Why are you gonna bring them here?
lt’ll save a fortune in shipping.
lt’ll double the already-doubled profits
that we make.

I feel for the guy, he’s got a tough recovery ahead of him.

Tesla will likely subrogate the settlement back to the rightful parties, and recoup much of the costs from Eisenmann, ISM Vuzem, and/or their insurers. Meanwhile, it good that this guy doesn’t have to get stuck in the middle while they all bicker for the next 3 years over who pays. Final payment to Eisenmann will likely have this amount withheld until this is resolved, and the same for the final payment to ISM Vuzem.