TESLA MOTORS, INC. | Respect for Freedom of Association and Collective Bargaining at TESLA MOTORS, INC.

Status
Omitted
AGM date
Previous AGM date
Resolution details
Company ticker
TSLA
Lead filer
Domini Impact Investments
Co-filers
SOC Investment Group, SHARE - Shareholder Association for Research & Education
Resolution ask
Adopt or amend a policy
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: the Board of Directors of Tesla, Inc. to adopt and publicly disclose a policy on its commitment to respect the rights to freedom of association and collective bargaining in its operations, as reflected in the International Labour Organization Declaration on Fundamental Principles and Rights at Work (“Fundamental Principles”). The policy should:
- Be applicable to Tesla’s direct operations and subsidiaries globally;
- Include a commitment to non-interference when employees exercise their right to form or join trade unions;
- Prohibit any member of management or agent of Tesla from undermining the right to form or join trade unions or pressuring any employee from exercising this right;
- Describe the ongoing due diligence process Tesla will use to identify, prevent, mitigate and account for any violations of these rights, including how it will remedy any misaligned practices.
Supporting statement
SUPPORTING STATEMENT: Freedom of association and collective bargaining are fundamental human rights protected by international legal standards including the Fundamental Principles and the United Nations Universal Declaration of Human Rights.
While Tesla’s Supplier Code of Conduct articulates its expectations for suppliers to respect these fundamental rights, Tesla does not have any corresponding policy commitments for its own operations, nor has it demonstrated how it would effectively operationalize such a commitment.
Tesla has been accused of interfering with workers’ freedom of association rights through tactics of surveillance, intimidation, and retaliation against employees involved in unionization efforts.1 In 2021, the National Labor Relations Board upheld a 2019 ruling that Tesla illegally fired a worker in retaliation for union organizing, and that the CEO had illegally threatened workers regarding unionization.2
Allegations of poor working conditions have been mounting for years at Tesla. Tesla faces two class action lawsuits from workers and a lawsuit from the California Department of Fair Employment and Housing alleging rampant workplace racial harassment and discrimination.3 Since 2021, at least seven current or former employees have sued Tesla over workplace sexual harassment.4 Workers have accused Tesla of wage theft and falsifying safety documents.5 Investigations by regulators and the media have found safety problems in Tesla factories.6
Such reports represent material reputational, legal, and operational risks to its shareholders. Allegations of interference with unionization efforts, and resulting regulatory enforcement, at other companies further demonstrate the significance of these risks.7 The ability of workers to organize, act concertedly, and engage in collective bargaining is an important human right that can be a net positive for companies and investors. Unionization has been shown to support an equitable and inclusive workplace, increase productivity, decrease turnover, improve health and safety, boost innovation, and strengthen responsible business conduct.8
The transition to a low-carbon future cannot come at the expense of workers’ fundamental human rights. A public commitment from Tesla to respect its workers’ labor rights would help address concerns about reputational, legal, and operational risk, protecting long-term shareholder value. 
1 https://www.cnbc.com/2022/06/02/tesla-paid-pr-firm-to-surveil-employees-on-facebook-in-2017-union- push.html; https://www.theguardian.com/technology/2018/sep/10/tesla-workers-union-elon-musk; https://www.cnbc.com/2017/04/25/workers-involved-in-union-activities-say-tesla-is-illegally-intimidating- them.html2 https://www.nytimes.com/2021/03/25/business/musk-labor-board.html3 https://www.bloomberg.com/news/articles/2022-12-15/tesla-hotbed-of-racism-lawsuit-gains-momentum-in- california?sref=cdlcj118; https://arstechnica.com/tech-policy/2022/07/lawsuit-at-tesla-racial-discrimination-is- standard-operating-procedure/; https://calcivilrights.ca.gov/wp- content/uploads/sites/32/2022/02/TeslaPR2.10.22.pdf4 https://www.rollingstone.com/culture/culture-features/tesla-sexual-harassment-lawsuit-investigation-elon- musk-1234590697/5 https://www.tpr.org/technology-entrepreneurship/2022-11-16/workers-who-built-tesla-gigafactory-in-austin- accuse-employers-of-wage-theft-osha-violations6 https://www.businessinsider.com/tesla-factory-injuries-incomplete-records-osha-california-2020-3; https://www.forbes.com/sites/alanohnsman/2019/03/01/tesla-safety-violations-dwarf-big-us-auto-plants-in- aftermath-of-musks-model-3-push/?sh=11e913e954ce7 https://www.vice.com/en/article/bvmbpa/starbucks-union-nlrb-cease-and-desist; https://www.theguardian.com/technology/2022/nov/28/amazon-staten-island-new-york-retaliation8 https://www.ipa-involve.com/Handlers/Download.ashx?IDMF=e0209cd6-05d5-414a-ac22-c1d61af403f7; https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/--- publ/documents/publication/wcms_842807.pdf; https://www.theglobaldeal.com/resources/The%20Business%20Case%20for%20Social%20Dialogue_FINAL.pdf; https://www.oecd.org/employment/negotiating-our-way-up-1fd2da34-en.htm

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