Tesla Forced Employees to ‘Renew Their Vows’ to the Company with a Confidentiality Agreement After Media Leaks

• Tesla faced a legal challenge over its confidentiality agreement.

• The document, implemented in November 2016, was created in response to leaks.

• The company’s legal vice president had asked employees to “renew their vows” to Tesla.

• Workers claimed the agreement “intimidated employees and discouraged them from freely exercising their rights.”

• The complaint alleged that the agreement hindered their ability to unionize.

• Tesla denied the allegations, stating that the agreement had nothing to do with unions.

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Back in 2018, Tesla was embroiled in a legal dispute over a confidentiality agreement introduced two years earlier, in November 2016. The agreement had been drafted in response to repeated leaks and required employees to “renew their vows” to the company.

The document became the subject of a National Labor Relations Board (NLRB) investigation, as reports at the time suggested it was being used to intimidate employees and restrict union activity, Bloomberg reported.

Jonathan Chang, who was Tesla’s legal vice president at the time, testified before the NLRB in 2018, explaining that repeated media leaks could negatively impact consumer perception. He argued that premature revelations about new features or models could delay purchases and diminish the excitement surrounding Tesla’s official announcements.

The agreement was influenced by articles published in Bloomberg and CNN in September 2016, which were based on emails sent by Elon Musk to all Tesla employees.

Chang also warned that leaks posed “serious SEC concerns” and admitted that, in rare cases where Tesla had managed to identify a leaker, the company had pursued criminal charges.

Despite using metadata to track leaks, Tesla was often unsuccessful in identifying those responsible.

A Complaint Over Intimidation and Union Rights Violations

A complaint filed against Tesla in April 2017 accused the company of using the agreement to “coerce and intimidate employees, preventing them from freely exercising their rights to engage in concerted and union activities.”

According to the complainants, from February 10, 2017, Tesla had allegedly intimidated a group of employees and conducted both real and simulated surveillance on them.

The complaint claimed these actions were motivated by the “union activities and/or union sentiments” of certain employees. Their activities included distributing literature about union organizing efforts, working conditions, the confidentiality agreement, and their rights under the National Labor Relations Act.

It further alleged that Tesla had monitored employees who received these materials.

On March 23, 2017, workers were reportedly told they could not distribute literature without prior company approval, Politico reported at the time.

Michael Sanchez, a Tesla employee named in the complaint, spoke out against the agreement.

“You can’t fix problems if you’re not allowed to talk about them,” he said. “The confidentiality agreement we were required to sign went too far. We should have the right to share information with our coworkers without fear of intimidation.”

Tesla Denied the Allegations and Blamed Union Tactics

Tesla firmly denied the allegations, arguing in a 2018 statement that the complaint was part of a broader union effort to damage its reputation.

“One of the main tactics of a UAW (United Automobile Workers) corporate campaign is to overwhelm the NLRB with unfair labor practice charges (ULPs) against the companies it targets,” the company stated.

“Each year, about 20,000 ULPs are filed with the NLRB by unions like the UAW. In our case, many of the charges made by the UAW against Tesla were previously dismissed or otherwise not pursued by the NLRB.”

Tesla maintained that it was not interfering with employees’ right to unionize, insisting that “the only reason there’s no union at Tesla is that our employees haven’t wanted one.”

“The UAW’s argument revolves around the idea that our actions have created a chilling effect on their ability to organize. However, it’s clear from employees’ own admissions that this is not true. Their unionization effort, including talking to media, leafletting, and picketing outside the factory, has continued without interference.”

Tesla claimed that the confidentiality agreement “had nothing at all to do with stopping unionization.”

“It was about preventing proprietary information from being misused outside the company - something that, unfortunately, was happening regularly,” the statement read.

Jonathan Chang had defended the agreement, stating that Tesla provided employees with access to confidential product and financial information because “Tesla’s culture was built on a sense of family and trust among employees.”

A Case That Reflected the Broader Battle Between Tesla and Unions

In March 2021, the NLRB ruled that Tesla’s confidentiality agreement, which prohibited employees from communicating with the media without authorization, violated Section 8(a)(1) of the National Labor Relations Act. The Board found that this provision could be interpreted as restricting employees’ rights to engage in protected concerted activities, including discussions about working conditions and unionization efforts.