Tesla Managers Explain Dismissal of Pro-Union Employee for Lying

(Bloomberg) -- Tesla Inc. managers suspected that firing a pro-union activist would draw extra attention -- and they were right. The episode is being examined again this week as the electric-car maker seeks to defend itself in a National Labor Relations Board trial in Oakland, California.

A regional director of the NLRB has alleged in a complaint that Tesla violated federal labor law when it terminated pro-union employee Richard Ortiz after he posted screenshots of co-workers from an internal human resources system, along with comments about workplace issues on a private employee-only Facebook page. The complaint alleged that Ortiz, as well as the co-worker who provided the screenshots, were illegally retaliated against for their activism with the United Auto Workers and that their punishments were meant to discourage other workers from getting involved.

Tesla has said the labor board allegations are false, and that Ortiz was lawfully discharged because he inappropriately used Tesla records to harass co-workers, and because he lied when questioned about it. Ortiz testified in June that during the investigation he withheld from Tesla the fact that he knew who sent him the screenshots because the sender, Jose Moran, was his friend and he didn’t want to get him in trouble. Moran received a warning from Tesla.

Tesla’s former director of body manufacturing and the company’s outgoing senior human resources director for production and supply chain testified Wednesday when called as company witnesses. Both said that Ricky Gecewich, who at the time was an employee-relations investigator, had recommended that Ortiz be terminated because he lied during his investigation.

Josh Hedges, the HR director, said that he sought the investigation after an employee whose photo was shared by Ortiz complained. The man had gone to the state capitol in Sacramento at Tesla’s invitation to speak favorably about the company to state legislators in response to a push for adverse legislation by the UAW.

‘More Scrutiny’

Hedges said that he suggested that Stephan Graminger, the manufacturing director, be the one to “make an objective decision” about what if any discipline was appropriate, rather than a lower-level manager.

“I knew that because of their position with the union, there could be more scrutiny to the decision,” Hedges said.

Graminger said that he chose to terminate Ortiz because he had lied in the investigation, and that his involvement in the union was “not at all” a factor. He said that before making the decision, he talked to his boss, Peter Hochholdinger, who told him that there had been similar cases in the past and that it was Tesla’s policy to terminate people who lie.

“My gut feeling told me it’s a sensitive case, so I wanted to talk to my boss,” Graminger testified.

Under cross-examination, Graminger, like Hedges, confirmed that Ortiz’s involvement in the union was what made the case a sensitive one. He said that before deciding to accept the recommendation to fire Ortiz, he didn’t review any specific Tesla policies about penalties for lying, and that he wasn’t aware of specific, official Tesla policies on the issue.

Union Apparel

On Thursday, to rebut NLRB allegations that Tesla violated labor law by restricting the wearing of union apparel and the distribution of union leaflets at work, Tesla presented witnesses from management who testified that the company had a policy restricting what was worn in production areas for the sake of avoiding mutilation of vehicles, and a policy allowing employees to distribute leaflets when they weren’t on the clock.

At one point, when the parties were sparring over whether a document offered by Tesla should be submitted into evidence, the judge alluded to the prospect of future years of litigation in the case.

“This will be appealed no matter what I decide,” said Amita Tracy, the administrative law judge.

To contact the reporter on this story: Josh Eidelson in Washington at jeidelson@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters, Lisa Wolfson

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