Nottbohm v. Tesla, Inc.

Background

Jorma Nottbohm brought employment-discrimination claims against Tesla, Inc. Tesla asked the court to compel arbitration under an employment contract. The contract contained an arbitration clause requiring the parties to arbitrate employment-related disputes through the JAMS arbitration service.

Waiver Argument

Nottbohm argued that Tesla waived, or gave up, its right to compel arbitration. He asserted that he had served Tesla with an arbitration demand by email and that Tesla then failed to act for about a year. The court explained that waiver requires proof that the party knew about its arbitration right and acted inconsistently with that right. The court also considers the party’s overall conduct, including delay and active litigation in court.

The court found that those circumstances were not present. Tesla had not sought to litigate the case in court. The record also did not show that a JAMS arbitration proceeding had formally begun, which raised questions about whether Tesla’s conduct caused the alleged delay. The court further noted that Nottbohm had sought arbitration of his employment claims from the beginning, showing that he understood the claims belonged in arbitration.

Other Filing

Nottbohm raised an additional assertion about factual and legal disputes concerning when Tesla offered him employment and when he accepted. He raised the issue for the first time in a sur-reply filed without the court’s permission and contrary to the district’s local rules and the court’s standing orders. The court said the filing could be disregarded and did not find that assertion sufficient to change the result.

Ruling and Case Status

The court ordered the case to arbitration, as Nottbohm had initially sought, and stayed the case in all other respects. The parties must file joint status reports every 90 days starting September 9, 2024. The court stated that either side may raise undue delays if developments warrant.