Tesla’s direct-sales model helps thwart customer lawsuits

Ford maintains that arbitration is a better way to resolve disputes. Claims resolution “should be fair, expeditious, efficient and proportionate to the dispute,” Ian Thibodeau, a Ford spokesman, said in an email. “Arbitration often accomplishes these goals more quickly and effectively than the court system.”

In another recent case, however, a federal judge in Illinois denied a Subaru request to compel arbitration for an owner who had signed an arbitration agreement with a dealer. The owner claimed her privacy had been violated by Subaru technology designed to detect when drivers are paying attention. The judge ruled that an agreement between the dealer and the buyer does not apply to disputes with the manufacturer.

Tesla’s direct-sales model sets it apart from much of the industry, lawyers said.

“Tesla appears to be unique among automakers in using arbitration clauses to avoid liability in court,” said Donald Slavik, who represents Derrick Monet, whose wife Jenna Monet was killed when their Tesla hit a parked fire truck entering I-70 in Indiana.

A lawsuit filed by Mr. Monet, who was seriously injured, attributed the accident to Tesla’s Autopilot system, which can steer, brake and accelerate a car on its own. Tesla, which is contesting the lawsuit, has not yet attempted to force the case into arbitration. The company has claimed that Autopilot improves the safety of its cars.

Kristin Hull, chief executive of Nia Impact Capital, an investment firm, has urged Tesla to scrap forced employee arbitration, arguing that it hides issues investors should know about. In August, nearly 40 percent of shareholders supported a resolution proposed by Nia that would have directed Tesla to investigate whether enforced arbitration interferes with employees’ ability to seek redress for discrimination or other grievances.

“As investors, we have no insight into the corporate culture and what is happening,” says Dr. said Hull. “Managers are not held accountable.”

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