Did Tesla Try to Keep Its Customers Quiet About Repairs?
Tesla Motors has been at the center of a controversy in the past few days due to a document it reportedly asked several owners to sign following out-of-warranty repair work on their vehicles.
On Wednesday, the blog Daily Kanban found three Tesla owners who it reported were required to sign agreements promising to not “aid in any action at law or in equity or any legal proceeding against Tesla” related to a particular incident. One of the Tesla owners claimed to have signed the document after the company fixed a broken suspension component on a Model S.
The blog post described these “Goodwill Agreement and Release” documents as so restrictive that they could potentially bar Tesla owners who had their vehicles repaired from reporting the incidents to the National Highway Traffic Safety Administration (NHTSA), which tracks and investigates automotive safety issues.
In a statement, NHTSA said it "learned of Tesla’s troublesome nondisclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and NHTSA expects Tesla to eliminate any such language.”
Tesla Motors wrote in a blog post that it was "preposterous" to assume the agreement precluded customers from contacting regulators.
According to Consumer Reports analyst Mel Yu, agreements that limit disclosure are commonly used by automakers and other large corporations, although Tesla's seemed more restrictive.
In his previous job as an industry consultant, Yu dealt with a lot of cases involving these agreements. The nondisclosure restrictions are something companies employ to keep other affected product owners from using the original settlement terms as starting points lawsuits. Typically, however, only the financial details of a settlement are restricted.
Consumer Reports contacted David Bright, a automotive product-liability trial lawyer based in Corpus Christi, Texas, who agreed that the Goodwill Agreement and Release was unusual, especially since the suspension issue in one of the cases was already part of a Technical Service Bulletin posted on NHTSA's safercar.gov website.
“In 30 years of practicing law and countless settlements, I have never had a client sign anything like that," said Bright. "This is a settlement that says you can’t talk about the facts about what was wrong and what was complained about? You can’t put the toothpaste back in the tube.”
Because the information is already on NHTSA's site, “It's therefore public, so no one can penalize you for making it more public, for talking about something that is openly and legally on the internet. It’s not a violation of privacy or valid protective order,” Bright said.
What’s more, most nondisclosure agreements include a protective order, Bright said, that allows plaintiffs to share details of the case—but not the settlement itself—with other attorneys or the government, without violating the terms of the agreement.
Said Bright: “But if they are trying to get him to not talk to the government, that just stinks.”
When Consumer Reports emailed Tesla for clarification about the language in the agreement, a spokeswoman replied that the company had now taken care of the issue.
"The Goodwill Agreement has nothing to do with preventing customers from contacting NHTSA and any interpretation along those lines is wrong," she wrote in an email. "The point of the Goodwill Agreement is to benefit customers, while not harming us for doing a good deed. But, to remove any doubt, we are modifying the agreement to expressly state that it has no impact on the customer’s rights to communicate fully with any governmental agency. We have already addressed this with NHTSA, and they have told us the issue is resolved."
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