The Slovenian Who Fell 3 Stories Illegally Working On Tesla Paint Shop, & Tesla’s Response
Last May, a man by the name of Gregor Lesnik was working on the construction of the new paint shop at Tesla’s Fremont facility when he fell from the roof and broke both his legs, a number of his ribs, received a concussion, and tore ligaments in his knees.
Following the accident, Lesnik filed a lawsuit alleging that (courtesy of The Mercury News):
- Eisenmann USA wrote letters to the US Embassy on behalf of Lesnik and as many as 200 foreign workers stating they would supervise employees at a US auto plant. Most of the Vuzem workers were nonsupervisory laborers and tradesmen.
- Tesla issued company security badges to the foreign workers, recorded their time on site and shared responsibility for setting safety conditions.
- Vuzem required foreign employees to regularly work between 60 and 70 hours a week. Vuzem paid Lesnik an average of €800 per month, or about $900, for a rate of less than $5 per hour. Lesnik was promised an equal amount when he returned home, but the company never paid the balance.
- The companies violated wage and employment laws and benefitted from the cheap labor of foreign workers. Workers were promised $12.70 an hour based on a standard workweek. The suit estimates they are due $2.6 million in overtime and premium pay.
Perhaps not surprisingly, none of the contractors, nor Tesla, has accepted legal responsibility for the hours, for the costs of all of this, and for the (arguable) abuse of the B1/B2 visa system. The B1/B2 visa is a nonimmigrant visa for tourism and business that’s intended to allow foreigners the option of performing limited business/work within the US — it’s not intended (openly anyways) to be used as a means of bringing cheap construction labor into the country.
Here are further details:
Recruited by a small Slovenian company called ISM Vuzem, Lesnik, 42, and his co-workers were flown into the US for months at a time, housed in nondescript apartments, and shuttled to the Tesla plant six and sometimes seven days a week, according to workers and the suit.
While foreign workers can obtain B1 visas for supervisory duties, the workers at the Tesla plant were simply installing pipes and welding parts — hands-on work banned by the terms of their visas, according to immigration experts and court documents. Workers interviewed by this news organization said they have worked on jobs under similar arrangements around the country.
…The company overseeing Tesla’s expansion project — Eisenmann, a German-based manufacturer of industrial systems — also denied in court that it had legal responsibility for Lesnik. Vuzem acknowledged that it hired Lesnik but denies his claims. Tesla and Eisenmann won a preliminary effort to be removed from the lawsuit, but an Alameda County Superior Court judge has allowed Lesnik’s amended complaint against them to move forward.
…Eisenmann also helped with the paperwork. Court filings show Lesnik’s visa application included a letter to the US consulate from Robert Keller, Eisenmann’s Chicago area-based US purchasing manager who was also listed as Lesnik’s US contact. Keller wrote that Lesnik would be working for yet another European subcontractor with “specialized knowledge” of Eisenmann’s equipment to build a new paint shop for BMW in South Carolina. The visa application included a reservation at a Days Inn in South Carolina, and listed Lesnik as a “supervisor of electrical and mechanical installation.”
In the letter, Keller wrote: “His assignment will involve multiple border entries, but in no way adversely affect the employment of citizens of the United States.”
It should be noted here that, while Lesnik was apparently paid only around $5 an hour for his work, pay for equivalent work done by American citizens in the region could cost $52 an hour (or even more).
Tesla issued a public response to the article on its website, noting (amongst other things):
At Tesla, we aspire to operate on the principles of hard work and exceptional performance, but always tempered by fairness, justice and kindness. There are times when mistakes are made, but those are the standards to which we hold ourselves. With respect to the person at the center of this weekend’s article in the Mercury News, those standards were not met. We are taking action to address this individual’s situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.
…The article describes how Mr. Lesnik came to this country, the conditions under which Vuzem employed him and others to do their work, and how Mr. Lesnik ended up being injured while on the job. Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem. This is not a legal issue, it is a moral issue. As far as the law goes, Tesla did everything correctly. We hired a contractor to do a turnkey project at our factory and, as we always do in these situations, contractually obligated our contractor to comply with all laws in bringing in the resources they felt were needed to do the job.
…Tesla will be working with Eisenmann and Vuzem to investigate this thoroughly. If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly.
Tesla’s CEO Elon Musk commented publicly as well, before this press release, noting in a tweet that changes would be forthcoming:
Only heard about this today. Sounds like the wrong thing happened on many levels. Will investigate and make it right.
— Elon Musk (@elonmusk) May 16, 2016
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USA citizens work all around the world installing American Equipment because they understand and have special experience with specific items. this paint shop erection is similar, some components build overseas and assembled here, by contract. The technology and schedule is probably what Tesla needed, and I don’t think they would be shopping on the price to save labor costs. They should take no blame for any resulting problems, though their insurance would probably override any that they required the contractor/vendor to carry. The press makes assumptions based on their biased viewpoint, which is skewed and I can well imagine without knowledge of how business really works. Its a problem with people who simply write, contract or otherwise, to take a point of view and earn headlines and money. No real vetting required, or competence…..just sayin
I think the details didn’t come from the Merky news journalist. It likely came from the pleading section of the lawsuit and was crafted by lawyers representing Mr. Lesnik who are very familiar with California labor and professions code as well as prevailing business practices in Alameda and Santa Clara County. The article contains info that would likely only be available from formal discovery. From experience with this sort of work (I know nothing of this specific case), I can say this sure seems like an egregious violation and a departure from the norms of how state and federal laws are respected in the south bay. Somebody didn’t play ball and settle to keep this out of the papers.
The bigger story here is making large companies take proportionate responsibility for their contractors, subcontractors and suppliers. It’s been too easy for companies to absolve themselves of their duties to workers by outsourcing to flimsy subcontractors, who are blamed when things go wrong. Apple have been forced to put pressure on Foxconn to cut back on its harsh working conditions. Good.
True. I don’t have time to dig into it but Eisenmann isn’t a rinky-dink labor outsourcing operation. They are a long-running German company that builds complex plants, handling all the details. One could reasonably presume that they would be capable of following US and California law as required by the contract. So I doubt Tesla has any real significant exposure here, morally or legally. Any egg is really under Eisenmann and probably it’s sub’s face for breaking US immigration and California business & professions law.
Tesla sort of disagrees. They say they have no legal responsibility, which makes sense. They say they have a moral responsibility (not really moral exposure per se) to make things right.
They hired a contractor who didn’t stick to the terms of the contract. Tesla has the right to go after them, but not the obligation to do so. As to what sort of damages Tesla might claim, that’s a different story. Somebody has to make good on the money owed to the workers.
Eisenmann seems to have had their fingers deep in this, “helping with the paperwork”, writing dishonest letters to the US government, and so forth. Sounds like Eisenmann may be a seriously corrupt operation.
Tesla will have to find a different company to build their next building.
It wasn’t a building but the paint shop within the building. It’s essentially a stage of the assembly line that can handle cars passing through to get painted with the ability to handle 500,000 cars a year. The factory is incredibly huge and this is just one part of it.
The title reads illegally working ! I cannot imagine that is true, and see no proof. Alleged would be a more appropriate comment, less indication of bias.
res ipsa loquitur… the facts speak for themselves.
He’s doing electrical construction work in the United States on a “B” visa. Major facilities electrical work is being done by non-electricians. I can think of a dozen state and federal laws that this is breaking.
I’m a nerd and had to lean about building specialized facilities correctly the hard way – it isn’t something I ever wanted to do but it’s something I’ve had to do. It possibly isn’t Tesla’s legal fault depending on how much of the work was being done “inside” the contraption…. but the sub or sub-sub is certainly breaking the law.
I could also see that OSHA rules were violated, that may qualify for “illegal”.
Somebody who comes from Slovenia is a Slovene, from Serbia a Serb, from Argentina an Argentine. The unnecessary adjectival -ian ending in this context grates on my ears anyway. You don’t hear “Scotlandian”, do you?
So we should have Canades and Americenes?
“Argentine” has always bugged me. It sounds like a condescending colonialist is saying it. Argentinian seems to follow convention better.
Why not? It sounds refreshing! 🙂
No. If a person is from Canadia, we should call that person Canadian.
I’ve often wondered if people from Moscow are called Moscovites, then why aren’t people from Paris called Parasites?
The Michelin green guides to French regions used to tell you the right way to refer to the inhabitants of each town. Those from Saint-Dié are déodatiens, those from Pont-à-Mousson, moussipontins.
Ah ha… I was wondering how they were going to build the Model 3 for $35000.
Do you think their competitors in the US don’t do the same? I personally don’t know but from what I already read this side of the pond it might be a worldwide practice.
Yes. The guys next assignment was BMW in South Carolina.
alright…relax people this was an attempt at humor…
First off I believe Tesla never intended to use labor from people working in the U.S. illegally, or to abuse those working on its plant. On the other hand, it’s time we stop letting companies play the “sub-contractor” card to escape responsibility. These arrangements are created to dodge labor and other regulations. That loophole should be closed so that a company shares equal liability with its subcontractors for violations of labor, environmental and other regulations. It’s a risk of subcontracting, requiring oversight — just like all performance factors by a subcontractor. Companies somehow manage to oversee those other factors just fine.
That’s not accurate. If you want a paint shop, you hire contractors to do it because you have no experience building a paint shop and might never have to build one again. It’s not the type of thing you would hire qualified staff for. You’d have no need for them once the project was done. A contractor can design the paint shop, provide the parts and materials, and will have the expertise to put it together. They can’t simply ask people to step off the car assembly line, read blueprints and plans for putting together a paint shop, put it together and then get back to work on their regular job.
If they hired subcontractors to operate the paint shop and paint the cars, you’d have a point. But there’s no way I can see this as an attempt to dodge any regulations.
Tesla can actually sue Eisenmann for violating their contract with Tesla. And probably should. Is there a liquidated damages provision in the contract for the contractor violating federal and state law? I would have included one.
I have no idea whether Tesla had any specific provisions written into the contracts or how they will go about handling it. I don’t know how much is up to them and how much is up to the Alameda County District Attorney’s office. I hope a lot of it falls upon the latter. If the DOJ wants to get involved, so much the better. I would think Tesla would want to go after them on behalf of the workers. I’m assuming the paint shop itself is in good working order.
This, is unfortunately something that happens all of the time.
It’s much worse on larger scales too. Read up on the labor contracting issues of Halliburton and Kellogg Brown and Root (KBR). if you want to know the poor and tragic conditions of the workers that build and maintain American military bases overseas. Talk about no safety and the contractors even get beaten by their supervisors for messing up.
KBR has a nearly 100-year-long history of pure evil. They really should have been forcibly liquidated as a Racketeer Influenced Corrupt Organization and had their corporate charter revoked and their assets turned over to the government by now.
It is curious and funny, however, that although this practice is very very common, it seems only Tesla encourages people to create infographic videos about the problem.
Tesla has some powerful opponents because of what they do, and thus they are under extra scrutiny.
I want an iPhone made in China by a young girl working six days a week in 12-hour shifts.
I want a Lee Cooper blue jeans made in Bangladesh by a young boy working six days a week in 11-hour shifts.
I want a pair of Nike made in Pakistan by a child working six days a week in 12-hour shifts.
I want a JC Penney polo made in Bangladesh by a child working seven days a week in 12-hour shifts for 6 ½ cents an hour.
But I don’t want to see a Slovene man working, willingly, in California for $5 an hour (a payroll that was to be doubled once back in Slovenia) for ISM Vuzem, a Slovenian company, which is a subcontractor of Eisenmann, a German company, witch is the general contractor chosen by Tesla, an American car company, to upgrade its paint plant.
The video states the worker was “lured” and in my opinion it implies that Tesla lured him, but it was the subcontractor who hired him. It’s not clear that anyone “lured” him.
Tesla’s response seems appropriate. I have confidence that they will do right by Mr. Lesnik and the other foreign workers. It is my hope that they will do so.
Subcontractors cannot be trusted. Tesla’s learned this way too many times…
It wouldn’t have been realistic for them to build a paint shop from scratch without contractors. Tesla can write detailed contracts requiring contractors to do things, but if they violate laws behind Tesla’s back then there’s nothing Tesla can do until Tesla finds out.