Tesla is currently being sued by an employee who claims to have been fired for blowing the whistle on the automaker selling back vehicles that were returned as “lemons.”

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The lawsuit is brought under the Conscientious Employee Protection Act (CEPA), which is supposed to protect whistleblowers, but Tesla argues that the employee in question, Adam Williams, was fired solely for performance reasons.

Williams had been working for Tesla since 2011 in several different positions, but he was most recently a “mobile manager” before being fired in September 2017.

In the lawsuit, Williams claims that he became aware that Tesla was taking back vehicles described as “lemons” from customers and selling them back to other customers as “used” or “loaner” cars.

He thought that the practice was either “illegal or fraudulent” and he claims to have reported it in “late 2016 or early 2017” to his local manager and Jerome Guillen, who is currently in charge of Tesla Semi but was also previously the head of sales and services and therefore, Williams’ former boss.

Instead of changing the practice, the lawsuit alleges that he was instead demoted on two different occasions in 2017 before being fired.

Tesla responded to the lawsuit in a statement:

“There’s no merit to this lawsuit. Mr. Williams’ description of how Tesla sells used or loaner vehicles is totally false and not how we do things at Tesla. It’s also at odds with the fact that we rank highest in customer satisfaction of any car brand, with more owners saying they’d buy a Tesla again than any other manufacturer. Mr. Williams was terminated at Tesla for performance reasons, not for any other reason.”

They are referring to them leading Consumer Reports’ owner satisfaction report for the third year in a row.

Here’s the lawsuit in full:

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Electrek’s Take

It’s another situation where it’s hard to know what exactly happened – a ‘he said she said’ type of scenario.

But the way I see it, Tesla was simply buying back cars that spent too much time in service and owners got fed up with completing the repair before selling them back.

It’s nothing new. We already know that early Tesla vehicles, especially the Model X in 2016, had several issues that needed a lot of service.

For the most part, most owners end up just going through all the service, but other get fed up and asked Tesla to buy back the car as a lemon.

Now, I think there’s definitely an argument to be made about Tesla disclosing the repairs made to the vehicle before selling them back for the sake of transparency, but I don’t think that there’s an actual problem labeling those vehicles as ‘used’ or ‘loaners’.

As for Williams being fired for complaining about it, I can’t comment about that since Tesla denies it and there’s no way to know for a fact at this point.

What do you think? Let us know in the comment section below.

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