Elon Musk vs Lawsuits: A look at all major legal battles facing the tech billionaire and his companies

The laundry list of lawsuits against Elon Musk and his companies continues to grow — ranging from sexual harassment complaints to massive job cuts, stock manipulation and bloated pay packages. We take a look at the legal battles facing the tech billionaire.

Jocelyn Fernandes
First Published13 Jun 2024, 12:58 PM IST
A breakdown of the major legal battles faced by the Elon Musk and his companies - Tesla, SpaceX and X (Twitter).
A breakdown of the major legal battles faced by the Elon Musk and his companies - Tesla, SpaceX and X (Twitter).(Getty Images via AFP)

Billionaire Elon Musk is facing an ever-increasing line-up of lawsuits regarding his work practices, sexual harassment, mass firings, executive pay demands, and allegations of stock manipulation for corporate acquisition.

As the laundry list grows, we list all the lawsuits Musk and his companies are battling.

A Breakdown of Elon Musk's Mounting Legal Battles - in 2024

  • Ex-SpaceX workers sue Musk for sexual harassment, wrongful firing: Eight former SpaceX employees filed a lawsuit on June 12, accusing Elon Musk of fostering a sexist "Dark Ages" culture at the company, newswire AFP reported. It claims a hostile work environment with allegations of sexual harassment, discrimination, and retaliation, leading to the firing of eight former workers in 2022. The civil complaint, lodged in a Los Angeles court, claims the workers were terminated after they published an open letter expressing their concerns and urging SpaceX's board to distance itself from Musk.
  • Elon Musk's Tesla insider trading lawsuit: Tesla shareholder Michael Perry has filed a lawsuit in the Delaware Chancery Court in June 2024, accusing Musk of insider trading, another wire agency Reuters reported. Perry alleges that Musk sold over $7.5 billion of shares of the electric car maker in late 2022 before potentially disappointing production and delivery numbers were made public. The company's share price sank after Q4 numbers were made public on January 2, 2023, and Perry claimed that Musk "improperly benefited" by about $3 billion in insider profits. The lawsuit also accused Tesla's directors of breaching their fiduciary duty by allowing Musk to sell the shares.
  • Elon Musk's pay package, Tesla move to Texas: Tesla Inc. shareholder Donald Ball has sued to challenge an upcoming proxy vote about whether the electric car maker should move its corporate home to Texas and re-approve a $56 billion pay package for Musk that was thrown out by a Delaware judge, Bloomberg reported in June 2024. Ball owns over 28,000 Tesla shares and argued that the company was violating its corporate charter by saying that it needed only a bare majority of shareholders’ votes in the June 13 proxy fight to move its state of incorporation away from Delaware. The shareholder has alleged that Musk is trying to force investors into voting for the Texas move and his resurrected pay package with threats about shifting artificial intelligence assets away from Tesla.
  • Tesla Autopilot probe: In May 2024, Reuters reported that United States prosecutors are investigating whether Tesla committed securities or wire fraud by misleading investors and consumers about its electric vehicle (EV) self-driving capabilities. The report cited three sources that say the US Justice Department is scrutinising statements by Tesla and CEO Elon Musk that imply the cars can drive themselves. Tesla's Autopilot and Full Self-Driving (FSD) systems assist with steering, braking, and lane changes, but they are not fully autonomous. The probe itself does not confirm wrongdoing and could lead to criminal charges, civil penalties, or no action.
  • Lawsuit alleges Musk ‘secretly acquired’ Twitter stock: A shareholder lawsuit filed in May 2024 claims that Musk secretly acquired a major stake in Twitter in early 2022 before eventually buying it. It alleges that he did so with the help of a Morgan Stanley banker who advised the billionaire on how to avoid alerting the broader market. An Oklahoma public pension fund claims Musk’s delay in disclosing his ownership of more than 5% of the social media company artificially kept its share price down, as per a Bloomberg report. Musk was able to acquire more than 9% of Twitter without triggering a major stock price hike, which eventually happened once his ownership stake became public, according to the complaint.
  • Elon Musk's use of recreational drugs: A shareholder lawsuit has claimed that Musk's illicit use of recreational drugs threatens Tesla’s business and influences his sometimes erratic behaviour online. This came after the Wall Street Journal in February reported that Musk often uses LSD, cocaine, ecstasy and psychedelic mushrooms with Tesla board members at private parties. Then, in March 2024, Musk admitted to using the prescription ketamine and said that this is "beneficial for investors", adding that it helps him manage a "negative chemical state" similar to depression.

In 2023...

  • Tesla racism lawsuit: As many as 240 workers have filed a class action lawsuit alleging rampant racial discrimination at Tesla's California factory, AP reported in June 2023. They alleged facing frequent racial slurs from their co-workers and said the site was referred to as a "slave ship" by many. AP said as many as 6,000 workers who were contractors and employees at Tesla's Fremont factory between 2016 and the present are likely part of the class lawsuit. The testimonies were filed in Alameda County Superior Court in California. Notably, in April 2023, a federal jury awarded another former Tesla employee $3.2 million for racial abuse suffered.
  • Lawsuit alleging insider trading by Elon Musk in Dogecoin: Investors filed a class action lawsuit against Musk in June 2023 for alleged insider trading and manipulation of the cryptocurrency Dogecoin, which cost them billions of dollars. The investors have told the Manhattan federal court that Musk used Twitter posts, paid online influencers, and ‘publicity stunts’ on NBC's "Saturday Night Live" to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls. They accused him of deliberately driving up Dogecoin's price by more than 36,000 per cent over two years and then letting it crash.
  • Lawsuit claims Twitter owes ex-employees $500 million in severance: In 2023, former Twitter senior engineer Chris Woodfield filed a class action lawsuit claiming the company owes former workers at least $500 million in severance pay. He also alleged that Twitter targeted older workers for layoffs, though the complaint does not state his age. This is the third such lawsuit against the company after Elon Musk mass-fired staff following his takeover. In 2024, four former Twitter execs, including former CEO Parag Agarwal, sued Musk for $128 million in unpaid severance payments.

Older...

  • Tesla false advertising lawsuits: Bloomberg reported that Tesla faces numerous lawsuits claiming false advertisements to consumers, including inflating how far its EV drives on a charge and over-hyping its driving-assistance capabilities.
  • JPMorgan sues Tesla: In November 2021, JPMorgan Chase sued Tesla for a series of stock warrant transactions impacted by Musk’s brief attempt to take the company private three years ago. JPMorgan is seeking a $162 million payout, claiming Tesla has shorted the bank what it’s due, as per a Bloomberg report. Musk's 2018 tweet claiming he would take Tesla private is central to the case.
  • Elon Musk's Anti-Labour Union posts: A US Court ruled that Musk committed a series of violations of the National Labor Relations Act in 2017 and 2018 when he tweeted and threatened employees that they would lose their stock options if they formed a union. The US National Labor Relations Board called the tweet illegal and said it should be deleted. According to Bloomberg, a 17-judge panel is reviewing the board's findings, which would likely boost the morale of labour activists and Tesla workers.
  • Musk accused of pushing Twitter price down: In May 2022, a Twitter investor, William Heresniak, filed a lawsuit accusing Musk of pushing down Twitter's stock price to either give himself an escape hatch from his $44 billion buyout bid or room to negotiate a discount. The suit alleges Musk of tweeting and making statements that created doubt about his takeover, which in turn roiled the social media platform's stocks for weeks. Musk negotiated his Twitter buyout in late April without carrying out due diligence expected in such megadeals, Heresniak alleged.
  • Allegations of unpaid bills: X is facing multiple lawsuits for failing to pay landlords and vendors after Musk's takeover of Twitter. The suits alleged cost-cutting has led to non-payments and cited millions of dollars in unpaid expenses, Bloomberg reported.

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First Published:13 Jun 2024, 12:58 PM IST
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