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Fired federal investigators supported adviser's claim against JPMorgan
https://www.financial-planning.com/news/ex-federal-investigators-supported-rias-whistleblower-claim-against-jpmorgan
By Ann Marsh


Two former federal investigators say they supported a whistleblower claim by former JPMorgan Chase broker Johnny Burris about the systematic pushing of high-priced investment products – that is, before they, too, were fired.

The handling of Burris’ case points to broader problems that go back nearly three decades with the federal government's failure to protect whistleblowers in financial services, as well as other industries. The path Burris has followed as a whistleblower is the same one traced by dozens, if not hundreds, of other whistleblowers in financial services – such as the Wells Fargo employees who sought to expose the bank's practice of opening fraudulent client accounts – in seeking both redress and protection under federal laws.

Three years after he first alerted the government about the problems at JPMorgan and his firing, Burris finds himself stuck in limbo – unsure if and when he will receive compensation or protection from the federal government under whistleblower laws.

One year ago, JPMorgan admitted wrongdoing for engaging in a nationwide sales practice that caused "significant harm" to clients, according to the SEC. The firm paid $307 million in regulatory penalties, not for actions in the Burris case specifically, but for the same kind of product pushing that he accused the bank of engaging in three years earlier. The case was the SEC’s largest last year and the fines paid by JPMorgan were substantially higher than the $185 million Wells Fargo paid in regulatory penalties over the unauthorized accounts.

Darrell Whitman, a former Department of Labor investigator who handled Burris' case in 2014, says "the evidence clearly supports a merit finding." A merit finding could force JPMorgan to rehire Burris, give him back pay and, possibly, other damages, according to whistleblower laws.

But Whitman says he was fired from his position in the Whistleblower Protection Program at the DoL’s Occupational Safety and Health Administration in May 2015 before the case was finalized.

'THE PROCESS IS BROKEN'

Susan Kamlet, a former assistant U.S. attorney in San Francisco who took over the OSHA investigation after Whitman's departure, says she found the evidence that Burris presented "extraordinary." But she, too, says she was fired, in January, before she could complete her investigation.

"Whistleblowers have no viable way of complaining and getting justice," Kamlet says. "The process is broken."

Kamlet and Whitman allege they were pushed out of their jobs, not specifically because of the Burris case, but as part of a pattern of abuse by OSHA officials that has kept whistleblowers from receiving protection due them under the law. In total, six investigators were fired or left a toxic work environment at the San Francisco OSHA office between 2010 and this year, according to Tom Devine, an attorney representing Whitman.



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Darrell Whitman, a former investigator with the Whistleblower Protection Program at OSHA, has turned whistleblower himself. His case against OSHA awaits a decision from the Office of Special Counsel.
JPMorgan and OSHA officials declined to comment on the Burris case or the investigators’ allegations. Aides to U.S. Labor Secretary Tom Perez provided the following statement in response to questions about the Burris case and whistleblower issues involving JPMorgan as well as Wells Fargo: "As our review of all matters related to Wells Fargo proceeds, we are also taking the opportunity to look for ways to strengthen the whistleblower program so we can continue to improve our efforts to protect workers from being retaliated against on the job."

In recent years, Wells Fargo opened more than 2 million accounts for clients who had not authorized them, according to the federal Consumer Financial Protection Bureau. The revelation riveted national attention this year and led to the departure of Wells Fargo CEO John Stumpf in September.

Following numerous complaints about intense product pushing at Wells Fargo and alleged retaliation against employees who sounded alarms about the practice, the Labor Department said in September it would investigate its whistleblower program nationwide.

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Burris, once a top producer in JPMorgan's office in Sun City West, Arizona, complained that he faced pressure from his superiors to put elderly and unsuspecting clients' retirement savings into high-commission bank products that Burris says were inappropriate for them. Months after he alleged he was being pushed to breach a fiduciary duty to those clients, the bank fired him in November 2012. Burris, now an independent adviser in Surprise, Arizona, later filed whistleblower complaints with several regulators, including OSHA.

A third former OSHA investigator who worked alongside Kamlet and Whitman also says that protections for whistleblowers have broken down at the Labor Department. The investigator asked to remain anonymous for fear of career repercussions.

INVESTIGATORS: REMOVE PROGRAM FROM OSHA

The three former investigators recommend that the whistleblower program should be taken out of OSHA and run independently.

"This is a really common feeling among investigators," the third investigator says, in reference to the approximately 90 full-time investigators nationwide. "There is nothing preventing the government from creating an entirely new whistleblower protection program that stands on its own, in the model of the Office of Special Counsel or another agency that is independent doing whistleblower protection cases."

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Susan Kamlet, a former investigator who spent nearly a decade with the Whistleblower Protection Program at OSHA, says "the process is broken."
Experts have long wanted to see whistleblower protection taken out of OSHA, says Devine, legal director of the Government Accountability Project, an advocacy group that has represented whistleblowers against the federal government since the late 1970s.

The unauthorized accounts scandal at Wells Fargo offers an object lesson as to why, he adds.

Of the hundreds of cases that Kamlet and Whitman handled, some were claims made by Wells Fargo whistleblowers who complained about the long-running fraud there years before it made headlines.


Like Burris, most of the Wells Fargo whistleblowers did not receive the protection to which they should have been entitled, Kamlet and Whitman say.

"They weren't just not protected, they were ignored," Whitman says.

Through its whistleblower program, OSHA collects reports of fraud or other problems across almost all of the country's largest industries, under 22 separate statutes through 33 regional offices. The statutes cover financial services, as well as the transportation, aviation, nuclear safety, trucking, food and drug industries.

"OSHA’s whistleblower statutes protect you from retaliation," the program website assures the public. The agency lists 11 actions that employers may not take against whistleblowers, including: firing or layoff, blacklisting or demoting, denying overtime or promotion, disciplining, denial of benefits, failure to hire or rehire, intimidation or harassment, making threats, reassignment affecting prospects for promotion and reducing pay or hours.

By law, whistleblowers are supposed to receive protection even from subtle forms of retaliation, such as not being invited to an office Christmas party, Whitman says.

'MISTAKENLY THINK THEY HAVE PROTECTION'

"People have heard of protection laws," the third investigator says. "They mistakenly think they have protection. Instead, when they file a complaint and try to seek protection, most of the time they are not going to get it. And the companies just see settlements as the cost of doing business. They have insurance. They don't care."

A 2010 report by the U.S. Government Accountability Office found widespread problems with OSHA's whistleblowing program going back 20 years. OSHA's own statistics show that less than 2% of all complaints have resulted in merit findings over the past decade.

However, Whitman says as many as a third of all whistleblowers whose cases are reviewed by the program deserve protection.

Whistleblower laws are designed to protect complainants even when there is only a reasonable belief there has been a violation of law, according to Richard Moberly, a whistleblower expert at the University of Nebraska's College of Law. More simply, protection is supposed to kick in even in cases where it is later determined that no wrongdoing has occurred.

Instead of protecting whistleblowers, however, OSHA's supervisors routinely sit on cases for years without taking action, even after its investigators recommend merit findings, Kamlet and Whitman say. Burris filed his case in 2013.

JPMorgan Chase fired Johnny Burris months after he complained that he was being pressured to breach a fiduciary duty to his clients.
In other instances, the former investigators allege, supervisors push whistleblowers to settle with their former employers for small sums of money that remain confidential. These settlements may allow mismanagement or wrongdoing to continue after the whistleblowing cases are closed, the former investigators say.

After discovering that both of the OSHA investigators handling his case had been pushed out of their jobs, Burris complained to Perez via email on Oct. 20. A week later, Joshua Paul, a supervisor in the San Francisco office of the Whistleblower Protection Program, contacted Burris to say his case had been elevated to "top priority" status, according to Burris.

Kamlet and Whitman question whether Paul is capable of giving Burris’ complaint a fair review. They say Paul made it difficult for them to do their jobs before firing them and created a work environment that drove other investigators to quit.

When reached by phone, Paul said, "I'm not going to be responding" to questions about Burris' case or any of his former employees. He referred questions to the Department of Labor, which didn't reply beyond the statement on Perez's behalf.

'COLLABORATING' WITH CORPORATIONS

In an affidavit that is part of his lawsuit against OSHA with the Office of Special Counsel, Whitman accuses Paul of giving corporate defendants preferential treatment on cases.

"They are collaborating on cases with major corporations – flat out," Whitman says.

Kamlet says she did not see direct evidence of that. However she says that, following the economic downturn, pressure mounted at OSHA to dispense quickly with caseloads. As part of that process, according to Kamlet, Paul routinely engaged in negotiations with corporations in order to achieve settlements.

In his affidavit, Whitman alleges that Paul attempted to "substitute settlements for investigations." He further alleges in the affidavit that, in cases where Whitman recommended merit findings based on evidence that employees had been fired or otherwise targeted for retaliation specifically because of their whistleblowing, Paul engaged in conversations with defendants' lawyers – without informing the complainants, their lawyers or Whitman. He then denied merit findings in violation of the procedures outlined by the program's Whistleblower Investigations Manual, according to the affidavit.

Whitman says he unsuccessfully recommended merit findings in 19 cases, three of which concerned allegations of: generating false results in asbestos testing, unqualified and potentially inaccurate weather information provided to pilots, and a failure to conduct proper maintenance of aircraft in violation of FAA regulations by a major delivery company.

Paul repeatedly rewrote Whitman's reports to alter or remove factual evidence, Whitman says in the affidavit. In the case involving aircraft maintenance, for example, the affidavit says Paul rewrote his report "to make a convoluted argument that, because the company gave the complainant a commendation in the midst of the dispute, the company could avoid a merit recommendation. There was no legitimate reason for this argument."

'RUSHES TO JUDGMENT'

In a 2007 article in The William & Mary Law Review about OSHA's whistleblower program, Moberly, the whistleblower expert, wrote that investigators often failed to gather evidence from complainants or failed to allow complainants to respond to an employer's version of events.

"I worry more about rushes to judgment, quick decisions for the employer, where [OSHA] didn't go back to talk to the complainant," says Moberly, who was not aware of the Burris and Whitman cases. However, he says he thought OSHA had addressed this problem since 2007.

Since the departures of the six investigators, the likelihood of any whistleblower gaining a merit finding has dropped considerably, the three former investigators believe. Those investigators, all of whom hold law degrees, were replaced by military veterans without legal backgrounds, Whitman and Kamlet say.

Whitman's five former investigator colleagues in the whistleblower program, including Kamlet, have said they will support his pending case against OSHA with the Office of Special Counsel, Devine says.

"The program was a caricature of whistleblower protection," Devine says. "It basically served as a rubber stamp for corporate retaliation."

When it comes to the Labor Department's ongoing review of its whistleblowing program, neither Kamlet nor Whitman expect it to produce meaningful change.

"This study is nothing but CYA," Whitman alleges. He pointed to the GAO studies that have found that problems with the program have not been rectified in the decades since they were identified.

Stephen Kohn, a lawyer and one of the country's foremost whistleblower experts who represented a UBS whistleblower in a 2012 case that produced the largest IRS whistleblower award to date at $104 million, lays some of the blame at Perez's feet.

"He is not a whistleblower guy," Kohn says.

Kohn and Devine point to a controversy that arose in 2013 during Perez's confirmation hearings for his nomination as secretary. Republican members of Congress, including Iowa Sen. Chuck Grassley and California Rep. Darrell Issa, accused Perez of betraying a whistleblower named Frederick Newell while Perez was an assistant attorney general at the Justice Department. They claimedPerez dropped DoJ support for Newell in a quid pro quo to resolve another lawsuit – essentially allowing political expediency to quash a whistleblowing complaint that they contend might have been rewarded with millions of dollars.

During the hearings, Perez countered that senior officials in the department's civil division concluded Newell's case was "weak." All the decisions made surrounding it served "the interest of justice," he added.

Not all whistleblower advocates agree.

"Some people understand that whistleblowing is key to fraud detection," says Kohn, "and some people are afraid of whistleblowers and just don't like them."

'RIDE THE WHITE HORSE'

Kamlet says she falls in the former camp. The opportunity to work with whistleblowers proved compelling enough to persuade her in 2007 to take the OSHA job, even though it was below her skill and experience level. Kamlet spent 14 years as an assistant U.S. attorney first in Washington and then in San Francisco until 2001. She left her own private practice in Oakland, California, to become a whistleblower investigator.

"It was a chance to ride the white horse," she says.

For a number of years, she worked without conflict with her supervisor, Paul, according to four satisfactory or superlative performance evaluations from 2008 to 2012 reviewed by Financial Planning. Their relationship degenerated as Kamlet, partly due to a medical condition, failed to keep pace with Paul's mandate to rapidly close a rising number of cases, she says. In 2008, Kamlet handled an average of 14 cases at any given time, versus 51 cases by 2011, according to her performance evaluation that year.

During her eight years as an investigator, she says only about 10 of the more than 100 cases she handled resulted in merit findings.

Burris' case looked like it might have become one of them. Burris produced an unusual amount of strong evidence, including secret recordings of his superiors pressuring him to inappropriately favor the banks' products as well as internal documents, she says. In addition to finding the evidence persuasive, she says she found Burris "credible."

Some of Burris' supporters thought the SEC might give Burris a whistleblower award after JPMorgan paid $307 million in regulatory fines for the same transgressions he accused the bank of committing.

Instead, while the SEC is saying nothing about his award prospects (the commission keeps the identities of all whistleblowers and their cases confidential), another regulator, FINRA, filed a complaint against him on behalf of JPMorgan in September. It accuses him of causing a client to lose the relatively small sum of $624 four years ago. Burris has a signed affidavit from that client saying he never complained about him. Burris estimates it could cost him $60,000 to defend himself in the case.

"The complaint speaks for itself," FINRA spokeswoman Michelle Ong wrote in an email. "These are very serious violations." Ong would not elaborate on why FINRA regards the matter as "very serious."

'CLEAR AND CONVINCING' EVIDENCE

JPMorgan's rationale for firing Burris has never surmounted the "clear and convincing" evidence bar established by whistleblower laws, Whitman and Devine say.

The fact that JPMorgan fired Burris months after he turned whistleblower weighs against the bank, says Devine, who has participated in writing dozens of whistleblower laws in the U.S., as well as for Great Britain and the United Nations.

"The employer has to prove by clear and convincing evidence that they would have done the same thing even if the whistleblower had been a silent witness and done nothing" about alleged wrondgoing," Devine says. "Temporal proximity is the proof."

FINRA's decision to go after Burris has only raised the stakes in the controversy, Whitman says.

That presents "strong evidence of ongoing retaliation," Whitman says. "That should have prompted somebody somewhere to say that … we need to get this merit finding out the door to get reinstatement to protect this man.”

Yesenia Guitron: Wells Fargo Whistle Blower At St. Helena Branch - Full Interview
https://soundcloud.com/workweek-radio/yesenia-guitron-wells-fargo-whistle-blower
WorkWeek looks at the racist practices and criminal corruption by Wells Fargo managers and executives including former CEO John Stumpt. We interview Yesenia Guitron, a bank teller at the St. Helena California branch. Over two million fake accounts in the US and 900,000 accounts in California were fraudulently opened and there has yet to be one criminal prosecution against Wells Fargo managers and top executives like former CEO John Stumpt. Guitron discusses the systemic corruption, workplace bullying and retaliation against her and the racist practices against Latinos and Mexican American immigrants. She also discusses how OSHA managers prevented OSHA Whistleblower Protection Program investigator and lawyer Darrell Whitman from investigating her case so she could file a civil lawsuit. Whitman was bullied and fired along with 3 other AFGE lawyers in the San Francisco office for trying to do their jobs. OSHA manager Joshua Paul was kept on the job by OSHA chief David Michaels and DOL secretary Tom Perez although they were made aware by Whitman of the systemic corruption.
A US Federal Grand jury has been impaneled in San Francisco to investigate the criminal corruption at OSHA and the DOL.
Additional media:
https://soundcloud.com/workweek-radio/ww-10-4-16-wells-fargo-workers-and-osha-and-seiu-1021-contra-costa-social-workers-strike
http://www.reuters.com/article/us-wells-fargo-accounts-whistleblower-idUSKCN11Z1RE
http://fortune.com/2016/09/29/wells-fargo-employees-sue/
http://www.sfexaminer.com/wells-fargo-faces-labor-department-review-possible-workplace-violations/
https://www.youtube.com/watch?v=gJTh_yPNFh0&app=desktop
http://www.atu.org/media/releases/atu-condemns-attacks-on-standing-rock-sioux-and-opposes-dakota-access-pipeline
http://www.nbcbayarea.com/news/local/Former-Federal-Investigator-Says-Government-Didnt-Investigate-Wells-Fargo-Whistleblower-Cases-397518261.html
http://www.reuters.com/article/us-wells-fargo-accounts-whistleblower-idUSKCN12D2M0
http://cnnfn.cnn.com/2016/10/18/investing/wells-fargo-warned-fake-accounts-2007/index.html?iid=EL
http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/
https://soundcloud.com/workweek-radio/ww8-9-16-fed-and-state-whistleblowers-ctc-carroll-and-osha-whitman
https://soundcloud.com/workweek-radio/ww8-7-16-osha-wpp-investigator-whitman-on-cover-up-and-corruption
Production of WorkWeek Radio
workweek [at] kpfa.org
https://soundcloud.com/workweek-radio

WW11-29-16 JPMorgan Chase Crimes, Cover-up And Retaliation With OSHA Whitman and Burris and Marsh
https://soundcloud.com/workweek-radio/ww11-29-16-jpmorgan-chase-crimes-with-osha-whitman-and-burris-and-marsh
Pacifica KPFA WorkWeek radio examines the growing financial scandal and government cover-up at JPMorgan Chase. We interview fired OSHA Federal investigator and lawyer Darrell Whitman who received retaliation complaints from JPMorgan Chase broker Johnny Burris from Arizona. Burris was being coerced illegally to sell financial instruments that would have been harmful to the seniors in Arizona where he was working as well as violating his fiduciary responsibility. Whitman who was also an AFGE steward was fired by his managers at OSHA before he could investigate the case and make a merit determination to protect Burris and return him to his job. This case was then turned over to OSHA investigator and lawyer Sue Kamlet who was also fired by the managers thereby preventing her from completing her investigation. WorkWeek interviews JPMorgan Chase whistleblower broker Johnny Burris about his complaints and retaliation by JPMorgan Chase and also interviews Ann Marsh who is the Senior Editor and West Coast Bureau of the magazine Financial Planning and has been investigating the case. OSHA manager Joshua Paul has now been assigned to re-investigate the case by OSHA and the DOL executives but he was previously investigating the case and turned it over to OSHA Whistlblower Protection Program investigator Whitman.
For more media:
https://soundcloud.com/workweek-radio/ww11-29-16-whitman-on-jp-morgan-chase-osha-and-burris-retaliation
http://www.financial-planning.com/news/secret-recording-a-cfp-at-jp-morgan-pushed-high-priced-products
http://www.financial-planning.com/news/inside-story-whistleblower-raised-concerns-before-307m-jpmorgan-regulatory-settlement
http://www.nytimes.com/2015/12/04/business/dealbook/bank-wrote-grievances-after-firing-a-broker.html?_r=0
Production of WorkWeek Radio
workweek [at] kpfa.org
https://soundcloud.com/workweek-radio

WW 10-4-16 Bullied Wells Fargo Workers & OSHA And SEIU 1021 Contra Costa Social Workers Strike
https://soundcloud.com/workweek-radio/ww-10-4-16-wells-fargo-workers-and-osha-and-seiu-1021-contra-costa-social-workers-strike
WorkWeek looks at the criminal fraud at Wells Fargo and how Wells Fargo workers were bullied and retaliated against for making complaints about the criminal activity at the bank.
Reuters white collar crime reporter Sarah Lynch and former Federal OSHA lawyer and investigator Darrell Whitman are interviewed. Whitman had been assigned some of the cases of Wells Fargo workers who were being bullied for refusing to engage in criminal fraud being pushed by the bank.
Whitman also discusses the culture of corruption at the Department of Labor and OSHA including bullying against OSHA workers and illegal systemic discrimination against workers with disabilities.
WorkWeek also looks at the strike of 1300 SEIU 1021 social service and eligibility workers who went on strike in Contra Costa County against poverty wages and a 40% staff shortage.
For additional media:
http://www.reuters.com/article/us-wells-fargo-accounts-whistleblower-idUSKCN11Z1RE
http://fortune.com/2016/09/29/wells-fargo-employees-sue/
http://www.sfexaminer.com/wells-fargo-faces-labor-department-review-possible-workplace-violations/
Production of WorkWeek Radio
workweek [at] KPFA.org
https://soundcloud.com/workweek-radio

Whistleblower Protection Program & Fired WPP OSHA Investigator Lawyer Darrell Whitman With GAP Louis Clark
https://www.youtube.com/watch?v=WA0nLj6sZ5Y
Louis Clark, lawyer and co-founder of the Government Accountability Project GAP in Washington DC discusses the Whistleblower Protection Project and how it is working including the affect of deregulation and privatization of government agencies that protect health and safety and the environment..
The Whistleblower Protection Program WPP is supposed to protect Federal whistleblowers throughout the United States government. He also talks about the systemic corruption in the Department of Labor DOL and OSHA and the retaliation and firing of OSHA WPP investigator, lawyer and AFGE Local 2371 steward Darrell Whitman. Clark talks about the problem of bullying of AFGE members in San Francisco OSHA Region 9 office who were seeking to protect workers who were retaliated for doing their jobs and faced retaliation themselves by the management. He also discusses reports that OSHA officials met privately with Lockheed Martin, Test America H.I.G. Capital, PG&E and other companies to criminally collude to dismiss merit complaints and coerce bad settlements for workers retaliated against for whistleblowing. He discusses the potential criminal obstruction of justice by top government officials including ALJ judges who are aware of the corruption charges and conspired to cover them up.
He also discusses the efforts of GAP to develop rules that will be enforced to protect all government whistleblowers including in the financial industry to prevent another financial crisis like 2008.
This interview was done on March 10, 2016 in San Franciso by KPFA WorkWeek journalist Steve Zeltzer
For more information:
Government Accountability Project
http://www.whistleblower.org
http://www.dailycensored.com/ohsagate/
https://soundcloud.com/workweek-radio/ww6-2-15-osha-lawyer-darrell-whitman-interviewed-part-1
https://soundcloud.com/workweek-radio/ww6-9-15-osha-lawyer-darrell-whitman-interviewed-part-2
https://soundcloud.com/workweek-radio/ww3-17-15-osha-corruption-with-madry-and-usw-oil-strike
https://www.youtube.com/watch?v=lfr7rtfqeFc
https://www.youtube.com/watch?v=3gotQhC1lHE
https://www.youtube.com/watch?v=08OY7kMydSs
https://www.youtube.com/watch?v=kQ3zii0T3z4
https://www.youtube.com/watch?v=kQ3zii0T3z4
https://www.indybay.org/newsitems/2015/10/28/18779351.php
HIG TestAmerica
http://higcapital.com/portfolio/company/98
http://www.mintpressnews.com/federal-whistleblower-investigator-fired-after-blowing-the-whistle-on-his-own-agency/210347/
Madry Court Cases
http://www.oalj.dol.gov/Decisions/ALJ/TSC/2013/MADRY_MICHAEL_J_v_EMLAB_PandK_LLC_2013TSC00001_(OCT_09_2015)_130744_ORDER_PB.PDF#search=michael%20madry
http://www.cc.com/episodes/xiptmz/the-daily-show-with-jon-stewart-february-26--2015---olivia-wilde-season-20-ep-20067
http://www.nbcbayarea.com/investigations/OSHA-Whistleblower-Investigator-Blows-Whistle-on-Own-Agency–293711041.html
Production of Labor Video Project
http://www.laborvideo.org

Electric Car Workers Accuse Tesla of Low Pay and Intimidation
http://capitalandmain.com/charge-time-electric-car-workers-accuse-tesla-of-low-pay-and-intimidation-0406

Along Silicon Valley’s interlocking freeways, low-slung tech offices with obscure names like Way.com or Oorja are populated by fresh-faced technologists in badges and pleated slacks, striving to create the next great app. But off the I-880 in Fremont, a white colossus rises from the landscape, a 5.3-million-square-foot monster that stretches across two interchanges. The gray lettering is a full story high: TESLA.
Here, the company makes high-end, zero-emission vehicles, luxury cruisers for a climate emergency. Chief executive officer Elon Musk has cultivated a reputation as an economic visionary and has been hailed for solving the world’s great challenges with panache. Tesla’s Fremont factory brought hope to a blue-collar, racially diverse town with a manufacturing tradition. And this week, after reports of a 69 percent increase in first-quarter sales, the automaker passed Ford in market value. But though its products epitomize the future, workers like Richard Ortiz say Tesla’s labor conditions are mired in the past.
Ortiz is a production associate in the closures department, assembling hoods, doors — “anything that opens or closes” on Model S sedans and Model X SUVs. Though videos of the Tesla factory emphasize robotic automation, over 6,000 workers engage in intense manual labor to build the cars.
Richard Ortiz (Photo: Cindy Chew)Richard Ortiz: “They want to make sustainable cars. We need sustainable employment.” (Photo: Cindy Chew)
“I have an eight-pound rivnut gun,” Ortiz said, referring to a tool that installs rivet nuts. “I’m doing that all day long. I’m to the point where, if I pick something up with any weight, within 30 seconds I have to drop it. That scares me, I want to be able to use my arm when I retire.”
Tesla workers say circumstances like Ortiz’s are commonplace at a factory that prioritizes production goals over health and safety. Now they’re fighting back against low pay, hazardous conditions and a culture of intimidation, seeking to unionize through the United Auto Workers. Tesla is the only U.S. automaker using nonunion workers at a stateside plant, and breaking through would give organized labor a foothold in the tech industry as well. Until then, the Tesla experience reveals that green jobs aren’t necessarily good jobs without worker power. “They want to make sustainable cars,” says Ortiz. “We need sustainable employment.”
Tesla purchased the Fremont facility in 2010, after Toyota and General Motors shuttered what was then the nation’s most innovative auto plant. At NUMMI (New United Motor Manufacturing Inc.), management instituted Japanese production techniques that maximized efficiency. In the 1980s, “the productivity of the plant and the quality of the cars were equal to Toyota plants in Japan,” said Ruth Milkman, author of Farewell to the Factory, a study of U.S. autoworkers. “It was the plant to watch for a while.”
The Tesla experience reveals that green jobs aren’t necessarily good jobs without worker power.
Jose Moran worked at NUMMI for eight years, and Tesla hired him as a production associate on the body line in 2012. “In the beginning, management would always promise, ‘Things will be better,’” Moran said. “But they never got better. I felt it was time to speak up.”
In February, Moran went public with a Medium blog post, confirming the union effort for the first time. His grievances with the way the plant operates, Moran wrote, “can’t be resolved without workers having a voice and being included in the process.”
The issues start with wages. According to Moran and co-workers, wages range from $17 to $21 an hour, well below the $29.04 national average hourly wage for motor vehicle manufacturing. Tesla claims stock awards push total compensation above autoworker averages, but workers counter that the stock doesn’t fully vest until four years of service. “I can’t tell a little kid, I’ll feed you in a year,” Ortiz said. Raises and promotions are also rare; Ortiz mentioned a colleague who received only one increase in seven years.
Tesla workers make luxury vehicles that can cost $90,000 or more but, unlike the people at Henry Ford’s plant, have no chance of buying one. “Seventeen dollars to $21 without a lot of benefits is not much higher than you can get being a gardener or a hotel clerk,” said Nelson Lichtenstein, a labor history professor at the University of California, Santa Barbara.
The low pay shrinks further in the San Francisco Bay Area, which has one of the nation’s highest costs of living. Though the heavily Asian and Latino residential districts around the factory feature modest one-story tract homes and apartments – I even saw a large mobile home park – housing costs are so exorbitant that employees cannot hope to live near the worksite. The median two-bedroom apartment in Fremont rents for $2,640 a month, according to ApartmentList.com. For a married Tesla worker making entry-level wages and working 43 hours a week, that’s equivalent to 90 percent of take-home pay.
At the end of 2015, employees claimed, they worked every day for a month to hit the production number, including weekends, plied with Red Bull and candy to keep going.
Moran, a father of two, left Fremont because, he said, “I couldn’t make it, couldn’t save.” He now drives 59 miles to work from Manteca, in the San Joaquin Valley; his one-way commute can be as long as two hours. Jonathan Galescu, a body repair technician, lives 54 miles north, in Vallejo. Between gas and bridge tolls, “it costs me $15 to $17 just to get to work,” he said. Galescu did carpool with a colleague in Richmond to cut costs, but it took him additional time. “I had to make a decision: Do I take that extra gas money or spend 30 more minutes with my children?”
(Even parking can be an ordeal, as spaces are limited and far from the worksite. A gleaming new BART rail station opened in March, but it’s separated from the facility by freight train tracks, meaning workers using mass transit face a two-mile walk to work.)
Tesla has received numerous subsidies for its U.S. factories, including a 2015 California Competes tax credit of $15 million for expansion of the Fremont plant. The implicit bargain with these government subsidies is that the private sector will create good-paying jobs. But Tesla only had to promise a minimum salary of $35,000 a year and an average salary of $55,000 to maintain eligibility for the tax credit.
Told about pay at the Tesla plant, Madeline Janis, a member of the California Competes committee who voted against the Tesla tax credit, said: “As a longtime worker rights advocate, [I’d say] that’s an outrage. Tesla should and can do better, as we know from the success of the company. There’s no reason why they can’t create good jobs in California.”
Most workers get by with overtime that they have no choice of turning down. Sixty-hour weeks are mandatory on the Model S line (known colloquially as the “shit line”), which is entirely manual labor. Model X workers often don’t know how long they’ll be staying when they come into work. The schedule depends on a daily target number of cars to build.
“There’s not a lot of attention toward anything but hitting the production goal,” said Jose Moran. Breakdowns on the line can make the number impossible to reach, forcing employees to stagger breaks to catch up. At the end of 2015, employees claimed, they worked every day for a month to hit the number, including weekends, plied with Red Bull and candy to keep going.
Jonathan Galescu: “I see my kids grow up through Facebook." (Photo: Cindy Chew)Jonathan Galescu: “I see my kids grow up through Facebook.” (Photo: Cindy Chew)
Without the overtime hours, low pay would make it difficult for workers to survive. But with OT, work-family balance becomes impossible. “I see my kids grow up through Facebook,” said Galescu. “My son always cries for me to stay home – ‘Don’t go to work’!”
Galescu works the night shift repairing defects, mostly while the cars are still in motion. He and his five-man team jump in and out of cars, pulling out dents and dings. Management recently cut the repair work time per car from 180 seconds to 90. If workers can’t complete the task, it causes slowdowns on the line. Sometimes every car has the same defect, created by small pieces of dirt in the auto body stamping machine. “I have a friend in stamping who said if they’d just allow them a few more minutes to make sure they’re clean before they run, the defects would be way lower,” said Richard Ortiz.
Bruising Work: A welt that Galescu says he received from a job accident.
Two years ago,Galescu said, a part from a Model S rear underbody popped out and hit Galescu in the chest, sending him flying across the shop floor. “My chest was on fire,” Galescu said, showing me a picture of the massive welt it created. His supervisor tried to get him back on the line that day, but security personnel allowed him to go home. When Galescu returned to work, the supervisor berated him for the injury, even though he repeatedly warned the supervisor that the underbody machine was malfunctioning.
“He said, ‘You caused me to be late going home to my wife,’” Galescu said. “I really thought I was going to lose my job.”
In his blog post, Moran noted that six of the eight people on his team have been out on medical leave at one time. According to Occupational Safety and Health Administration statistics, since 2012 the plant has been cited for 40 different safety violations, compiling $143,835 in fines (about $6,000 of which are still being contested). By comparison, in its last five years of operation, NUMMI incurred only 17 violations, with $48,755 in fines, while pumping out far more vehicles. Tesla’s fines resulted from numerous accidents and investigations, including explosions, burns, and a 2016 case where a contract worker fell three storiesfrom the plant roof. (Tesla CEO Elon Musk has claimed that Tesla’s injury rate was under half of the national average, and that Moran’s assertion was erroneous.)
Workers allege that Tesla stigmatizes reporting injuries. While the company offers workers compensation insurance, light duty off the line can reduce pay to the minimum wage. Supervisors allegedly brand those willing to report injuries as malingerers. “They blacklist you, they treat you like crap,” Galescu said. Ortiz added that workers have been fired for excessive medical problems. “They don’t say they’re fired, but all of a sudden they’re gone.” So workers often keep quiet about aches and pains.
Tesla spokesman Dave Arnold did not respond to a detailed list of questions for this story.
A voice on the job could help prevent unnecessary injuries, and make assembly lines more efficient. But unlike the NUMMI days, workers now have no say, and there’s no process through which to lodge grievances. “I had a supervisor say, ‘We’re not dealing with HR, they’re just a bunch of women in skirts who don’t know what they’re doing,’” Galescu said.
With workers pressured, overworked and battered by the line, and absent from family milestones, employee burnout is common and morale is low. “We’re employed, but not gainfully,” said Ortiz. “We need to see a future for ourselves.”

Elon Musk (Photo: Steve Jurvetson)
In the short term, things could get worse. In March, Tesla announced a $1.15 billion stock offering, to finance the launch of the Model 3, its newest, mid-priced vehicle. Tesla already has almost 400,000 Model 3s on back order, with deliveries expected later this year. Elon Musk has promised that the plant will produce 500,000 cars a yearby 2018. That’s five times as many as current output, and it signals an even deeper attention to numbers.
But the Model 3 ramp-up also presents leverage for workers. Moran and his colleagues insist that they want to make the plant function better. “We work on the machines 10 to 12 hours a day, we know what could work,” Moran said. “We’re not trying to bash Tesla, we want the company to succeed.”
Moran’s open letter came after six months of internal organizing; the UAW confirmed hiring organizers for the plant in February. Tesla initially responded favorably. “You see safety people walking around, fixing things that weren’t fixed before,” Moran said. “It took one person to speak up.” In November, Tesla offered a 50-cent increase to base pay for the first time in years. Four months later, the company added another 50 cents.
But after originally describing Tesla as “union neutral,” Musk said on an earnings call in February that “there are really only disadvantages to someone to want the UAW here.” In a later email to workers, Musk delivered a point-by-point rebuttal to Moran’s Medium post, arguing that overtime had decreased and incident rates were below average. Instead of offering workers better wages and input on production, Musk promised “a really amazing party” for the launch of the Model 3, “free frozen yogurt stands” at the factory and “a Tesla electric pod roller coaster” connecting the parking lots. “It’s going to get crazy good,” Musk concluded.
Middle-class manufacturing workers seeking higher pay aren’t dazzled by the kind of perks Facebook coders enjoy. They chuckled whenever I brought up the yogurt and the roller coaster. “If I want to go on a roller coaster, pay me enough so I can go when I want to,” said Richard Ortiz. “It’s insulting, it shows you what he thinks of us.”
Labor historian Nelson Lichtenstein expressed horror at Musk’s rhetoric. “It was the worst kind of caricature of a capitalist, like it’s 1898,” he said. “They have these sophisticated systems of production and distribution, but their social arrangements are utterly retrograde.”
Moran has taken the assault from his boss in stride. “People come up to me and say you’re doing a good job,” he said. “It goes to show that [Musk] is 100 percent out of touch with what’s going on at the plant.” Moran and his colleagues have started a Facebook group, A Fair Future at Tesla, with videos of Moran and others telling their stories.
In November, workers were forced to sign an extremely broad, retroactive confidentiality agreement, one that vowed consequences if they speak publicly about Tesla – including about wages and working conditions. Confidentiality agreements are common in auto factories to protect trade secrets, but this was so far-reaching that five members of the California legislature wrote to Tesla, warning that the agreement violated protected employee activity guaranteed by the National Labor Relations Act.
Organizers say Tesla’s aim was to create a chilling effect. “When you try to organize, [the workers] are afraid, they think you’re undercover,” said Ortiz.
The UAW has tried unsuccessfully to organize nonunion auto plants run by foreign manufacturers, including a Volkswagen plant in Tennessee where UAW secured the neutrality of the employer and still lost a union vote. (A later vote partially succeeded, but is mired in court). Not only is the Tesla factory in the heart of blue-state California, but in a region with a strong organizing history. However, Tesla also sits at the nexus between blue collar and Silicon Valley, where organized labor has barely penetrated.
Heightened activism after President Trump’s election has forced tech firms to take stands of resistance, while union drives have arisen among security officers and cafeteria workers in tech office parks. But organizing Fremont would be an order of larger magnitude, especially because it would actually realize the promise of green technology jobs. “I’m always telling my environmental friends, don’t be enamored of these green capitalists,” said Joe Uehlein of the Labor Network for Sustainability. “We should be fighting for that missing leg of the sustainability stool, economic justice. And it’s important for the UAW to signal that they see a future in renewables and clean vehicles, that they’re not just a union of people who drive pickup trucks.”
Tesla has been praised for creating manufacturing jobs domestically rather than overseas. Clean energy in the U.S. is as big an industry as pharmaceutical manufacturing. But the jobs created aren’t automatically high-paying, good places to work. Politicians cite the quantity of green jobs without enough concern about their quality. The same problems of low wages, offshoring production and lack of collective bargaining prevalent throughout the economy can crop up in environmentally friendly enterprises. “No worker or community should ever be the roadkill on the path to a better world,” said Uehlein.
Richard Ortiz, who worked at NUMMI for 22 years and actually had retired before being drawn back to Tesla, continually expressed pride in working at a leading-edge manufacturer. “I love to wear my gear all over town,” he said. “I thank Tesla for giving me the opportunity to work there. They will give anyone a chance. But a chance at what?”

Tesla workers have started organizing a union

http://pacificaeveningnews.blogspot.com/2017/04/tesla-workers-have-started-organizing.html

WEDNESDAY, APRIL 5, 2017

Tesla workers have started organizing a union