(Editor’s note: This story has been updated with additional information since was initially published, including the Dogecoin-related lawsuit and firing of SpaceX employees.)
Elon Musk is facing a growing backlash from buyers, employees and investors, and it’s creating headaches for the various companies he runs, notably Tesla and SpaceX.
Musk is being sued for $258 billion in federal court in Manhattan by a Dogecoin investor accusing the entrepreneur of running a crypto-based pyramid scheme.
Keith Johnson sued not only Musk, but also Tesla and SpaceX, claiming the CEO hyped up Dogecoin, driving the price up, only to intentionally let it fall for his “profit, exposure and amusement.”
Johnson asked for $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled, according to a Reuters report.
It’s just one of several suits filed against Musk, Tesla, SpaceX or some combination of the three.
The EV manufacturer faces a new lawsuit filed by a shareholder accusing both Musk and the Tesla board of failing to address workplace discrimination and harassment, resulting in a “toxic workplace culture.” Last October, a Black employee won a $137 million judgement after suing Tesla for racial discrimination.
Employees at SpaceX, meanwhile, issued an open letter accusing Musk of becoming a “distraction and embarrassment” as he tweets out increasingly politicized comments that, among other things, have criticized President Joe Biden, the Democratic Party and the LGBTQ community.
“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter declared. First reported by the Verge, it is not clear who authored the letter but it went out to thousands of SpaceX employees through an internal group chat ironically, known as “Morale Boosters.”
Five SpaceX employees involved in writing the letter were reportedly fired for “blanketing thousands of people across the company with repeated unsolicited emails,” according to The Verge. The news was relayed to employees in an email, which said there was “no need for this kind of overreaching activism.”
Front and center
Musk has long been the “face” of the various companies he runs, as the SpaceX letter points out. That long proved an advantage as he developed a loyal, almost cult-like following, according to analysts and investors. It helped Tesla stand out as it attempted to crack into an automotive industry dominated for decades by so-called legacy brands. And it helped build a following for SpaceX, Solar City and the Boring Company, as well.
But critics contend that Musk’s recent behavior has proved erratic and divisive, and it may be undoing much of what he previously accomplished. Social media long favorable to the South African entrepreneur have been filled with rebukes — and negative claims by some motorists who decided to cancel purchases of Tesla vehicles.
The criticism has ramped up since Musk launched his controversial, $47-billion bid to purchase Twitter. And it didn’t help when he mocked a former corporate flight attendant who accused the executive of sexual harassment on social media.
“He often doesn’t realize how something he says could affect others,” one SpaceX employee told Reuters. “The letter is a collective, ‘Hey! We’re getting some heat for things that are unrelated to us.'”
Employees at Tesla have reportedly been enflamed, as well, by tweets and other statements Musk has made in recent weeks. That includes a declaration that “Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla.”
But employees and customers aren’t the only ones fired up.
Investor Solomon Chau filed suit against Tesla on Thursday, accusing the company of tolerating a “toxic workplace culture” in which racial discrimination and sexual harassment go unpunished.
“Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees,” the lawsuit said, adding the “environment has gestated internally for years, and only recently has the truth about Tesla’s culture emerged.”
Chau justified the lawsuit — which names not only Musk but also the full Tesla board — by noting that “Tesla’s toxic workplace culture has caused financial harm and irreparable damage to the company’s reputation.”
The lawsuit is just the latest facing the automaker. It has been hit by numerous discrimination and harassment claims — as has SpaceX — over the last several years. The State of California filed suit this year, as well.
Last October, former Tesla elevator operator Owen Diaz won a $137 million judgement against the automaker after a jury agreed he had faced ongoing racial discrimination that the automaker failed to respond to. In April, a judge cut the award to $15 million.
TheDetroitBureau.com has reached out to Tesla for comment on the new lawsuit, Chau et al v. Musk et al, filed in the U.S. District Court, Western District of Texas. The automaker has disbanded its media relations department and has not responded to queries for more than a year.