Petition for Writ of Certiorari — Karl Hansen, Petitioner v. Tesla, Inc., et al.

Supreme Court briefApr 14, 2025

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No. 24In the

Supreme Court of the United States

KARL HANSEN,

Petitioner,

TESLA, INC.; ELON MUSK;

U.S. SECURITY ASSOCIATES, INC.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of A ppeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Robert L. Sirianni, Jr.

Counsel of Record

Brownstone, P.A.

P.O. Box 2047

Winter Park, FL 32790

(407) 388-1900

robertsirianni@

brownstonelaw.com

Counsel for Petitioner

131107

(800) 274-3321 • (800) 359-6859

QUESTIONS PRESENTED FOR REVIEW

Whether a confirmed arbitration award on related

or overlapping claims may be given issue-preclusive

effect so as to bar a Sarbanes-Oxley (“SOX”)

whistleblower claim, notwithstanding 18 U.S.C.

§ 1514A(e)’s explicit prohibition against forcing SOX

claims into predispute arbitration.

Whether the court of appeals’ holding that an

arbitration award confirmed by a district court

triggers full preclusive effect over a statutorily nonarbitrable SOX claim contravenes the narrow rule set

forth in Alexander v. Gardner-Denver Co., 415 U.S. 36

(1974) and reaffirmed in 14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009), which bars arbitral preclusion

of statutory claims that were never authorized for

arbitration in the first place.

PARTIES TO THE PROCEEDING

Petitioner:

Karl Hansen was the plaintiff in the district court

and the appellant in the court of appeals.

Respondents:

Tesla, Inc. was a defendant in the district court and

an appellee in the court of appeals.

Elon Musk was a defendant in the district court and

an appellee in the court of appeals.

U.S. Security Associates, Inc. was a defendant in the

district court and an appellee in the court of appeals.

iii

CORPORATE DISCLOSURE STATEMENT

Tesla, Inc., is a publicly traded company (NASDAQ:

TSLA). It has no parent corporation. No publicly held

corporation owns 10% or more of its stock.

U.S. Security Associates, Inc., is a wholly owned

subsidiary of Allied Universal. No publicly held

corporation owns 10% or more of Allied Universal’s

stock.

STATEMENT OF RELATED PROCEEDINGS

United States Court District Court of Nevada

District Court Case No. 3:19-cv-00413-LRH-CSD;

Hansen v. Musk, 653 F. Supp. 3d 832 (D. Nev. 2023)

Karl Hansen v. Elon Musk; Tesla Motors, Inc.; U.S.

Securities Associates, Inc.,

Dismissal Granted in Favor of Defendants dated January

31, 2023.

United States Court of Appeals for the Ninth Circuit

Case No. 23-15296, Hansen v. Musk, 122 F.4th 1162

(9th Cir. 2024)

Karl Hansen v. Elon Musk; Tesla Motors, Inc.; U.S.

Securities Associates, Inc.,

Affirmed, Partial Concurrence and Partial Dissent by

Judge Collins dated December 10, 2024.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW . . . . . . . . . i

PARTIES TO THE PROCEEDING . . . . . . . . . . . . . . . . ii

CORPORATE DISCLOSURE STATEMENT . . . . . . iii

STATEMENT OF RELATED PROCEEDINGS . . . . . iv

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . v

TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . . ix

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . x

PETITION FOR WRIT OF CERTIORARI . . . . . . . . . 1

OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

STATEMENT OF JURISDICTION . . . . . . . . . . . . . . . 1

STATUTORY PROVISIONS INVOLVED . . . . . . . . . . 1

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

STATEMENT OF THE CASE AND FACTS . . . . . . . . 3

A. Hansen’s Initial Allegations and Federal

Court Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B. Partial Arbitration Ordered; SOX Claim

Excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Table of Contents

Page

C. Arbitration of Dodd-Frank and Other

Claims; Critical Factual Determination . . . . . . . 5

D. Conf i r med A rbitral Awa rd Used to

Preclude a Critical Element of the NonArbitrable SOX Claim, Thus Defeating It . . . . . 6

REASONS FOR GRANTING THE PETITION . . . . . 7

This Case Presents an Ideal Vehicle for

Resolving an Important Federal Question

and is Ripe for Certiorari in Several

Respects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

A. Directly Conf licts w ith Supreme

Court Precedent . . . . . . . . . . . . . . . . . . . . . . . 7

B. Addresses an Important Question of

Federal Law That Demands Uniform

Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

C. Grave Public Policy Concerns and the

Risk of Forum Shopping . . . . . . . . . . . . . . . . 8

D. This Issue Presents a Clear-Cut

Legal Question Squarely Addressed

Below . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

II. Federal Common Law Forecloses Using an

Arbitral Award to Preclude a Statutorily

Non-Arbitrable SOX Claim . . . . . . . . . . . . . . . . . 10

vii

Table of Contents

Page

A. The FAA’s Confirmation Provision

Does Not Override SOX’s Statutory

Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

B. The Ga rdner-Denver Rule Ba rs

Preclusive Effect Where the Arbitrator

Lacked Statutory Authority . . . . . . . . . . . . 11

C. Con f i r m i ng t he Aw a r d Ca n not

Retroactively Cure the Arbitrator’s

Lack of Authority . . . . . . . . . . . . . . . . . . . . . 12

D. Federal Common Law Principles

P rot ect t he St atut or y Right t o

a Judicial Forum . . . . . . . . . . . . . . . . . . . . . . 12

III. A C o n f i r m e d A r b i t r a t i o n Aw a r d

Cannot Displace Congress’s Express

Requirement That SOX Whistleblower

Claims Be Litigated in a Judicial Forum . . . . . 13

A. Confirmation Does Not Constitute

a Merits Review of SOX Claims . . . . . . . . . 14

B. The Majority’s Reasoning Misconstrues

the Significance of Confirmation

of an A rbitration Decision by a

District Court . . . . . . . . . . . . . . . . . . . . . . . . 14

C. Section 1514A(e) Explicitly Prohibits

P red i sput e A rbit r at ion of SOX

Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

viii

Table of Contents

Page

D. Policy Considerations Reinforce

Congress’s Mandate . . . . . . . . . . . . . . . . . . . 16

IV. The Ruling Undercuts the Vital Federal

I nt e r e st i n R obu st W h i st leblowe r

P rotections and Opens the Door to

Forum Shopping by Erratically Disparate

Outcomes Based on Circumstance . . . . . . . . . . . 17

A. Impedes Ef fective O versight of

Corporate Misconduct . . . . . . . . . . . . . . . . . 17

B. Contrary to Express Congressional

Policy and Intent . . . . . . . . . . . . . . . . . . . . . 17

C. Departure From Supreme Court

Precedent and the Risk of Forum

Shopping Under mine the Public

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

TABLE OF APPENDICES

Page

APPENDIX A — OPINION OF THE UNITED

STAT ES COU RT OF A PPEA LS FOR

T H E N I N T H C I R C U I T, F I L ED

DECEMBER 10, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . 1a

APPENDIX B — MINUTE ORDER OF THE

UNITED STATES DISTRICT COURT

F OR T H E DI S T R IC T OF N E VA DA ,

FILED JULY 25, 2022 . . . . . . . . . . . . . . . . . . . . . . . 37a

A PPENDIX C — FINAL ARBITRATION

AWARD, FILED AUGUST 16, 2022 . . . . . . . . . . . . 39a

APPENDIX D — RELEVANT STATUTORY

PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58a

TABLE OF CITED AUTHORITIES

Cases

Page

14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009) . . . . . . . . . . . . . . . . . . . . 7, 9, 11, 15

Alexander v. Gardner-Denver Co.,

415 U.S. 36 (1974) . . . . . . . . . . 2, 7, 9, 11, 12, 13, 14, 18

Hansen v. Musk,

122 F.4th 1162 (9th Cir. 2024) . . . . . . 1, 3, 4, 5, 6, 7, 14

Hansen v. Musk,

653 F. Supp. 3d 832 (D. Nev. 2023) . . . . . . . . . . . . . 1, 3

McDonald v. City of West Branch,

466 U.S. 284 (1984) . . . . . . . . . . . . 2, 7, 9, 11, 12, 14, 18

Shearson/American Express Inc. v. McMahon,

482 U.S. 220, 226 (1987) . . . . . . . . . . . . . . . . . . . . . . . . 8

Statutes

9 U.S.C. § 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 6, 10, 14

18 U.S.C. § 1514A(e)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

18 U.S.C. § 1514A(e) . . . . . . 2, 6, 7, 10, 11, 13, 14, 15, 17, 18

18 U.S.C. § 1514A(e)(2) . . . . . . . . . . . . . . . . . . . . . . . 1, 4, 15

28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PETITION FOR WRIT OF CERTIORARI

Petitioner Karl Hansen by and through counsel,

respectfully petitions for a writ of certiorari to review

the judgment of the United States Court of Appeals for

the Ninth Circuit.

OPINIONS BELOW

The opinion of the court of appeals is reported at

Hansen v. Musk, 122 F.4th 1162 (9th Cir. 2024). The

dissenting opinion of Judge Collins is reported at the same

citation and is central to this Petition. The district court’s

order confirming the arbitration award and dismissing

Petitioner’s Sarbanes-Oxley claim is reported at Hansen

v. Musk, 653 F. Supp. 3d 832 (D. Nev. 2023).

STATEMENT OF JURISDICTION

The court of appeals entered judgment on December

10, 2024. This Court has jurisdiction under 28 U.S.C.

§ 1254(1).

STATUTORY PROVISIONS INVOLVED

18 U.S.C. §1514A(e)(1)–(2) provides:

(1) “The rights and remedies provided for in this

section may not be waived by any agreement,

policy form, or condition of employment,

i nc lud i ng by a pr e d i sput e a rbit r at ion

agreement.”

(2) “No predispute arbitration agreement

shall be valid or enforceable, if the agreement

requires arbitration of a dispute arising under

this section.”

9 U.S.C. § 13 of the Federal Arbitration Act provides in

relevant part:

“The judgment [confirming an arbitration

award] shall have the same force and effect,

in all respects, as, and be subject to all the

provisions of law relating to, a judgment in an

action . . . .”

INTRODUCTION

Congress deemed SOX whistleblower retaliation

claims too important to be waived by any predispute

arbitration agreement. 18 U.S.C. § 1514A(e). Yet, in

the decision below, the court of appeals held that the

unfavorable findings contained in an arbitration award

(which was later confirmed in federal court) could

collaterally estop Petitioner’s SOX claim, effectively

forcing SOX issues into arbitration via the back door. The

panel majority thus allowed the same result Congress

explicitly forbade in 18 U.S.C. § 1514A(e).

Judge Collins’s dissent to the December 10, 2024

decision correctly reasoned that, under Alexander v.

Gardner-Denver Co., McDonald v. City of West Branch,

and their progeny, an arbitration award by a tribunal

expressly barred from hearing a federal statutory

claim cannot have the effect of barring that claim in

court. Alexander v. Gardner-Denver Co., 415 U.S. 36

(1974); McDonald v. City of West Branch, 466 U.S. 284

(1984). This rule is narrow but fundamental: only if a

party agreed to arbitrate that very statutory claim, or

if Congress allowed arbitration of it, can a prior arbitral

ruling on a related matter preclude subsequent judicial

proceedings.

STATEMENT OF THE CASE AND FACTS

A. Hansen’s Initial Allegations and Federal Court

Filing

On July 19, 2019, Karl Hansen filed a lawsuit in the

United States District Court for the District of Nevada

against Tesla, Inc., its CEO Elon Musk, and U.S. Security

Associates (USSA) (collectively, “Defendants”). See

Hansen v. Musk, 653 F. Supp. 3d 832 (D. Nev. 2023).

Hansen alleged that Defendants retaliated against him for

reporting various forms of misconduct at Tesla’s Nevada

Gigafactory to both Tesla’s own management and the

Securities and Exchange Commission (SEC). Id.

Hansen’s Complaint stated that: (1) he was hired

as a protection associate by Tesla in March 2018 and

subsequently promoted to an investigations case specialist

at the Nevada Gigafactory; (2) he discovered and reported

what he believed to be large-scale thefts at the Gigafactory

costing tens of millions of dollars; (3) he uncovered alleged

narcotics trafficking at the facility tied to Mexican drug

cartels; and (4) he reported suspicions of improperly

awarded management contracts and raised concerns

about potential wiretapping and hacking of employees’

communications by Tesla’s Senior Manager of Global

Security. Hansen, 122 F.4th 1162, 1167.

A fter Hansen brought these findings to Tesla

management, information that eventually reached Elon

Musk, Tesla terminated his employment in June 2018

under the stated rationale of “internal restructuring.” Id.

Hansen soon thereafter accepted a position with USSA,

a security-services provider under contract with Tesla,

and he continued investigating the same alleged thefts

and criminal activities at the Gigafactory. Id. In August

2018, Hansen filed a formal SEC report documenting his

concerns about Tesla’s misconduct. Id.

Shortly after this disclosure, Musk witnessed Hansen

stationed at a Gigafactory entrance and demanded his

removal. USSA promptly eliminated Hansen’s role at

that facility, allegedly in retaliation for his whistleblower

activities. Id. According to Hansen, this amounted to

unlawful retaliation under federal whistleblower laws.

Id. at 1167–68.

B. Partial Arbitration Ordered; SOX Claim Excluded

In response to Hansen’s lawsuit, Defendants moved to

compel arbitration for nearly all of Hansen’s claims, citing

an arbitration provision in his employment agreement

with USSA. Id. at 1168. Defendants did not, however,

seek arbitration of Hansen’s SOX whistleblower claim,

recognizing that 18 U.S.C. § 1514A(e)(2) bars forcing SOX

disputes into arbitration under a predispute agreement.

Id.

The district court accordingly, (1) granted Defendants’

motions to compel arbitration on Hansen’s other claims,

(2) refused to compel arbitration of the SOX claim given

the statutory prohibition, and (3) stayed the SOX action

pending completion of the arbitral proceedings, noting

that the SOX claim arose out of the same conduct as the

claims headed to arbitration. Id.

C. Arbitration of Dodd-Frank and Other Claims;

Critical Factual Determination

After the district court ordered arbitration, Hansen

added additional claims in the arbitral forum, including

federal and Nevada RICO causes of action, breach

of contract and tortious interference theories, and a

Dodd-Frank whistleblower retaliation claim. Id. at 1168.

The arbitrator dismissed Hansen’s RICO claims after

determining he failed to establish either a pattern of

racketeering or a cognizable injury. Id. The arbitrator

also granted summary judgment on Hansen’s breach-ofcontract and certain tortious-interference claims, finding

Hansen had no contractual right to remain assigned to

Tesla’s Gigafactory. Id.

On June 8, 2022, the arbitrator issued a final award that

rejected Hansen’s remaining tortious interference claim

and denied Dodd-Frank whistleblower protection. Id. at

1168–69. The final award found that: (1) Tesla outsourced

employees in Hansen’s job classification to USSA rather

than taking adverse action because of Hansen’s SEC

disclosures; (2) Hansen had been discharged from the

Gigafactory position for emailing confidential materials

to third parties and subsequently deleting those emails;

and (3) USSA could not have retaliated for any “protected

activity” because it lacked awareness of Hansen’s

whistleblower disclosures. Id. at 1169.

The arbitrator also concluded that Hansen could not

have reasonably believed he was reporting securities-law

violations, a prerequisite for whistleblower status under

both Dodd-Frank and SOX. Id. The award emphasized

that Hansen’s complaints concerned garden variety

theft and drug violations under state or local law, not

shareholder or securities fraud, and that Hansen offered

no evidence or argument tying his disclosures to federal

securities violations. Id.

D. Confirmed Arbitral Award Used to Preclude a

Critical Element of the Non-Arbitrable SOX Claim,

Thus Defeating It

After the arbitrator ruled against Hansen, Defendants

moved to lift the stay on the SOX claim and to confirm

the arbitral award under 9 U.S.C. § 13. Id. Hansen

did not oppose confirmation, and on July 25, 2022, the

district court confirmed the award, treating it as a final

and enforceable judgment. Id. at 1169. Defendants next

sought dismissal of Hansen’s entire lawsuit, including

the SOX claim, on grounds of issue preclusion, asserting

that the arbitrator’s factual findings disposed of whether

Hansen had engaged in protected whistleblower conduct

or suffered retaliation for it. Id. at 1169–70.

The district court granted Defendants’ motion,

determining that the core factual issues had been “actually

litigated and decided” in arbitration. Id. Consequently,

the court dismissed all of Hansen’s claims, including

his SOX whistleblower action that was never itself sent

to arbitration, based on collateral estoppel. Id. Hansen

appealed, contending that the district court’s reliance

on an arbitral award to bar a statutorily non-arbitrable

SOX claim contravened 18 U.S.C. § 1514A(e) and Supreme

Court precedent. Id. at 1170–71.

In essence, the arbitrator’s factual determinations on

Hansen’s Dodd-Frank allegations, particularly whether

he “reasonably believed” he was reporting securities-law

misconduct, are now being used to defeat a SOX cause of

action that Congress explicitly exempted from mandatory

arbitration. Id. at 1169. This outcome, Hansen argues,

contradicts the clear language of the Sarbanes-Oxley

Act and is the central issue in this Petition seeking the

Supreme Court’s review.

REASONS FOR GRANTING THE PETITION

This Case Presents an Ideal Vehicle for Resolving

an Important Federal Question and is Ripe for

Certiorari in Several Respects.

Directly Conf licts with Supreme Cour t

Precedent

As elaborated upon, infra, panel majority’s ruling

conf licts w ith Alexander v. Gardner-Denver Co.,

McDonald v. West Branch, and 14 Penn Plaza LLC v.

Pyett. See Alexander v. Gardner-Denver Co., 415 U.S.

36 (1974); McDonald v. City of West Branch, 466 U.S.

284 (1984); 14 Penn Plaza LLC v. Pyett, 556 U.S. 247,

263 (2009). Those decisions hold that an arbitrator’s

award cannot preclude a statutory cause of action when

Congress has explicitly barred that cause of action from

arbitration. Judge Collins’s detailed dissent highlights

this very conflict, which demonstrates the tumult that

will arise if the Ninth Circuit’s decision in this matter is

allowed to stand.

By allowing the ministerial act of confirmation of an

arbitration decision under the Federal Arbitration Act to

override the plain text of 18 U.S.C. § 1514A(e), the decision

below disregards the Supreme Court’s careful balancing of

the FAA against other contrary congressional commands

in Shearson/American Express Inc. v. McMahon, 482

U.S. 220, 226 (1987). This sharp departure from binding

precedent cries out for this Court’s supervisory review.

B. Addresses an Important Question of Federal

Law That Demands Uniform Resolution

Whether a confirmed arbitration award on related,

arbitrable claims can preclude a SOX whistleblower

action, expressly deemed non-arbitrable by Congress,

is both significant and insufficiently resolved by existing

Supreme Court case law. Other circuits may adopt

divergent approaches, leaving whistleblowers in different

jurisdictions subject to inconsistent standards.

The Sarbanes-Oxley Act is a lynchpin in preventing

corporate and securities fraud. If lower courts are free to

use arbitral findings as a backdoor means of defeating a

SOX cause of action, then this vital federal statute loses

its intended force across the country.

Grave Public Policy Concerns and the Risk of

Forum Shopping

A core purpose of Sarbanes-Oxley is to ensure

employees have unfettered access to a judicial forum when

exposing suspected fraud. Allowing arbitrators, who are

statutorily disqualified from adjudicating SOX claims, to

indirectly dispose of those claims via collateral estoppel

seriously undermines that purpose.

The panel’s approach effectively encourages litigants

to steer tangential or related claims into arbitration, then

rush to confirm any adverse factual findings in a friendly

district court. This not only fosters forum shopping

but also disrupts consistent enforcement of federal

whistleblower protections. Such an outcome is squarely

against the public interest in exposing and remedying

systemic corporate misconduct.

This Issue Presents a Clear-Cut Legal Question

Squarely Addressed Below

The core dispute, whether a private arbitral award

on arbitrable claims can be used to preclude a SOX

whistleblower action that Congress has declared nonarbitrable, was placed directly before the district court

and the court of appeals. Both courts addressed and

definitively resolved this precise issue, thereby creating a

record that cleanly presents the question for this Court’s

review.

Judge Collins’s thorough dissent underscores the

incompatibility of the majority’s approach with GardnerDenver Co., McDonald, Pyett, and their progeny. No

further factual development is required, and this Court

need not concern its decision with the veracity or efficacy

of any factual finding below, nor whether there was any

abuse of any standard of discretion by one of the lower

courts. Here is posed a pure question of law. This conflict

between the Ninth Circuit’s interpretation of those

precedents is ripe for a conclusive resolution here.

In sum, the tension between the panel’s opinion and

well-established Supreme Court precedent, the critical

importance of SOX whistleblower protections, the danger

of forum shopping, and the clean factual record all render

this case uniquely suitable for the Court’s plenary review.

By granting certiorari, the Court can restore uniformity

and uphold Congress’s unequivocal mandate that

Sarbanes-Oxley whistleblower claims must be resolved in

a judicial forum, free from the constraints of pre-dispute

arbitration.

II. Federal Common Law Forecloses Using an Arbitral

Award to Preclude a Statutorily Non-Arbitrable

SOX Claim

The FAA’s Confirmation Provision Does Not

Override SOX’s Statutory Exemption

Respondents and the panel majority maintain that

once an arbitration award is confirmed under 9 U.S.C.

§ 13, it automatically acquires full preclusive effect, even

over a SOX claim. They assert that declining to give the

arbitral award such force would displace the FAA. But

as Judge Collins notes, that premise begs the question:

there is no irreconcilable conflict between § 13 of the FAA

and 18 U.S.C. § 1514A(e). Federal courts routinely look to

federal common law to determine the preclusive effect of a

federal-court judgment confirming an arbitration award.

Here, Cong ress has expressly removed SOX

whistleblower actions from the scope of mandatory,

predispute arbitration. Nothing in § 1514A(e) prohibits

confirming an arbitral award as to other arbitrable claims;

however, that confirmation does not magically endow the

arbitrator with authority over a category of claim that

Congress has declared non-arbitrable. The question is

whether federal common law, a body of law that already

accommodates legislative restrictions on arbitration,

permits the confirmed award to estop Petitioner’s SOX

claim in federal court. As Judge Collins rightly concludes,

it does not.

B. The Gardner-Denver Rule Bars Preclusive

Effect Where the Arbitrator Lacked Statutory

Authority

Under Gardner-Denver Co., and McDonald, an

arbitrator’s findings cannot preclude subsequent litigation

of statutory rights if that arbitrator was not authorized

to resolve the statutory claims at issue. See GardnerDenver Co., 415 U.S. 36; McDonald, 466 U.S. 284. In

those decisions, the Supreme Court cautioned that when

Congress mandates judicial enforceability and explicitly

excludes certain claims from arbitration, a private arbitral

panel cannot substitute for federal-court adjudication of

those rights.

Judge Collins emphasizes that Pyett preserves the

Gardner-Denver rule in narrow circumstances: the rule

applies only where “arbitrators were not authorized

to resolve [the] statutory claims.” Pyett at 264. That

principle fits the present case perfectly. By forbidding

any predispute arbitration agreement from compelling a

SOX whistleblower action, § 1514A(e) strips arbitrators of

authority to adjudicate the merits of such claims. Because

the arbitrator here lacked statutory authorization, the

result reached in arbitration cannot bar Petitioner from

litigating his SOX claim in federal court, even if the

arbitral award was later confirmed.

Confirming the Award Cannot Retroactively

Cure the Arbitrator’s Lack of Authority

Converting the arbitral outcome into a f inal,

enforceable judgment through court confirmation does

not remedy the underlying defect: an arbitral panel cannot

determine the outcome of a SOX claim. Confirmation under

the FAA is typically a ministerial process, ensuring there

was no fraud or act beyond the arbitrator’s jurisdiction

with respect to the claims that were, in fact, arbitrable.

It does not purport to confer jurisdiction over a category

of claim that Congress categorically exempted from

arbitration.

Judge Collins underscores that McDonald rejected

the idea that any generic full faith and credit principle

automatically binds federal courts to respect an arbitral

adjudication of a claim Congress has placed outside

the arbitration forum. Pet. App. 1a at 31. Confirmation

in federal court does not expand the scope of what the

arbitrator could validly decide. Thus, the district court’s

limited confirmation proceeding does not address whether

Petitioner’s SOX whistleblower cause of action should have

been resolved by an arbitrator at all, it simply ratifies the

outcome for the arbitrable claims.

Federal Common Law Principles Protect the

Statutory Right to a Judicial Forum

Finally, applying the federal common law of preclusion

to block Petitioner’s SOX suit would run afoul of the legal

policy recognized by the Supreme Court that certain

claims, like those under Title VII in Gardner-Denver,

are judicially enforceable and may not be displaced by

arbitral factfinding. See Gardner-Denver Co., 415 U.S. 36.

Here, Congress explicitly removed SOX claims from the

arbitral domain, underscoring their importance to public

enforcement of financial and securities regulations.

In light of that unambiguous legislative choice, an

arbitral decision on related but arbitrable matters (like

a Dodd-Frank claim) cannot negate Petitioner’s right

to independent judicial determination of his SOX claim.

Allowing the confirmed award to control the factual

questions central to the SOX claim, contrary to Congress’s

clear ban on forced arbitration, would obviate the statutory

protection intended by Congress by enacting SOX.

Federal common law, as reflected in Gardner-Denver and

its progeny, preserves the non-arbitrable claim’s vitality

in federal court.

III. A Confirmed Arbitration Award Cannot Displace

Congress’s Express Requirement That SOX

Whistleblower Claims Be Litigated in a Judicial

Forum

Respondents and the panel majority erroneously rely

on the fact that the arbitration award here was confirmed in

the district court, contending that this transformed it into

a “final judgment” with full preclusive effect on Petitioner’s

Sarbanes-Oxley (SOX) whistleblower retaliation claim.

Such reliance overlooks the core statutory command

of 18 U.S.C. § 1514A(e), which unambiguously removes

SOX claims from the scope of any predispute arbitration

agreement. Indeed, as Judge Collins’s dissent underscores,

the mere formality of having a district court confirm an

arbitral award does not authorize the arbitrator, or, by

extension, the parties, to deprive a whistleblower of the

judicial resolution mandated by the Sarbanes-Oxley Act.

Confirmation Does Not Constitute a Merits

Review of SOX Claims.

In routine practice under the Federal Arbitration

Act, a court’s confirmation of an award is not a de novo

review; it is an extremely limited proceeding ensuring

the award has no fatal flaws such as fraud or exceeding

arbitral powers.

The district court here was not acting as a finder

of fact; it neither reviewed the evidence underlying the

arbitrator’s conclusions nor retried the disputed factual

elements that are essential to a SOX claim.

Congress specifically designed 18 U.S.C. § 1514A(e)

to prevent such factual questions from being resolved in

arbitration in the first place. Whether an award is labeled

“confirmed” does nothing to cure the underlying defect: a

private arbitral tribunal is barred from determining SOX

whistleblower issues.

B. The Majority’s Reasoning Misconstrues the

Significance of Confirmation of an Arbitration

Decision by a District Court.

The panel majority’s conclusion turns on the idea

that a confirmed arbitration award “has the same force

and effect” as any final judgment. See 9 U.S.C. § 13;

Hansen, 122 F.4th 1162. Yet, as Judge Collins points out

in the dissent, this uncontroversial principle applies only

to awards that could properly be arbitrated in the first

place. Id.

The McDonald and the Gardner-Denver line of

Supreme Court cases stand for the opposite proposition

in contexts where Congress forbids arbitration of the

statutory right at issue. A district court’s ministerial act of

converting an ineligible arbitral award into a “judgment”

does not expand the arbitrator’s statutory authority

retroactively.

District court confirmation under the FAA is not a

process in which the court examines all the relevant facts,

hears testimony, or applies the statutory criteria of SOX’s

whistleblower provisions.

Rather, the court simply recognized the arbitrator’s

award on those other claims. That recognition cannot

vicariously do what Congress expressly forbade, i.e.,

letting a private tribunal’s findings stand in lieu of an

actual judicial determination on Petitioner’s SOX claim.

Section 1514A(e) Explicitly Prohibits Predispute

Arbitration of SOX Claims.

Congress was not equivocal: “No predispute arbitration

agreement shall be valid or enforceable” for a SarbanesOxley whistleblower dispute. 18 U.S.C. § 1514A(e)(2).

The entire point is to protect the whistleblower’s

right to a federal judicial forum for matters involving

major corporate or securities-related fraud. If such claims

could be implicitly resolved by an arbitrator’s findings on

overlapping issues, and then smuggled back to the district

court for a perfunctory confirmation, it would defeat the

precise purpose of the statutory prohibition.

As Judge Collins emphasizes, Pyett held that when

arbitrators are not authorized to resolve the particular

statutory claim at issue, any ensuing award cannot

preclude or bar that claim in federal court. The difference

between an unconfirmed and confirmed arbitral decision

is immaterial if the tribunal lacked statutory authority to

dispose of the claim.

Policy Considerations Reinforce Congress’s

Mandate.

Sarbanes-Oxley’s whistleblower protections were

enacted to encourage employees to report significant

corporate or securities violations. Removing these cases

from a private arbitral setting is part of ensuring a robust,

public airing of wrongdoing.

If a minimal confirmation proceeding can transmute

an arbitration panel’s factual conclusions into a judicial

outcome, then the statutory bar on arbitration for SOX

claims is eviscerated. Potential whistleblowers, knowing

any related arbitration might inadvertently resolve the

same factual issues, would be dissuaded from coming

forward.

In short, no amount of confirmation can legitimize

an award that exceeds the arbitrator’s authority or

contravenes explicit congressional directives. The district

court’s limited review under the FAA does not grapple

with the substantive merits of the SOX claim, nor does

it somehow grant the arbitrator the power to decide

issues that Congress reserved for the federal judiciary.

As Judge Collins correctly observed, the statutory text

and longstanding precedents foreclose the conclusion

that confirmation transforms an otherwise unauthorized

arbitral decision into a bar against litigating the SOX

whistleblower cause of action.

IV. The Ruling Undercuts the Vital Federal Interest in

Robust Whistleblower Protections and Opens the

Door to Forum Shopping by Erratically Disparate

Outcomes Based on Circumstance.

Impedes Effective Oversight of Corporate

Misconduct

Sarbanes-Oxley arose from major corporate and

accounting scandals (e.g., Enron, WorldCom) that

undermined public confidence in financial markets. At

its heart is the goal of encouraging employees to come

forward with information about financial fraud, securities

violations, and other serious wrongdoing, thereby ensuring

better oversight of corporate conduct.

By endorsing a framework in which an arbitrator’s

ruling on related or tangential claims can effectively

preclude the statutorily protected SOX claim, the panel’s

decision chills legitimate whistleblowing. Employees

with knowledge of potential fraud will think twice before

reporting if they fear that unrelated arbitration findings,

on issues never meant to be resolved there, can foreclose

their day in court. This outcome directly undermines

Congress’s determination that whistleblowers should have

unrestricted access to a judicial forum.

B. Contrary to Express Congressional Policy and

Intent

Sarbanes-Oxley is not merely silent on arbitrability; it

explicitly bans any predispute arbitration agreement that

compels a SOX whistleblower claim out of federal court. 18

U.S.C. § 1514A(e). Rather than leaving arbitration optional

if mutually agreed, Congress categorically barred it to

protect individuals exposing serious wrongdoing.

Letting an arbitral panel decide, or effectively decide

through overlapping factual conclusions on related claims,

whether the employee engaged in protected activity

imposes precisely the condition Congress sought to

prohibit. The whistleblower thus finds key elements of the

SOX claim resolved behind closed doors, never subjected

to a proper judicial assessment under the statutory

framework. Such a result is anathema to § 1514A(e)’s text

and purpose.

The Supreme Court has consistently recognized

that protecting whistleblowers is crucial to uncovering

large-scale corporate or securities fraud. If lower courts

can use an arbitrator’s tangential findings to block a

claim that Congress insisted be heard in federal court,

public trust in the regulatory and legal system erodes.

Corporations may leverage arbitration clauses to sidestep

comprehensive judicial scrutiny, which is precisely what

SOX was designed to prevent.

Departure From Supreme Court Precedent

and the Risk of Forum Shopping Undermine

the Public Interest

By ruling as it did, the Ninth Circuit’s decision departs

from the narrowly drawn Supreme Court precedents (e.g.,

Alexander v. Gardner-Denver Co. and McDonald v. City

of West Branch) that protect statutory claims Congress

has expressly removed from the arbitration sphere.

Rather than honor those rulings’ admonitions against

using arbitral findings to extinguish non-arbitrable rights,

the majority decision fosters a result contrary to that

Supreme Court guidance.

If a party can exploit this precedent to steer tangential

claims into arbitration, knowing that any adverse factual

findings might be confirmed and then wielded as a weapon

of preclusion, unscrupulous litigants could effectively game

the system. This invites a race to arbitrate on collateral

issues and then argue that the whistleblower’s SOX claim

is precluded, despite Congress’s absolute prohibition.

Sarbanes-Oxley was enacted in the wake of corporate

scandals that shook public confidence in the integrity

of financial and securities markets. The statute’s

whistleblower protections are intended to encourage

employees to expose wrongdoing. Allowing a de facto endrun around that protection by using collateral arbitration

determinations, under the guise of confirmation, thus

strikes at the heart of Congress’s will and disserves the

public interest in transparent corporate governance.

These troubling consequences, i.e. the nullification of a

critical statutory protection, the open invitation to forum

shop against SOX whistleblowers, and the departure from

Supreme Court precedent, render this issue fit for the

Supreme Court’s immediate review. The decision below, if

left standing, will discourage whistleblowers and threaten

the comprehensive oversight regime Congress sought to

impose through Sarbanes-Oxley.

CONCLUSION

For the foregoing reasons—and particularly for those

set forth in Judge Collins’s well-reasoned dissent—this

Court should grant the petition for a writ of certiorari,

reverse the judgment below as it pertains to the

Sarbanes-Oxley whistleblower claim, and remand for

further proceedings consistent with Congress’s explicit

prohibition on the mandatory arbitration of such claims.

Respectfully submitted,

Robert L. Sirianni, Jr.

Counsel of Record

Brownstone, P.A.

P.O. Box 2047

Winter Park, FL 32790

(407) 388-1900

robertsirianni@

brownstonelaw.com

Counsel for Petitioner

APPENDIX

TABLE OF APPENDICES

Page

APPENDIX A — OPINION OF THE UNITED

STAT ES COU RT OF A PPEA LS FOR

T H E N I N T H C I R C U I T, F I L ED

DECEMBER 10, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . 1a

APPENDIX B — MINUTE ORDER OF THE

UNITED STATES DISTRICT COURT

F OR T H E DI S T R IC T OF N E VA DA ,

FILED JULY 25, 2022 . . . . . . . . . . . . . . . . . . . . . . . 37a

A PPENDIX C — FINAL ARBITRATION

AWARD, FILED AUGUST 16, 2022 . . . . . . . . . . . . 39a

APPENDIX D — RELEVANT STATUTORY

PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58a

APPENDIX A — Appendix

OPINIONAOF THE UNITED

STATES COURT OF APPEALS FOR THE NINTH

CIRCUIT, FILED DECEMBER 10, 2024

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 23-15296

KARL HANSEN,

Plaintiff-Appellant,

ELON MUSK; TESLA MOTORS, INC.; U.S.

SECURITIES ASSOCIATES, INC.,

Defendants-Appellees.

Argued and Submitted May 14, 2024

Pasadena, California

Filed December 10, 2024

Appeal from the United States District Court for the

District of Nevada; D.C. No. 3:19-cv-00413-LRH-CSD,

Larry R. Hicks, District Judge, Presiding

Before: Daniel P. Collins, Holly A. Thomas, and

Anthony D. Johnstone, Circuit Judges.

Opinion by Judge H.A. Thomas; Partial

Concurrence and Partial Dissent by Judge Collins

Appendix A

OPINION

H.A. THOMAS, Circuit Judge.

The plain language of the Sarbanes-Oxley Act of

2002 (SOX) prevents SOX claims from being subject

to mandatory predispute arbitration agreements. 18

U.S.C. § 1514A(e). This case raises the question whether

a federal-court order confirming an arbitrator’s decision

can nevertheless have a preclusive effect in a SOX suit

filed in federal court.

We hold that, although an arbitrator’s decision

can never preclude a SOX claim, a confirmed arbitral

award can sometimes preclude relitigation of the issues

underlying such a claim. And, in this case, we hold that

relitigation of the dispositive issues underlying Karl

Hansen’s SOX claim is precluded by a confirmed arbitral

award that also conclusively resolves Hansen’s other

claims. We therefore affirm the district court’s order

dismissing Hansen’s complaint.

On July 19, 2019, Karl Hansen brought this lawsuit

claiming that Tesla, Inc., Tesla’s CEO Elon Musk, and

U.S. Security Associates (USSA) (collectively, Defendants)

retaliated against him for reporting misconduct at Tesla

to Tesla’s management and the Securities and Exchange

Appendix A

Commission (SEC).1 As alleged in Hansen’s complaint,

Hansen was hired as a protection associate by Tesla in

March 2018, and in subsequent months was assigned to

work as an investigations case specialist at Tesla’s Nevada

Gigafactory. While in those roles, Hansen investigated

what he believed to be thefts at the Gigafactory costing

Tesla tens of millions of dollars, as well as narcotics

trafficking at the Gigafactory conducted in connection

with Mexican drug cartels. Hansen also investigated

contracts that he believed senior management at Tesla

had improperly awarded. And he expressed concerns

over the monitoring of employee communications by

Tesla’s Senior Manager of Global Security, including

wiretapping and hacking. Hansen reported the findings

of his investigations to Tesla’s management. His reporting

eventually reached Musk.

In June 2018, Tesla terminated Hansen’s employment,

citing internal restructuring. Hansen accepted an offer

to work at USSA, with which Tesla contracted to provide

security services. Hansen continued his investigations of

alleged thefts and ties to criminal organizations at Tesla.

He requested coordination with local, state, and federal

law enforcement due to what he saw as the complexities

of the case and informed his supervisors about a possible

cover-up by senior management. On August 9, 2018,

Hansen also filed an SEC report about Tesla’s alleged

misconduct.

1. Although Hansen’s complaint also names Tesla Motors,

Inc. as a defendant, he does not bring any claims against that

entity.

Appendix A

On August 30, 2018, Musk saw Hansen stationed at

an entrance to the Gigafactory and demanded that he be

removed from his post. USSA subsequently told Hansen

that his position at the Gigafactory had been eliminated

and that he would be trained for a different position

unrelated to Tesla. Hansen alleges that he was removed

in retaliation for reporting misconduct at Tesla to his

supervisors and the SEC.

After Hansen filed his complaint, Defendants filed

motions to compel arbitration of most claims on the

ground that Hansen’s employment agreement with USSA

contained a provision mandating arbitration of disputes

arising out of his assignment at Tesla. Defendants,

however, did not move to compel arbitration of Hansen’s

SOX claim, which federal law states may not be subject

to any “predispute arbitration agreement.” 18 U.S.C.

§ 1514A(e)(2).

The district court granted the motions, ordering most

of Hansen’s claims to arbitration. Hansen v. Musk, No.

19-cv-00413, 2020 WL 4004800, at *3-4 (D. Nev. July 25,

2020). The district court stayed proceedings with respect

to Hansen’s SOX claim, finding that it “ar[o]se from the

same conduct” as his other claims. Id. at *8.

Before the arbitrator, Hansen brought multiple new

claims, including claims for violations of the federal and

Appendix A

Nevada Racketeer Influenced and Corrupt Organizations

(RICO) Acts, and violation of the Dodd-Frank Wall Street

Reform and Consumer Protection Act’s (Dodd-Frank)

protections for whistleblowers. The arbitrator disposed

of Hansen’s RICO claims in two interim awards, holding

that Hansen had failed to adequately allege either a

pattern of racketeering activity or a cognizable injury. The

arbitrator granted summary judgment to Defendants on

Hansen’s claim for breach of contract and one of his claims

for tortious interference with his contractual relationship

with USSA, finding that Hansen had no contractual right

to continue working at the Gigafactory.

The arbitrator issued a final award on June 8, 2022,

rejecting Hansen’s remaining claim of tortious interference

with contract and his claim of retaliation under DoddFrank. The arbitrator found the tortious interference

claim failed because Hansen had no contractual right to be

assigned to work at the Gigafactory. As to the Dodd-Frank

claim, the arbitrator explained that Hansen had been

transferred from Tesla to USSA because Tesla outsourced

the work of all employees with Hansen’s job position to

USSA. And the arbitrator found that Hansen’s position

at the Gigafactory had not been terminated because of

his complaint to the SEC, but rather because Hansen had

emailed significant amounts of confidential information to

third parties, and then attempted to cover his tracks by

deleting the emails from his “sent” folder. The arbitrator

also found that USSA could not have retaliated against

Hansen for any protected activity because USSA had

never been made aware of the activity that Hansen

claimed was protected.

Appendix A

Explaining that, to be entitled to Dodd-Frank’s

whistleblower protections, Hansen must further prove that

a reasonable person would have believed that the activities

he reported violated securities laws, the arbitrator

concluded that Hansen could not have reasonably held

such a belief. The arbitrator explained that Hansen’s

complaints referenced only “[g]arden variety theft and

drug violations[,] . . . matters governed by state and local

law, not Dodd-Frank.” The arbitrator noted that Hansen

had not provided any argument to the contrary, and that

Hansen had indeed testified that he was not even aware

of what was reported to Tesla’s shareholders or included

in its financial statements.

After the arbitrator’s decision, Defendants filed

a motion before the district court to lift the stay of

proceedings, including the stay of the SOX claim, and to

confirm the arbitration award. Hansen did not oppose the

motion, which the district court granted on July 25, 2022.

Defendants then filed motions to dismiss the entire suit,

arguing that the arbitrator’s findings precluded Hansen

from relitigating the questions whether he engaged

in protected activity, whether USSA knew about any

protected activity, and whether USSA took adverse action

against Hansen on the basis of protected activity—issues

that were also key to Hansen’s SOX claim.

The district court granted Defendants’ motions and

dismissed the case. The district court first cited our

decision in Clark v. Bear Stearns & Co., 966 F.2d 1318

(9th Cir. 1992), for the proposition that an arbitral award

Appendix A

can have a preclusive effect on securities law claims, such

as Hansen’s SOX claim. The district court then held that

Hansen could not relitigate whether he had engaged in

protected activity in pursuing his SOX claim because

the arbitrator had found that Hansen had not engaged in

any protected activity at all, and Hansen had a full and

fair opportunity to litigate that issue. The district court

emphasized the arbitrator’s finding that Hansen could not

have reasonably believed the subject of his complaint was

related to any violation of securities laws. And the district

court noted that Hansen did not claim to blow the whistle

regarding any other kind of fraud covered by SOX. The

district court therefore dismissed Hansen’s SOX claim

with prejudice. This appeal followed.

II.

We have jurisdiction under 28 U.S.C. § 1291. “We

review dismissals for failure to state a claim under Federal

Rule of Civil Procedure 12(b)(6) de novo and may affirm

on any ground supported by the record.” Saloojas, Inc.

v. Aetna Health of Cal., Inc., 80 F.4th 1011, 1014 (9th Cir.

2023). “We also review de novo whether issue preclusion

is available,” and if it is, we review for abuse of discretion

“the district court’s decision to apply the doctrine.” SEC

v. Stein, 906 F.3d 823, 828 (9th Cir. 2018).

III.

In general, a “federal-court order confirming an

arbitration award has ‘the same force and effect’ as a

Appendix A

final judgment on the merits, 9 U.S.C. § 13, including the

same preclusive effect.” 2 NTCH-WA, Inc. v. ZTE Corp.,

921 F.3d 1175, 1180 (9th Cir. 2019). Claims brought under

SOX’s anti-retaliation provision, however, may not be

committed to arbitration by a “predispute arbitration

agreement.” 18 U.S.C. § 1514A(e). Hansen argues that

giving preclusive effect to the arbitrator’s decision as to

the issues underlying his SOX claim would violate this

statutory command, because doing so would mean that

his SOX claim was effectively resolved in arbitration

proceedings. We disagree.

The Supreme Court has made clear that arbitration

proceedings generally provide a suitable forum for the

adjudication of federal claims. See 14 Penn Plaza LLC

v. Pyett, 556 U.S. 247, 265-72 (2009). But the Court has

not always taken this view. In McDonald v. City of West

Branch, the Supreme Court held that an unappealed

arbitration award could not preclude a plaintiff from

bringing a civil rights claim in federal court under 42

U.S.C. § 1983. 466 U.S. 284, 292 (1984). The Supreme

Court explained in McDonald that in certain proceedings,

“an arbitration proceeding cannot provide an adequate

substitute for a judicial trial” because arbitrators may

2. Because this case concerns the preclusive effect of an

arbitral award confirmed by a federal court exercising federal

question jurisdiction and because it concerns federal statutory

claims, we apply federal law to determine the preclusive effect

of the award. See Hawkins v. Risley, 984 F.2d 321, 324-25 (9th

Cir. 1993).

Appendix A

not always have the experience or authority to consider

Section 1983 claims, plaintiffs may not be adequately

represented during arbitration proceedings, and arbitral

factfinding procedures may not be adequate to protect

plaintiffs’ federal rights. 466 U.S. at 290-92.

In Dean Witter Reynolds, Inc. v. Byrd, however,

the Supreme Court took a step in another direction,

suggesting that arbitration awards may sometimes be

able to preclude federal claims, even when those claims

could not themselves be resolved in arbitration. 470 U.S.

213, 222 (1985). Before Byrd was decided, some federal

courts had held that arbitrable and nonarbitrable claims

needed to be considered together in federal court, because

otherwise the arbitration of the arbitrable claims might

preclude the adjudication of the nonarbitrable claims. Id.

at 222. The Supreme Court held in Byrd, however, that

federal district courts could split such claims up, sending

the arbitrable claims to arbitration and adjudicating

the nonarbitrable claims themselves. Id. at 221-24. As

to the possibility that doing so might have a preclusive

effect on litigation concerning nonarbitrable claims, the

Court, citing McDonald as an example, noted that federal

courts had tools to deal with this: namely, by determining

what preclusive effect should be given to arbitration

proceedings. 3 Id. at 223.

Following Byrd, federal courts of appeals held

that arbitral awards could have a preclusive effect

3. Byrd nevertheless explicitly declined to decide whether

such preclusion was permissible. Id. at 223.

10a

Appendix A

over nonarbitrable claims, but that this effect must

be determined on a case-by-case basis. In Greenblatt

v. Drexel Burnham Lambert, Inc., for example, the

Eleventh Circuit held that an arbitration award precluded

the plaintiff from asserting certain predicate acts in a

subsequent RICO claim. 763 F.2d 1352, 1359 (11th Cir.

1985). Noting that some courts had found RICO claims to

be nonarbitrable, the Eleventh Circuit nevertheless held

that the application of issue preclusion was appropriate

in that case because the arbitration procedures employed

“adequately protected the rights of the parties.” Id. at

1361. Our court, in turn, cited Greenblatt’s reasoning

with approval in C.D. Anderson & Co. v. Lemos, 832 F.2d

1097 (9th Cir. 1987). There, we held that a plaintiff could

not relitigate securities claims in federal court that had

already been resolved in arbitration.4 Id. at 1099-1100.

Then, in our 1992 decision in Clark, we held that “[a]n

arbitration decision can have res judicata or collateral

estoppel effect even if the underlying claim involves the

federal securities laws.” 966 F.2d at 1321 (citing C.D.

Anderson & Co., 832, F.2d at 1100).

Although our decisions in C.D. Anderson & Co. and

Clark indicate that nonarbitrable securities claims may be

subject to preclusion from arbitral awards, those decisions

did not directly address the question this case presents.

4. Before the Supreme Court’s 1987 decision in Shearson/

American Express, Inc. v. McMahon, 482 U.S. 220 (1987), we had

held that Exchange Act claims could not be subject to arbitration.

Id. at 225 n.1. In C.D. Anderson & Co., we declined to reach

whether Shearson had a retroactive effect because the parties

had voluntarily submitted their case to arbitration and our holding

was consistent with Shearson. 832 F.2d at 1099.

11a

Appendix A

In C.D. Anderson & Co., we considered only whether an

arbitral award resolving a claim could preclude litigation

of the same claim in federal court. 832 F.2d at 1099-1100.

And in Clark, we considered the preclusive effect of an

arbitral award on a claim made non-arbitrable by contract.

966 F.2d at 1321 n.2. We therefore did not consider in those

cases whether a confirmed arbitration award resolving

an arbitrable claim could preclude a separate claim made

nonarbitrable by statute.

Hansen invokes the Supreme Court’s decision in Byrd

to argue that the arbitrator’s resolution of his DoddFrank claim should not have any preclusive effect over

his nonarbitrable SOX claim. Specifically, he references

the Court’s statement in that case that the preclusive

effect of arbitration proceedings on nonarbitrable claims

was “far from certain.” Byrd, 470 U.S. at 222. But as the

history recounted above makes clear, Hansen’s reliance

on that decision is misplaced. Byrd specifically left open

the question whether arbitration proceedings could have

a preclusive effect on nonarbitrable claims. Id. at 223.

And, just as Byrd “foreshadowed” our conclusions in C.D.

Anderson & Co. and Clark, so too did those decisions

foreshadow the conclusion we reach today. Clark, 966

F.2d at 1321.

It is true, as Hansen argues, that Congress has

directed that SOX claims may not themselves be compelled

12a

Appendix A

to binding arbitration under a predispute agreement. 18

U.S.C. § 1514A(e)(2). But that declaration does not serve

as a bar to the arbitrator’s resolution of issues that may,

as in this case, bear directly on the merits of a SOX

claim. Nor does it prevent that resolution from having a

preclusive effect.

The Supreme Court has “ma[d]e clear that issue

preclusion is not limited to those situations in which the

same issue is before two courts.” B & B Hardware, Inc.

v. Hargis Indus., Inc., 575 U.S. 138, 148 (2015). Agencies,

for example, may be unable to adjudicate certain federal

claims or lack certain procedural protections—such as

the right to a jury trial—guaranteed in federal court.

See id. at 150 (considering an argument that granting

preclusive effect to a federal agency decision could

potentially violate the jury trial right). But the Supreme

Court has nevertheless held as a matter of common law

that an agency’s resolution of issues properly before it can

have a preclusive effect. Id.; see also United States v. Utah

Constr. & Mining Co., 384 U.S. 394, 422 (1966) (“When

an administrative agency is acting in a judicial capacity

and resolved disputed issues of fact properly before it

which the parties have had an adequate opportunity to

litigate, the courts have not hesitated to apply res judicata

to enforce repose.”).

Indeed, this holding has been applied to confer

preclusive effect over state agency proceedings, even

though the applicable statute requiring that federal

courts give “full faith and credit” to state proceedings

does not mention state agencies. 28 U.S.C. § 1738; see also

13a

Appendix A

Jamgotchian v. Ferraro, 93 F.4th 1150, 1154 (9th Cir. 2024)

(explaining that although 28 U.S.C. § 1738 “does not apply

to state administrative agency decisions . . . the Supreme

Court has held that, as a matter of federal common law,

federal courts must sometimes accord preclusive effect

to state agency decisions” (citation omitted)). We thus

explained in Guild Wineries & Distilleries v. Whitehall

Co., that the decisions of state agencies may have a

preclusive effect “so long as the state proceeding satisfies

the requirements of fairness outlined” by the Supreme

Court. 5 853 F.2d 755, 758 (9th Cir. 1988) (citing Utah

Constr., 384 U.S. at 422).

Here, by contrast, we need not rely on the common law.

The Federal Arbitration Act contains an express statutory

command that a federal-court judgment confirming an

arbitrator’s decision be given “‘the same force and effect’”

as any other judgment from a federal court, “including the

same preclusive effect.” NTCH-WA, Inc., 921 F.3d at 1180

(quoting 9 U.S.C. § 13). And although 18 U.S.C. § 1514A(e)

states that SOX claims may not themselves be subject to

predispute arbitration agreements, nothing in the statute

clearly limits the issue-preclusive force of a confirmed

arbitral award’s resolution of issues within the arbitrator’s

5. Streng thening the analog y bet ween arbitral and

administrative proceedings, we also apply the Utah Construction

factors to determine “whether an arbitration was sufficiently

adjudicatory in nature” to have a preclusive effect in a federal

court case. Jacobs v. CBS Broad., Inc., 291 F.3d 1173, 1178 (9th

Cir. 2002) (relying on California Supreme Court precedent that

applied the Utah Construction factors). Here, however, no party

has argued that the arbitration proceedings were insufficiently

adjudicatory under Utah Construction.

14a

Appendix A

jurisdiction. Cf. Howard v. City of Coos Bay, 871 F.3d 1032,

1040-44 (9th Cir. 2017) (finding that, even though a prior

judgment could not have addressed the plaintiff’s present

claim, issue preclusion applied because it “bars ‘successive

litigation of an issue of fact or law actually litigated and

resolved in a valid court determination essential to the

prior judgment,’ even if the issue recurs in the context

of a different claim” (quoting Taylor v. Sturgell, 553 U.S.

880, 892 (2008))).

Absent a “clear and manifest” expression of

congressional intent, we will not presume that another

statute has displaced the Federal Arbitration Act’s

requirements. See Epic Sys. Corp. v. Lewis, 584 U.S. 497,

510 (2018) (quoting Morton v. Mancari, 417 U.S. 535, 551

(1974)). We therefore see no reason to exempt SOX claims

from the preclusive effect afforded to confirmed arbitral

awards.6

6. The dissent would hold that Alexander v. Gardner-Denver

Co., 415 U.S. 36 (1974), and its progeny compel us to read such a

limitation into SOX. That line of cases held that arbitration awards

can have no preclusive effect in subsequent statutory actions if the

“arbitrators were not authorized to resolve such claims.” Pyett,

556 U.S. at 264. But those cases concerned only unconfirmed

arbitration awards. See Gardner-Denver, 415 U.S. at 42-43;

Barrentine v. Arkansas-Best Freight Sys., Inc. 450 U.S. 728,

730-731 (1981); McDonald, 466 U.S. at 286. “[T]he considerations

that motivated the Supreme Court to deny preclusive effect to

unreviewed arbitration decisions are not present in a case like

the one before us, which involves a reviewed arbitration decision.”

Caldeira v. County of Kauai, 866 F.2d 1175, 1178 (9th Cir. 1989).

And treating confirmed and unconfirmed arbitral awards equally

would ignore the FAA’s command that confirmed awards “shall

have the same force and effect” as a judgment. 9 U.S.C. § 13.

15a

Appendix A

Contrary to Hansen’s argument, our holding does not

circumvent the statutory restriction on the arbitration of

SOX claims. 18 U.S.C. § 1514A(e)(2). That restriction still

has force. First, because “the plaintiff is ‘the master of

the complaint,’” she may always avoid a preclusive arbitral

award by declining to plead arbitrable claims along with

a SOX claim, where the arbitration might resolve issues

necessary for a SOX claim’s success. See Holmes Grp.,

Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826,

831 (2002) (quoting Caterpillar Inc. v. Williams, 482 U.S.

386, 398-99 (1987)). Indeed, Hansen himself initially took

this route. His complaint before the federal district court

did not allege a Dodd-Frank claim, which Hansen raised

for the first time before the arbitrator.

Second, as the Supreme Court explained in Byrd,

courts can continue to apply conventional “preclusion

doctrine” to “directly and effectively protect federal

interests by determining the preclusive effect to be given

to an arbitration proceeding.” 470 U.S. at 223. For example,

courts must insist that arbitration proceedings provide a

“full and fair opportunity to litigate” the preclusive issue,

and that “the issue was actually litigated and decided” in

the arbitration proceedings. Howard, 871 F.3d at 1041

(quoting Oyeniran v. Holder, 672 F.3d 800, 806 (9th Cir.

2012)); Clark, 966 F.2d at 1322-23 (declining to confer

preclusive effect on an arbitral award because the record

was insufficient “to pinpoint the exact issues previously

determined”). Both plaintiffs and courts therefore retain

tools to protect the statutory right to federal adjudication

of SOX claims.

16a

Appendix A

Traditional preclusion doctrine holds that an issue

resolved by a prior proceeding is precluded from

relitigation if “(1) the issue at stake was identical in

both proceedings; (2) the issue was actually litigated

and decided in the prior proceedings; (3) there was a

full and fair opportunity to litigate the issue; and (4) the

issue was necessary to decide the merits.” Howard, 871

F.3d at 1041 (quoting Oyeniran, 672 F.3d at 806). The

Supreme Court’s decision in McDonald, 466 U.S. at 29091, and the Eleventh Circuit’s decision in Greenblatt,

763 F.2d at 1361, however, suggest that “at least with

respect to an important, nonarbitrable federal claim,”

courts should be “hesitant to preclude the litigation of

[a] federal claim based on the [issue preclusive] effects

of a prior arbitration award.” Greenblatt, 763 F.2d at

1361. These decisions instead indicate that courts should

consider additional factors beyond those contemplated by

conventional preclusion doctrine, including “the federal

interests in insuring a federal court determination of the

federal claim,” the “expertise of the arbitrator,” and “the

procedural adequacy of the arbitration proceeding.” Id.;

McDonald, 466 U.S. at 290-91. Based on these decisions,

Hansen urges us to take a “case-by-case approach to

determining the [issue preclusive] effects of arbitration.”

Greenblatt, 763 F.2d at 1361. But we need not decide

whether to do so here. Regardless of whether there are

ever circumstances—beyond those contemplated by

conventional preclusion doctrine—under which courts

may decline to confer a preclusive effect on an arbitral

award, such circumstances are not present in this case.

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Unlike the factors the Court found controlling in

McDonald, for example, Hansen points to no deficiency

in the arbitrator’s experience or expertise in adjudicating

federal statutory claims. Cf. McDonald, 466 U.S. at

290-91. Nor can he, given the Supreme Court’s holding

in Shearson, 482 U.S. at 227-39, point to a general

rule limiting the arbitrator’s ability to consider federal

securities law claims. Quite to the contrary, the arbitrator

considered and resolved Hansen’s Dodd-Frank claim—a

securities law claim which, as we will further explain, has

similar elements to Hansen’s SOX claim.

Hansen also does not identify any deficiencies in

the arbitration procedures themselves. Hansen and

Defendants were represented by counsel and able to

present relevant evidence. Cf. Greenblatt, 763 F.2d at 1361.

Hansen therefore provides no legal or prudential reason

to deny preclusive effect to the arbitrator’s decision.

IV.

Hansen argues that even if a confirmed arbitral

decision can preclude relitigating issues in the litigation

of a subsequent, nonarbitrable claim, the arbitrator’s

findings in this case do not have issue preclusive effect on

his present claim under SOX. We again disagree.

“Issue preclusion, or collateral estoppel, ‘bars

successive litigation of an issue of fact or law actually

litigated and resolved in a valid court determination

essential to the prior judgment,’ even if the issue recurs in

the context of a different claim.” Howard, 871 F.3d at 104041 (quoting Taylor, 553 U.S. at 892). For issue preclusion

18a

Appendix A

to apply, the party seeking preclusion must show “(1)

the issue at stake was identical in both proceedings; (2)

the issue was actually litigated and decided in the prior

proceedings; (3) there was a full and fair opportunity

to litigate the issue; and (4) the issue was necessary to

decide the merits.” Id. at 1041 (quoting Oyeniran, 672

F.3d at 806).

The district court correctly held that key aspects of

Hansen’s SOX claim were precluded by the arbitrator’s

findings resolving his Dodd-Frank claim. Dodd-Frank

prohibits an employer from taking an adverse employment

action or discriminating against a “whistleblower”

because of “any lawful act” the whistleblower performs “(i)

in providing information to the [SEC] . . . ; (ii) in initiating,

testifying in, or assisting in any investigation or judicial

or administrative action of the [SEC] based upon or

related to such information; or (iii) in making disclosures

that are required or protected under” SOX or other

securities laws. 15 U.S.C. § 78u-6(h)(1)(A). The law defines

a “whistleblower” as a person or group who “provides

. . . information relating to a violation of the securities

laws to the [SEC], in a manner established, by rule or

regulation, by the [SEC].” Id. § 78u-6(a)(6). To receive

protection from retaliation, under the regulation in effect

at the time Hansen contacted the SEC, the whistleblower

must “possess a reasonable belief that the information . . .

provid[ed] relates to a possible securities law violation.”

Digit. Realty Tr., Inc. v. Somers, 583 U.S. 149, 158 (2018)

(quoting 17 C.F.R. § 240.21F-2(b)(1)(i) (2011)).7

7. The current version of the regulation contains a similar

requirement that a whistleblower “must reasonably believe that

the information . . . provide[d] . . . relates to a possible violation of

the federal securities laws.” 17 C.F.R. § 240.21F-2(d)(1)(ii) (2020).

19a

Appendix A

SOX provides different, although related, protections.

It protects employees of public companies from retaliation

for providing information to a supervisor, federal agency,

or Congress. 18 U.S.C. § 1514A(a). To obtain the statute’s

anti-retaliation protections, the employee must “report

what they reasonably believe to be instances of criminal

fraud or securities law violations.” Murray v. UBS Sec.,

LLC, 601 U.S. 23, 27 (2024). But while “Dodd-Frank’s

whistleblower provision . . . focuses primarily on reporting

to federal authorities,” SOX’s “protections include

employees who provide information to any ‘person with

supervisory authority over the employee.’” Lawson v.

FMR LLC, 571 U.S. 429, 456 (2014) (quoting 18 U.S.C.

§ 1514A(a)(1)(C)).

In this case, the arbitrator found that Hansen could

not have reasonably believed that the subject of his

complaint to the SEC related to any violation of securities

laws. This element is common to both Dodd-Frank and

SOX claims, and Hansen points to no difference in the

merits of what an arbitrator or court must find to resolve

that element.

Hansen does not point to any other difference that

would militate against issue preclusion. Hansen does

not argue, for example, that the issue was not “actually

litigated and decided” or that it was not “necessary to

decide the merits” of his Dodd-Frank claim. Howard, 871

F.3d at 1041 (quoting Oyeniran, 672 F.3d at 806). Nor could

he. First, the arbitrator agreed with Tesla that Hansen

had no reasonable belief that the conduct he investigated

related to a violation of the securities laws. This is

20a

Appendix A

sufficient to satisfy the “actually litigated” requirement,

which requires only that the issue be “raised, contested,

. . . submitted for determination[,] and . . . determined.”

Janjua v. Neufeld, 933 F.3d 1061, 1066 (9th Cir. 2019)

(quoting Restatement (Second) of Judgments § 27, cmt.

(d) (1982)). And this finding was “necessary” to the

arbitrator’s resolution of Hansen’s Dodd-Frank claim on

the merits, as it disposed of a key element of that claim. See

id. (explaining that even implicitly resolved issues satisfy

this factor if “necessary to the ultimate determination”).

Although Hansen argues that he did not have a full

and fair opportunity to specifically litigate his SOX

claim before the arbitrator, he mistakes the nature of

issue preclusion. The point of the doctrine is to bar the

relitigation of an issue already litigated and resolved “even

if the issue recurs in the context of a different claim.”

See Howard, 871 F.3d at 1041 (quoting Taylor, 553 U.S.

at 892). And Hansen, as just discussed, did litigate the

issue. Nor can Hansen show that he lacked a full or fair

opportunity to do so, because he identifies no deficiencies

in the procedures employed during the arbitration or in

the parties’ incentives to fully air the issue out. See Maciel

v. Comm’r, 489 F.3d 1018, 1023 (9th Cir. 2007) (explaining

the factors used to determine whether a party had a full

and fair opportunity to litigate an issue). It was thus

appropriate for the district court to apply issue preclusion

principles in dismissing this case. 8

8. Of course, SOX also prohibits retaliation against employees

who report other forms of federal criminal fraud (including bank

fraud, wire fraud, mail fraud, commodities fraud, and “fraud

against shareholders”). 18 U.S.C. § 1514A(a)(1). But Hansen

21a

Appendix A

Hansen nevertheless argues that the arbitrator’s

rejection of his Dodd-Frank claim cannot preclude his

SOX claim because SOX claims rely on a burden-shifting

framework to assess the employer’s retaliatory intent.

Under this framework, the plaintiff must first make out a

prima facie case of retaliation before the burden shifts to

the defendant to show “‘by clear and convincing evidence’

that it ‘would have taken the same unfavorable personnel

action in the absence of’ the protected activity.” Murray,

601 U.S. at 27-28 (quoting 49 U.S.C. § 42121(b)(2)(B)(ii)).

We need not elaborate on how (or even if) the burdenshifting framework for determining a defendant’s

retaliatory intent under SOX differs from the framework

for determining a defendant’s intent under Dodd-Frank.

Hansen’s claim fails regardless of Defendants’ intent. To

make out a prima facie claim under SOX, Hansen must

allege an “objectively reasonable” belief that his complaint

to the SEC reported a violation of federal securities or

fraud law. Van Asdale, 577 F.3d at 1000. But the arbitrator

found that Hansen did not have this objectively reasonable

belief. Even if a burden-shifting framework applies only

to SOX claims, the burden therefore would not shift.

makes no specific argument that he reported any such fraud,

and his complaint contains only a conclusory allegation that

Defendants committed non-securities fraud. These allegations

are not enough to sustain his claim. See Van Asdale v. Int’l Game

Tech., 577 F.3d 989, 1001 (9th Cir. 2009) (explaining that, to

demonstrate an objectively reasonable belief of shareholder fraud,

“the complaining employee’s theory of such fraud must at least

approximate the basic elements of a claim of securities fraud”

(quoting Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009))).

22a

Appendix A

Finally, Hansen argues that the arbitrator’s decision

should not have prevented him from raising his state law

claims in federal court, because the arbitrator’s dismissal

of those claims merely precluded him from raising them

again in the same forum.9 Hansen suggests that it is an

issue of first impression “whether dismissal of claims by an

arbitrator constitutes a determination on the merits” with

a preclusive effect. But on the contrary, and as we have

already discussed, it is well established that a “federalcourt order confirming an arbitration award has ‘the same

force and effect’ as a final judgment on the merits, 9 U.S.C.

§ 13, including the same preclusive effect.” NTCH-WA,

Inc., 921 F.3d at 1180.

The case law that Hansen cites in support of his

argument is inapposite. In each of these cases, the court

found only that dismissal of a claim on purely procedural

grounds did not prevent the plaintiff from reasserting the

claim in another forum. See Semtek Int’l Inc. v. Lockheed

Martin Corp., 531 U.S. 497, 499, 509 (2001) (holding that

a failure to comply with California’s statute of limitations

did not bar the claim from being raised again in Maryland

court under Maryland law, which had a longer statute of

limitations); Post, LLC v. Berkshire Hathaway Specialty

Ins. Co., No. 20-cv-2972, 2022 WL 3139022, at *1 (D.D.C.

9. As we held in NTCH-WA, Inc., state preclusion law

determines the preclusive effect of federal-court orders confirming

arbitration awards when the federal court is sitting in diversity. 921

F.3d at 1180-81. Hansen, however, raises no argument under Nevada

law nor does he argue that it differs from federal law on this issue.

23a

Appendix A

Aug. 5, 2022) (holding that an arbitrator’s dismissal

for “nonpayment of fees” did not give rise to a “claimpreclusive effect in related litigation”).

A decision that “passes directly on the substance of

a particular claim,” however, may preclude subsequent

litigation. Semtek Int’l Inc., 531 U.S. at 501-02 (cleaned up).

Here, the arbitrator addressed the substance of Hansen’s

state law claims by finding that Hansen had failed to

establish necessary elements of those claims. Those

decisions were subsequently confirmed by the district

court without opposition and are entitled to preclusive

effect.

VI.

The arbitrator’s decision precluded each of the claims

that Hansen raised before the district court. We therefore

AFFIRM the judgment of the district court dismissing

those claims.

24a

Appendix A

COLLINS, Circuit Judge, concurring in the judgment in

part and dissenting in part:

In the proceedings below, Plaintiff Karl Hansen

asserted a variety of claims against Defendants Elon

Musk; Tesla Motors, Inc.; and U.S. Security Associates,

Inc. The district court compelled arbitration of all of the

claims except for Hansen’s claim against Defendants under

the whistleblower retaliation provision of the SarbanesOxley Act. See 18 U.S.C. § 1514A. The latter claim was

not submitted to arbitration because § 1514A(e) expressly

states that the “rights and remedies provided for in this

section may not be waived by any agreement, policy form,

or condition of employment, including by a predispute

arbitration agreement,” and that “[n]o predispute

arbitration agreement shall be valid or enforceable, if the

agreement requires arbitration of a dispute arising under

this section.” Id. § 1514A(e). After the arbitration was

concluded, Defendants sought confirmation of the arbitral

award, which had rejected all of the claims submitted to

the arbitrator (which included some additional claims

that were asserted by Hansen in the arbitration and

had not been raised in Hansen’s original complaint).

Hansen did not oppose confirmation, and the district

court confirmed the award and adopted it as a “final,

enforceable judgment.” Defendants subsequently moved

to dismiss the remaining Sarbanes-Oxley claim as barred

by the issue-preclusive effect of the arbitral award, and the

district court granted that motion. Hansen has appealed

the resulting dismissal of his claims, and I would affirm

in part, reverse in part, and remand.

25a

Appendix A

For the first time on appeal, Hansen argues that the

district court committed plain error in rejecting, based

on the adverse arbitral award, several of the claims he

asserted before the arbitrator. Hansen’s arguments on this

score are frivolous. Hansen asserts that the arbitrator’s

pre-hearing dismissal of several state-law claims was not

“on the merits,” but that contention is flatly belied by the

arbitrator’s decisions. The arbitrator expressly dismissed

these claims, in advance of the arbitral evidentiary

hearing, because it was apparent either at the pleading

stage or at summary judgment that Hansen could not

satisfy one or more essential elements of these claims. The

resulting judgment confirming the award was therefore

an adverse final judgment on the merits of those claims,

and Hansen is fully bound by that judgment. I therefore

concur in the judgment to the extent that the majority

affirms the district court’s rejection of all of Hansen’s

claims other than his Sarbanes-Oxley retaliation claim.

In my view, however, the district court erred in holding

that, despite the statutory prohibition on arbitration of

Sarbanes-Oxley whistleblower retaliation claims, see 18

U.S.C. § 1514A(e), the arbitral award collaterally estopped

Hansen from litigating his Sarbanes-Oxley retaliation

claim in the district court. I therefore dissent from the

majority’s decision affirming the district court on this

point.

26a

Appendix A

In concluding that the arbitration award against

Hansen may be given preclusive effect vis-à-vis his

Sarbanes-Oxley retaliation claim, the majority places

dispositive reliance on § 13 of the Federal Arbitration Act

(“FAA”), which states in relevant part that a judgment

confirming an arbitration award “shall have the same

force and effect, in all respects, as, and be subject to all

the provisions of law relating to, a judgment in an action;

and it may be enforced as if it had been rendered in an

action in the court in which it is entered.” 9 U.S.C. § 13.

According to the majority, invoking § 1514A(e) to decline

giving preclusive effect to the confirmed arbitration

award here would improperly “displace[]” FAA § 13’s

requirements without the “‘clear and manifest’ expression

of congressional intent” necessary to support such an

asserted repeal by implication. See Opin. at 1171 (citing

Epic Sys. Corp. v. Lewis, 584 U.S. 497, 510 (2018)). But the

canon invoked in Epic Systems rests on the premise that

the “two statutes” in question “cannot be harmonized.”

584 U.S. at 510 (emphasis added). Here, the conflict posited

by the majority between the statutes is illusory, because

the majority’s reliance on § 13 is ultimately question

begging. We have said that federal common law governs

the preclusive effect, under FAA § 13, of a federal court

judgment confirming an arbitration award, see NTCHWA, Inc. v. ZTE Corp., 921 F.3d 1175, 1180 (9th Cir.

2019), and the question presented here is whether, as a

matter of federal common law, preclusive effect should

be denied in this specific context in light of the general

27a

Appendix A

nonarbitrability of Sarbanes-Oxley retaliation claims.1

Whichever way that federal common law issue under § 13

is properly resolved, there will be no resulting conflict

between the two statutes.

I turn, then, to whether, under the applicable federal

common law preclusion principles, preclusive effect

should not be given to the confirmed arbitral award in

light of § 1514A(e). In applying the federal common law

of preclusion, the federal courts have generally followed

the principles set forth in the Restatement of Judgments.

1. The majority suggests that, because federal common law

would incorporate state common law in cases in which the district

court is exercising diversity jurisdiction, see NTCH-WA, 921 F.3d

at 1180, Nevada preclusion law would presumably apply here.

See Opin. at 1175 n.9. But the district court was not exercising

diversity jurisdiction when it confirmed the arbitral award. Rather,

the district court had federal-question jurisdiction over Hansen’s

still-pending Sarbanes-Oxley claim, see 28 U.S.C. § 1331, and

supplemental jurisdiction over any related non-federal claims, id.

§ 1367(a). Accordingly, the preclusive effect of the federal judgment

confirming the arbitral award here is governed by federal common

law. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507

(2001); see also 18B Charles A lan Wright, A rthur R. Miller,

and Edward H. Cooper , Federal P ractice & P rocedure § 4472,

at p.358 (3d ed. 2019). And even if state law were borrowed as the

rule of decision, that borrowing would be limited by the principle

that any “federal reference to state law will not obtain, of course,

in situations in which the state law is incompatible with federal

interests.” Semtek, 531 U.S. at 509. For the reasons I will explain,

here there is a “federal interest[ ]” that is incompatible with the

application of issue preclusion.

28a

Appendix A

See B&B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S.

138, 148 (2015). Under § 84 of the Restatement, issue

preclusion will not be afforded to a “determination of

an issue in arbitration” if, inter alia, doing so “would

be incompatible with a legal policy . . . that the tribunal

in which the issue subsequently arises be free to make

an independent determination of the issue in question.”

Restatement (Second) of Judgments § 84(3)(a) (emphasis

added). According to comment (g) to § 84, this exception

recognizes that the “conclusive effect of an arbitration

award is subordinate” to any “statutory provisions for

alternative or supplementary procedures” governing

a dispute. Id. § 84 cmt. g. The Reporter’s Note to § 84

further states that comment (g) is based on Alexander

v. Gardner-Denver Co., 415 U.S. 36 (1974), which held

that, under the circumstances of that case, an arbitral

decision against an employee challenging his termination

under a collective bargaining agreement could not be

given preclusive effect so as to bar a subsequent racial

discrimination suit under Title VII of the Civil Rights Act

of 1964. Id. at 47-54.

In a line of subsequent cases, the Supreme Court

has explored the contours of the exception to arbitral

preclusion recognized in Gardner-Denver. In McDonald

v. City of West Branch, 466 U.S. 284 (1984), the Supreme

Court noted that, similar to Gardner-Denver, the

Court in Barrentine v. Arkansas-Best Freight System,

Inc., 450 U.S. 728 (1981), had held that an adverse

arbitration decision concerning employees’ wage claims

did not “preclude[] a subsequent suit based on the same

underlying facts alleging a violation of the minimum wage

29a

Appendix A

provisions of the Fair Labor Standards Act.” McDonald,

466 U.S. at 289. McDonald construed Barrentine and

Gardner-Denver as being “based in large part on [the

Court’s] conclusion that Congress intended the statutes

at issue in those cases to be judicially enforceable and

that arbitration could not provide an adequate substitute

for judicial proceedings in adjudicating claims under

those statutes.” Id. Applying that principle, the Court in

McDonald reached the same conclusion with respect to

an action under 42 U.S.C. § 1983, holding that arbitration

“cannot provide an adequate substitute for a judicial

proceeding in protecting the federal statutory and

constitutional rights that § 1983 is designed to safeguard.”

Id. at 290.

More recently, the Court has underscored “the

narrow scope of the legal rule arising from th[e] trilogy

of decisions” in Gardner-Denver, Barrentine, and

McDonald. 14 Penn Plaza LLC v. Pyett, 556 U.S. 247,

263 (2009). As the Court explained, those decisions “did

not involve the issue of the enforceability of an agreement

to arbitrate statutory claims,” because the employees in

those cases “had not agreed to arbitrate their statutory

claims.” Id. at 264 (citing Gilmer v. Interstate/Johnson

Lane Corp., 500 U.S. 20, 35 (1991)). The three cases

therefore addressed only whether, when the “arbitrators

were not authorized to resolve such [statutory] claims,” the

arbitral award resulting from the overlapping “contractbased claims precluded subsequent judicial resolution of

statutory claims.” Id. (citation omitted). The Pyett Court

stated that, given the arbitrators’ lack of authority to

resolve the statutory claims in that trilogy of cases, “the

30a

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arbitration in those cases understandably was held not

to preclude subsequent statutory actions.” Id. (emphasis

added). Pyett held that “Gardner-Denver and its progeny

thus do not control the outcome where, as is the case

here [in Pyett], the collective-bargaining agreement’s

arbitration provision expressly covers both statutory

and contractual discrimination claims.” Id. Because the

parties had agreed to submit the statutory claims to

arbitration, and no congressional policy overrode that

choice, Pyett held that the lower courts had erred in

refusing to compel arbitration of the statutory claims. See

id. at 257-58; see also Shearson/American Express Inc.

v. McMahon, 482 U.S. 220, 226 (1987) (stating that the

FAA generally “mandates enforcement of agreements to

arbitrate statutory claims,” subject to that mandate being

“overridden by a contrary congressional command”).

This case plainly falls within the Gardner-Denver

line of cases, even as narrowly construed in Pyett. The

Court in Pyett stated that, under the Gardner-Denver

line of cases, preclusion “understandably” would not

be afforded to an arbitral award so as to bar litigation

of a statutory claim when the “arbitrators were not

authorized to resolve such claims.” 556 U.S. at 264. That

narrow principle squarely applies here, because, in light

of § 1514A(e), the arbitrator in this case was explicitly not

authorized to decide the Sarbanes-Oxley retaliation claim.

The predicate for application of the Gardner-Denver rule

is therefore present here, and under that rule preclusive

effect may not be given, vis-à-vis the Sarbanes-Oxley

retaliation claim, to the arbitrator’s decision.

31a

Appendix A

Indeed, the result here is arguably on more solid

footing than even the Gardner-Denver trilogy of cases

themselves, because none of those cases involved a statute

with a comparably explicit prohibition on waiving judicial

remedies and opting for arbitration. Moreover, in Pyett,

the Court sharply criticized the “broad dicta” in “the

Gardner-Denver line of cases” that “were highly critical

of the use of arbitration for the vindication of statutory

antidiscrimination rights,” 556 U.S. at 265, and we

have construed the Court’s post-Gardner-Denver case

authority as “reject[ing] a reading of [Gardner-Denver] as

prohibiting the arbitration of employment discrimination

claims.” EEOC v. Luce, Forward, Hamilton & Scripps,

345 F.3d 742, 748 (9th Cir. 2003) (en banc) (emphasis

added) (citations and internal quotation marks omitted).

Thus, given that Title VII claims can be submitted to

arbitrators, there will presumably be few cases calling for

the application of the actual holding of Gardner-Denver—

viz., that an arbitral award rendered by arbitrators who

lacked authority to decide a Title VII claim will not be

given preclusive effect against such a claim. But nothing

in subsequent Supreme Court caselaw has abrogated

the narrow non-preclusion rule reaffirmed in Pyett, see

Mathews v. Denver Newspaper Agency LLP, 649 F.3d

1199, 1204-08 (10th Cir. 2011), and in light of § 1514A(e),

this case falls within that rule.

In reaching a contrary conclusion, the majority first

suggests that the Gardner-Denver line of cases is strictly

limited to “unconfirmed arbitration awards” and therefore

32a

Appendix A

cannot apply to the confirmed arbitration award at issue

in this case. See Opin. at 1172 n.6. That argument misses

the mark. McDonald emphasized the lack of judicial

confirmation in explaining why the “Federal Full Faith

and Credit Statute, 28 U.S.C. § 1738,” did not require

the Court to adhere to state-law preclusion principles in

considering the effect of the unreviewed arbitral award

in that case. McDonald, 466 U.S. at 287. As the Court

explained, the relevant language of § 1738 extends full

faith and credit only to “judicial proceedings,” and

because an “unappealed arbitral award” does not involve

a judicial judgment, § 1738 is inapplicable in the context

of such awards. Id. at 287-88. As a result, the McDonald

Court held that it was not required by § 1738 “to give

the same preclusive effect to a state-court judgment as

would the courts of the State rendering the judgment.”

Id. at 287 (emphasis added). Instead, the Court was free

to “judicially fashion[]” a federal “rule of preclusion”

as a matter of federal common law, and it fashioned the

rule that I have described above. Id. at 288. By contrast,

we have held that, under “the plain language of section

1738,” state-law preclusion principles will control when

a state court renders a judgment confirming an arbitral

award. Caldeira v. County of Kauai, 866 F.2d 1175, 1178

(9th Cir. 1989); see also id. at 1178 n.2 (noting that, by

contrast, “[t]he federal courts have frequently fashioned

federal common law rules of preclusion where § 1738

does not apply”). Here, as I have already explained,

federal common law governs the preclusive effect of the

federal district court’s confirmation of the arbitral award

rejecting Hansen’s federal and state claims. See supra

note 1. And given that the Gardner-Denver rule is part

33a

Appendix A

of the relevant federal common law preclusion principles

that govern here, it applies in this case.

The majority also claims that, in Dean Witter

Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985), the Supreme

Court undermined the Gardner-Denver non-preclusion

rule by “suggesting that arbitration awards may sometimes

be able to preclude federal claims, even when those claims

could not themselves be resolved in arbitration.” See Opin.

at 1169. Byrd said nothing of the sort. Byrd merely held

that, when confronted with both arbitrable and arguably

non-arbitrable claims, a court should not decline to compel

arbitration of the arbitrable claims based on a concern

that “the findings in the arbitration proceeding might

have collateral-estoppel effect in a subsequent federal

proceeding.” 470 U.S. at 221. Neither a stay of arbitration

nor a federal court adjudication of the arbitrable claims

was warranted on such grounds, the Court explained,

because any such preclusion-based concern can be

addressed by “the formulation of collateral-estoppel rules”

that will “afford[] adequate protection to that interest.” Id.

at 222. Far from being a rejection of the Gardner-Denver

cases’ limits on preclusion, Byrd held that arbitration

could go forward in such mixed cases precisely because

preclusive effect could later be denied to the arbitration

award if warranted. Id. In fact, Byrd specifically relied

on McDonald in concluding that, after the arbitration was

completed, the “courts may directly and effectively protect

federal interests by determining the preclusive effect to

be given to an arbitration proceeding.” Id. at 223 (citing

McDonald, 466 U.S. at 287-88).

34a

Appendix A

The majority also asserts that this court’s caselaw

has retreated from the narrowed Gardner-Denver

rule, but that too is wrong. The majority notes that we

afforded preclusive effect to an arbitration award in C.D.

Anderson & Co., Inc. v. Lemos, 832 F.2d 1097 (9th Cir.

1987). But the predicate for application of the GardnerDenver rule was not present in C.D. Anderson, and it is

therefore not surprising that we did not apply it. As we

noted in C.D. Anderson, the plaintiff had affirmatively

agreed to submit its “securities law and RICO claims” to

arbitration, despite contending that those claims were nonarbitrable and that it “could not waive its right to litigate

the claims in federal court.” Id. at 1099. We rejected the

plaintiff’s non-waivability argument and held that it had

“waived any right it had to litigate those claims in federal

court.” Id.; see also id. (holding that, in light of this valid

waiver, we assertedly did not need to decide whether we

could apply retroactively the Supreme Court’s holding in

Shearson/American Express, 482 U.S. at 238-42, that

Rule 10b-5 and RICO claims were arbitrable). Because

the arbitrator in C.D. Anderson thus did have authority

to decide those claims, the predicate for application of the

Gardner-Denver rule—viz., that the “arbitrators were

not authorized to resolve such claims,” Pyett, 556 U.S. at

264—was absent in C.D. Anderson.

Our decision in Clark v. Bear Stearns & Co., Inc.,

966 F.2d 1318 (9th Cir. 1992), is also inapposite. Because

the parties’ agreement there did not allow arbitration

of the plaintiff’s “federal securities claims,” the district

court compelled arbitration of the remaining claims and

stayed the securities claims pending the outcome of the

35a

Appendix A

arbitration. Id. at 1320-21. The fact that the parties’

agreement denied the arbitrator the authority to decide

the securities claims arguably did provide a predicate

for applying the Gardner-Denver rule against giving

issue-preclusive effect to the arbitration, but we said

nothing about any such rule (perhaps because it was not

raised by the parties). 2 Instead, we noted that, under C.D.

Anderson, there is no categorical prohibition on giving

preclusive effect to an arbitration award “even if the

underlying claim” to be precluded “involves the federal

securities laws.” Id. at 1321. We nonetheless ultimately

denied preclusive effect to the arbitral decision on other

grounds, holding that the defendants had failed to carry

their burden to establish “the exact issues previously

determined” in the arbitration and that, as a result,

collateral estoppel could not be applied. Id. at 1322-23.

Because Clark denied issue-preclusive effect on other

grounds and never squarely addressed whether the

Gardner-Denver rule should have yielded the same result,

our decision in that case cannot be understood as somehow

recognizing an abrogation of that rule (which, of course,

we would have no authority to do in any event).

In short, neither Clark nor C.D. Anderson considered,

much less rejected, the still-binding, narrow GardnerDenver rule that the majority wrongly fails to apply in

this case.

2. We did recognize, however, that the arbitrator’s lack of

jurisdiction over the securities claims did mean that res judicata—

i.e., claim preclusion—could not apply. Clark, 966 F.2d at 1321.

36a

Appendix A

For the foregoing reasons, I would reverse the

district court’s dismissal of Hansen’s Sarbanes-Oxley

whistleblower retaliation claim on preclusion grounds and

remand for further proceedings concerning that claim. I

would otherwise affirm the district court’s judgment. I

therefore respectfully dissent in part and concur in the

judgment in part.

37a

APPENDIX B —Appendix

MINUTEBORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEVADA, FILED JULY 25, 2022

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

***

Case No. 3:19-CV-00413-LRH-CSD

MINUTE ORDER

7/25/2022

KARL HANSEN,

Plaintiff,

ELON MUSK; TESLA, INC.; TESLA MOTORS, INC.;

U.S. SECURITY ASSOCIATES; DOES 1

THROUGH 50,

Defendants.

PRESENT: THE HONORABLE LARRY R. HICKS,

UNITED STATES DISTRICT JUDGE

DEPUTY CLERK: NONE APPEARING

REPORTER: NONE APPEARING

COUNSEL FOR PLAINTIFF(S):

NONE APPEARING

COUNSEL FOR DEFENDANT(S):

NONE APPEARING

38a

Appendix B

MINUTE ORDER IN CHAMBERS:

On July 15, 2020, the Court granted Defendants’ motion

to compel arbitration and instituted a stay pending

arbitration. Now, the parties have since filed an unopposed

motion to lift the stay and confirm the arbitration award

of the Hon. Carl (Bill) W. Hoffman, Jr. (retired) denying

Plaintiff’s claims in their entirety. Finding no reason

to overturn the arbitrator’s decision, the Court will lift

the stay and adopt the June 8, 2022 Award as a final,

enforceable judgment of the Court.

As to the issue of the remaining SOX claim, Defendants’

shall have twenty-one (21) days after entry of this Order

to file their motion to dismiss. Plaintiffs shall then have

twenty-one (21) days to file his points and authorities

in response to the motion, and Defendants shall have

fourteen days (14) to file a reply.

IT IS THEREFORE ORDERED that the unopposed

motion (ECF No. 61) is GRANTED and the stay in this

matter is LIFTED.

IT IS FUTHER ORDERED that the Court adopts

the award of the Arbitrator (ECF No. 61-1) as a final,

enforceable judgement and dismisses two of Plaintiff’s

claims with prejudice: (1) intentional interference with

contractual relations; and (2) breach of contract.

IT IS SO ORDERED.

DEBRA K. KEMPI, CLERK

By: /s/

Deputy Clerk

39a

Appendix

APPENDIX C — FINAL

ARBITRATION

AWARD,

FILED AUGUST 16, 2022

JAMS ARBITRATION

CASE REFERENCE NO. 1260005897

KARL HANSEN,

Claimant,

and

ELON MUSK, TESLA, INC.; TESLA MOTORS, INC.,

AND U.S. SECURITY ASSOCIATES,

Respondents.

FINAL AWARD

Introduction and Procedural Statement

A. Parties and Counsel. The parties to this

arbitration are identified in the caption and are represented

as follows:

Nicholas Woodfield, Esq.

nwoodfield@emplovmentlawgroup.com

R. Scott Oswald, Esq.

soswald@emplovmentlawgroup.com

The Employment Law Group

888 17th Street, N.W., Suite 900

Washington, D.C. 20006

Counsel for Complainant

40a

Appendix C

Christopher F. Robertson, Esq.

crobertson@seyfarth.com

Anne V. Dunne, Esq. adunne@seyfarth.com

Seyfarth Shaw LLP

World Trade Center East

Two Seaport Lane, Suite 300

Boston, Massachusetts 02210-2028

Attorneys for Elon Musk, Tesla Inc., and Tesla Motors,

Inc.

Janine M. Braxton, Esq

jibraxton@martensonlaw.com

Alex A. Smith, Esq. alexsmith@martensonlaw.com

Martenson, Hasbrouck & Simon LLP

455 Capitol Mall, Suite 601

Sacramento, CA 95814

Attorneys for U.S. Security Associates

Arbitrator:

Carl (Bill) W. Hoffman, Jr.

7160 Raphael Rivera Way, 4th Floor

Las Vegas, NV 89139

Case Manager:

Scott Parreno

7160 Raphael Rivera Way, 4th Floor

Las Vegas, NV 89139

702-835-7803 702-437-5267(fax)

41a

Appendix C

B. Arbitration

In Las Vegas, Nevada, this matter came to arbitration

in accordance with the parties’ arbitration agreement

contained in the Non-Employment, Non-Disclosure,

Invention Assignment, and Arbitration Agreement signed

July 17, 2018, which provides that any dispute arising

out of or relating to the Agreement shall be determined

by arbitration before JAMS using its Employment

Arbitration Rules and Procedures. The undersigned

arbitrator, having examined the submissions, proof and

allegations of the parties, finds, concludes and issues this

Final Award, as follows.

Prior to the evidentiary hearing, the parties submitted

briefs regarding Respondents’ joint motion to dismiss. The

“Interim Award Re: Respondents’ joint motion to dismiss

counts III-IV of the Third Amended Complaint” dated

February 11, 2021 is hereby incorporated by reference,

and determined to be final for purposes of this award. Of

note, Count III alleging a RICO violation was dismissed.

Additionally, prior to the evidentiary hearing, the

parties submitted briefs regarding Respondent’s motion

for summary judgment. The “Tesla’s and USSA’s Motions

for Summary Judgment: Interim Award (corrected)” dated

March 7, 2022, is hereby incorporated by reference, and

determined final for purposes of this award. The Interim

Award was clarified and reconsidered on March 14, 2022.

Of note, the claims against USSA for breach of contract

in Count II and intentional interference with contractual

42a

Appendix C

relations in Count I were dismissed. Also dismissed was

the claim against Tesla for breach of contract in Count II.

Because Hansen’s other claims were dismissed, as

discussed above, the remaining claims for consideration

at the hearing were Count I, Intentional Interference

with Contractual Relations by Tesla, and Count IV,

Retaliation under the Dodd-Frank Wall Street Reform &

Consumer Protection Act by both USSA and Tesla. The

evidentiary hearing was conducted in person and by Zoom

videoconference on April 11, 12, and 13, 2022. Each side

offered documentary evidence at the hearing, and such

evidence was admitted. A court reporter recorded the

arbitration, and the record was provided on April 25, 2022.

Claimant Hansen, Jacob Nocon, Jenna Ferrua, Valerie

Workman, and Matt German were called as witnesses

and cross-examined. At the conclusion of the hearing, the

parties stated that they desired to submit post-hearing

briefs, which were provided on May 20, 2022. The case

was then submitted for decision.

II. Facts and Analysis

On January 8, 2018, Hansen applied for a position

with Tesla as a Protection Associate at the company’s

Gigafactory located in Sparks, Nevada. Tesla offered

Hansen a position as a Protection Associate with a rate of

pay of $16.50 per hour by letter dated February 26, 2018.

On March 5, 2018, Hansen began his employment with

Tesla as a Protection Associate. During his employment,

he assisted with investigations into activities occurring

within the Gigafactory, including thefts and drug related

activities.

43a

Appendix C

On or about June 19, 2018, Plaintiff was informed

along with numerous other employees that his position

with Tesla at the Gigafactory was being eliminated due

to restructuring. While there were discussions about

retaining certain of the Protection Associates, ultimately

all of the Protection Associates at the Gigafactory were

included within the reduction in force and the work was

outsourced to a third-party contractor, U.S. Security

Associates, Inc. (“USSA”).

On June 1, 2018, as part of the reduction in force

and reassignment of personnel to an outside contractor,

“USSA” entered into a Master Services Agreement

(the “MSA”) with Tesla to provide security services at

the Gigafactory. Pursuant to the MSA, USSA hired

individuals to work at the Gigafactory to assist with

security. These individuals were employees of USSA and

were not employees of Tesla. Pursuant to Section 3.3 of

the MSA, Tesla retained the right to determine which of

USSA’s subcontractors worked at its facilities.

On or about June 21, 2018, Hansen completed a USSA

Application for Employment for a “Security Officer”

position. As part of his application, Hansen signed a

statement of applicant agreeing that he “ha[d] read this

Statement and agree to the terms hereof completely.”

Hansen understood that USSA “could terminate [his]

employment at any time for any reason.” As part of his

application to USSA, Hansen acknowledged USSA’s

“policy prohibiting disclosure of confidential and

proprietary information of its clients, including Tesla.”

44a

Appendix C

Hansen’s last day as a Tesla employee was July 16,

2018. On July 17, 2018, Hansen was transitioned from

Tesla to USSA, and expressly acknowledged that he was

no longer employed by Tesla. He continued to perform his

security officer duties at the Gigafactory and was paid at

the rate of no less than $19.80 per hour.

Unk now n t o Respondent s, Ha nsen prov ided

confidential information about Tesla’s operations at the

Gigafactory to the media on August 1, 2018. On August

3, 2018, Hansen provided information by email to Musk

and others in Tesla regarding allegations of cartel

involvement in the supply of batteries, counterfeit badges

at the factory, theft at the factory, and improper awards of

contracts and significant thefts at the Gigafactory. These

were all matters of which Hansen became aware while

performing his duties as a security officer or investigator

at Tesla.

Valerie Workman testified that she was the Chief

Compliance Officer at Tesla’s legal office at the time

Hansen sent his August 3, 2018 email to Musk. Workman

testified that within 24 hours of the email, she began to

investigate Hansen’s allegations. She asked to meet with

Hansen, but aside from an initial intake meeting with a

member of the employee relations team, Hansen refused

to meet with her or anyone else at Tesla.

On August 9, 2018, Hansen filed a Tips, Complaints,

and Referrals (TCR) complaint at the Securities and

Exchange Commission (SEC) containing information

regarding his concerns about thefts and cartel activity at

45a

Appendix C

the Gigafactory. On August 16, Hansen’ s attorney issued

a press release concerning the TCR. It is undisputed that

Tesla and Musk were aware of these activities.

Later, on August 23, 2018, Ken Davis, a Tesla security

supervisor, sent an email to Musk and others, the subject

of which was “Karl Hansen - SEC Whistleblower Immediate Attention?” Davis’s email expressed concern

that Hansen was a security threat due to his current role

in an ongoing SEC investigation. He expressed concern

that Hansen was in a position, as a guard, to provide access

to Tesla information to outsiders including his attorney,

and that he had the monetary incentive to do so in light

of his on-going claims against Tesla.

Workman testified that she was provided with

Davis’s email, and she then changed the course of her

investigation from investigating Hansen’s allegations

about activity at the Gigafactory to an investigation into

Hansen’s activities. In order to conduct her investigation,

she requested and received permission to review Hansen’s

emails, and then learned that Hansen had sent numerous

emails outside of Tesla containing a large volume of Tesla

confidential information. Hansen had emailed numerous

confidential Tesla documents to members of the media, his

girlfriend, and others. Hansen later admitted taking this

material, sending it outside Tesla to a variety of people,

and violating Tesla’s policies.

On August 29, Hansen was interviewed on Fox News

about his TCR. Workman testified that this was “big

news,” at least in the Tesla legal community of which she

46a

Appendix C

was a member. On August 31, 2018, Workman reported

the results of her investigation to Tesla Human Resources

representative Jenna Ferrua, Tesla’s business associate

Jeff Jones, and Deputy Legal Counsel Ussuf Mohammed.

Workman testified that the group collaborated about

what to do in light of the investigation, and decided that

Hansen’s reassignment was appropriate because of the

“exfiltration” of Tesla’s confidential documents in violation

of Tesla’s policies. She indicated that such a collaboration

was typical for such matters. When asked whether the

SEC complaint made any difference on Tesla’s decision

to reassign Hansen from the Gigafactory, she testified

“absolutely not” because clear violations of Tesla’s

confidentiality policies had been found.

Jenna Fer r ua testif ied that she was the HR

representative involved in a collaborative discussion of

Workman’s investigation findings about Hansen. She

typically was part of a collaborative group which would

make such decisions and participated in many such

discussions. She testified that the policy violation of Tesla’s

confidentiality rules was clear, and that reassignment of

contractors was the normal outcome in the past when

such misconduct had been discovered. She testified that

she did not know about Hansen’s SEC complaint when she

participated in the reassignment decision.

Once the decision was made, Ferrua testified that

she called USSA and requested Hansen be reassigned

from the Gigafactory. On September 4, 2018. Tesla’s

outside counsel indicated in a letter to Hansen’s SEC

counsel that Tesla had confirmed discovery of numerous

47a

Appendix C

violations of Tesla policies, including that Hansen had

intentionally deleted nearly his entire “sent” folder from

his email account, and had forwarded numerous Tesla

internal documents to his personal Gmail account. The

letter indicated that Tesla had decided to have USSA

reassign Hansen, but specifically said it took no position

on his continued employment with the USSA.

Hansen’s employment with USSA continued until

January 2019 when he resigned from USSA for a higher

paying position.

Count IV, Retaliation under the Dodd-Frank

Wall Street Reform & Consumer Protection

Act.

Count IV alleges that Hansen engaged in protected

activity under Dodd-Frank when he submitted information

to the Securities and Exchange Commission (SEC)

regarding Tesla’s misconduct, and subsequently was

the victim of retaliation when his position at Tesla was

eliminated and he was reassigned from the Gigafactory.

Hansen specifically alleges that “on or about September

4, 2018, Tesla pressured USSA to breach its agreement

with Hansen by retracting offers, demoting Hansen, and

ultimately terminating Hansen, thus taking his property

in violation of Dodd-Frank.”

Section 922 of Dodd-Frank protects whistleblowers

who provide information to the SEC from retaliation. It

defines a whistleblower as “any individual who provides

... information relating to a violation of the securities laws

48a

Appendix C

to the Commission, in a manner established, by rule or

regulation by the Commission.” 15 U. S. C. §78u-6(a)(6).

A whistleblower so defined is protected from retaliation

in three situations, see §78u-6(h)(l)(A)(i)-(iii), including

providing information to the SEC about securities

law violations, assisting in an SEC action, or making

disclosures required or protected under Sarbanes Oxley

or any other law, rule or regulation subject to the SEC’s

jurisdiction. In order to prove a prima facie claim under

this provision, a plaintiff must establish he engaged in

protected activity, the employer knew about that activity,

and a causal connection between the protected activity and

an adverse employment action. Retaliation must be proved

according to the traditional principle of but-for causation,

not the lessened motivating factor causation test.

On August 9, 2018, Hansen filed a Tips, Complaints,

and Referrals (TCR) complaint at the SEC. The TCR

alleges a variety of facts back to April of 2018, when

Hansen was still employed by Tesla, and alleges that the

conduct appears to be a violation of Sections 17(a)(2) and (3)

of the Securities Act of 1933, among other securities laws.

Hansen’s Dodd-Frank claim against

USSA.

Matt German was the designated corporate witness

for USSA. He testified that he was aware of Hansen’s letter

of August 3, 2018, but USSA took no action regarding the

letter because it addressed Tesla issues, not USSA issues.

German was made aware by Hansen that Tesla desired

to meet with Hansen after the August 3, 2018 email was

sent, and that Hansen did not want to meet with Tesla.

49a

Appendix C

German suggested to Hansen that Hansen meet with

Tesla representatives, but if the meeting went poorly, he

could terminate the meeting.

German testified that on August 30, 2018 he had a

conversation with Tesla’s Jeff Jones who asked that Hansen

be removed from guard assignment at the Gigafactory.

German indicated that in the sixty-second call with Jones,

no reason was provided for the reassignment, but that

it was mentioned that Musk had some sort of negative

experience with Hansen while Hansen was stationed

at one of the entry gates to the factory. No details were

provided.

On about September 4, 2018, German became aware

that Hansen was to be removed from his assignment at

the Gigafactory. No reason was provided. German knew

that under the MSA, Tesla had the contractual right

to refuse the assignment of USSA contractors at the

Gigafactory. Hansen had previously told German that

Tesla representatives wanted to talk with him regarding

his August 3, 2018 email, and German suspected the

reason that Hansen was reassigned was Hansen’s refusal

to meet regarding the email. German testified that he

did not know that Hansen had reported anything to the

media, had improperly taken any documents from Tesla,

or that he subsequently made a TCR report or any other

report to the SEC. German testified that he did not

believe that the reason for Hansen’s removal was for any

improper or illegal reason. On September 5, 2018, USSA

removed Hansen from his Gigafactory assignment, and

subsequently reassigned him to another USSA project.

50a

Appendix C

Based upon this evidence, USSA could not have

retaliated against Hansen for making a complaint to the

SEC because it was not aware that the TCR was filed, or

that any protected activity had occurred. Accordingly,

Hansen has failed to prove that Hansen’s SEC complaints

caused USSA to reassign him from the Gigafactory.

Hansen’s claim against USSA fails.

Hansen’s Dodd-Frank claim against Tesla

Tesla argues that Hansen did not engage in activity

protected by Dodd-Frank because under that law, the

alleged violations must relate to specified categories of

fraud or fraud on the company shareholders, and Hansen’s

claims do not.

Hansen’s primary allegations relate to the alleged

unlawful transport and sale of drugs and theft of copper

wire. Hansen provided no evidence to prove that the

alleged thefts or drug activity had any impact on Tesla’s

financial statements or SEC filings or amounted to

securities violations as defined by Dodd-Frank. Garden

variety theft and drug violations are matters governed

by state and local law, not Dodd-Frank. Hansen provides

no argument to the contrary. Accordingly, I find that

Hansen did not engage in protected activity as defined

by Dodd-Frank.

Tesla also argues that Hansen did not engage in

protected activity because there was no reasonable

basis to believe the conduct constituted a violation of the

specified categories in the statute. To prevail, Hansen must

51a

Appendix C

prove that a “reasonable person” would have believed the

reported conduct violated federal securities laws based on

the knowledge available in the same factual circumstances

to someone with the same training and experience as the

reporting employee. See, Exchange Act Release No. 3464545, at 15-16 (‘“reasonable belief standard requires that

the employee hold a subjectively genuine belief that the

information demonstrates a possible violation, and that

this belief is one that a similarly situated employee might

reasonably possess.”).

Hansen testified he is not aware of what is included in

Tesla’s financial statements or is reported to shareholders.

Moreover, Tesla’s investigation into his allegations found

no evidence to support his claims about Mexican drug

cartels. Nor did they support his extensive theft claims.

Hansen had not conducted an independent investigation

to support his claims, but rather relied upon another

employee’ s claims. Accordingly Hansen’ s complaints

were not related to a securities law violation, as required

by Dodd-Frank, and he did not have an objective basis to

believe such a violation had occurred.

Even if Hansen’s TCR was protected activity, Tesla

argues that Hansen’s whistleblowing was not the “but

for” causation for his reassignment. Rather, it argues

that Hansen was removed from the Gigafactory for

independent reasons, that is, the multiple violations of

Tesla’s policies. Under Dodd-Frank, the plaintiff must

demonstrate that his employment would not have been

terminated but for his protected conduct.

52a

Appendix C

Hansen argues that causation for the reassignment

can be inferred from timing alone when an adverse

employment action follows on the heels of protected

activity. Hansen argues that the filing of the TCR on

August 9, 2018 and his SEC attorney’s press release

concerning the TCR on August 16, 2018 and then his

reassignment within a few days on September 4, 2018

establishes causation, and that the timeline speaks for

itself.

Other than timing, Hansen offers no evidence to

contradict Tesla’s evidence presented by Workman

and Ferrua that the collaborative group decided the

reassignment was appropriate because of Hansen’s

policy violations. Tesla’s evidence is persuasive. Workman

testified credibly that the SEC complaints had no impact

on the reassignment decision because Hansen’s policy

violations were so extensive. Ferrua testified that she

was unaware of the SEC complaint at the time the

decision was made. If Workman believed that the SEC

complaint was relevant, she likely would have brought

it to Ferrua’s attention during their collaboration with

Jones and Muhammed. But Ferrua testified that she was

not aware of the SEC complaint, and so it must not have

been discussed. Additionally, Hansen was a contractor,

and Ferrua testified that reassignment was Tesla’s

typical response to policy violations by contractors.

More importantly, given the extraordinary volume of

confidential and sensitive personal information of Tesla

employees discovered to have been “exfiltrated” by

Hansen, a fact which Hansen does not dispute, it was

reasonable to reassign Hansen regardless of his SEC

53a

Appendix C

complaint. Tesla’s letter to Hansen’s SEC lawyer was

consistent with the evidence developed by Workman,

and also Ferrua’s testimony that the SEC complaint did

not matter. Accordingly, Tesla has provided a legitimate

business reason for its decision, and Hansen’s inference

of temporal proximity is insufficient to demonstrate that

the reassignment was pretextual.

Hansen also argues that Tesla’s inconsistent treatment

of Hansen prior to and after his protected activity raises

an issue of material fact as to whether, but for exercising

his rights, he would have been reassigned. The undisputed

evidence from the Tesla decision makers who collaborated

to decide to make the reassignment, however, is that it

was based upon the discovery of the Hansen’s extensive

removal of Tesla documents. Hansen’s treatment is

easily explained by the discovery of his extensive policy

violations.1

Hansen has not established that his reassignment was

made in violation of Dodd-Frank. Tesla has demonstrated

that the reason for Hansen’s reassignment was because of

his policy violations, its response to the policy violations

was reasonable, and it was not in retaliation for filing a

complaint with the SEC.

1. Respondents’ arguments that the reassignment was not an

adverse action, that a report to the media is not protected activity,

and that Hansen failed to prove damages are not analyzed here

because, in light of the findings here, the issues are moot.

54a

Appendix C

B. Count I, Intentional Inter ference with

Contractual Relations

Count I first alleges that Hansen had a three-year

contract with USSA to provide security services, and that

Musk and Tesla interfered with Hansen’s contract with

USSA by pressuring USSA to terminate its three-year

contract with Hansen because Hansen had complained

about Tesla’s illegal activities to his supervisors and

was a whistleblower to the SEC. Hansen’s claim that a

three-year contract existed with USSA was previously

dismissed.

Hansen further alleges that, because of pressure from

Tesla, USSA breached its contract by eliminating Hansen’s

newly assigned position. Hansen’s complaint alleges that

Tesla interfered with the “at-will” employment agreement

that he had with USSA by preventing his assignment to

the Gigafactory, claiming that “Musk and Tesla did not

have a right to decide the personnel USSA would use to

staff the Gigafactory.”

To prove the intentional interference claim, the

parties agree that Hansen must prove (1) there is a

valid contract between Hansen and USSA; (2) Tesla

knew of that contract; (3) Tesla committed intentional

acts intended or designed to disrupt the contractual

relationship; (4) there was an actual disruption of contract;

and (5) resulting damages. Hilton Hotels Corp. v. Butch

Lewis Productions, Inc., 862 P.2d 1207 (Nev. 1993). The

element of actual breach or disruption “requires that a

plaintiff show either an actual breach of a contract or a

55a

Appendix C

significant disruption of a contract....” Rimini Street, Inc.

v. Oracle Intern. Corp., 2020 U.S. Dist. LEXIS 168222,

2020 WE 5531493, *8 (D. Nev. 2020).

Hansen’s claim fails for several reasons. First, an atwill employee relationship is not a contract with which a

third party can interfere. See Kwiatkowski v. Hartford

Fire Ins. Co., No. 2:08-cv-00730 RCJ-LRL, 2009 W.L

10679304, at *4 (D.Nev., Nov. 18, 2009), citing Alam v.

Reno Hilton Corp., 819 F. Supp. 905, 912 (D.Nev. 1993).

Hansen’s claim fails because it is undisputed that he was

an at-will employee of USSA.

Second, Hansen’s employment with USSA, and his

assignment at the Gigafactory, was based upon the MSA.

Pursuant to Section 3.3 of the MSA, Tesla had the right to

determine which of USSA’s subcontractors worked at its

facilities. Hansen had no contractual right to be assigned

to the Gigafactory, or any other location. Thus, according

to the MSA, Tesla could decide that Hansen not be

assigned to the Gigafactory. See Rimini St., 473 F. Supp.

3d at 1186 (“Rimini cannot plausibly argue that Oracle

must give access to its own support website to anyone who

requests it); Leavitt v Leisure Sports Incorporation, 734

P. 2d 1221, 1226 (1987) (defendants acted appropriately to

protect the interest they had acquired via a valid contract,

and thus were privileged.) Tesla had an absolute legal

right to request Hansen’s reassignment.

Hansen argues that Tesla interfered with the at-will

contract as retaliation for the TCR in violation of DoddFrank. But for the reasons previously discussed, Tesla

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and Musk did not retaliate against Hansen because of his

SEC complaint, and Dodd-Frank’s prohibitions against

retaliation were not violated. Rather, Tesla reassigned

Hansen because of his extensive violations of Tesla

policies against disclosing confidential and personnel

information. Accordingly, Tesla was privileged to exercise

its contractual rights under the MSA to require that

USSA reassign Hansen from the Gigafactory, and did not

commit an independently wrongful act in doing so.

Finally, Hansen suffered no adverse action from

his reassignment from the Gigafactory. Hansen had no

contractual right to be assigned to the Gigafactory. He

continued his employment as a USSA security guard at

a similar amount of pay. The element of actual breach or

disruption requires that a plaintiff show either an actual

breach of contract or a significant disruption of a contract

rather than a simple impairment of contractual duties.”

Hansen’s reassignment did not constitute an actual

disruption of the contractual relationship with USSA

because Hansen continued to be employed by USSA under

the terms of their contract and suffered no pay loss or

other adverse consequences from the reassignment.

Accordingly. Hansen has failed to prove that Tesla

interfered with his USSA contractual relations.

III. Final Award

Claimant has failed to establish the claims contained

in his demand for arbitration. Accordingly, his claims are

denied, and he shall take nothing.

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Appendix C

The Arbitration Agreement does not contain a fee

shifting provision for attorney’s fees. Under JAMS

Arbitration Policies, the only fee that an employee may be

required to pay is JAMS’ initial Case Management Fee.

All other costs must be borne by the company, including

any additional JAMS Case Management Fees and all

professional fees for the arbitrator’s services. Accordingly,

absent additional information, 2 no further allocation of

fees or costs is permitted in this matter.

To the extent any claim is not specifically mentioned

herein, it is denied. This award resolves all issues currently

before the arbitrator.

Dated: 6/8/2022

/s/ Bill Hoffman

Bill Hoffman, Arbitrator

2. See, e.g., Rule 24, JAMS Employment Arbitration Rules

and Procedures.

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D STATUTORY

APPENDIX D —Appendix

RELEVANT

PROVISIONS

9 U.S.C. §§ 9–13

§9. Award of arbitrators; confirmation; jurisdiction;

procedure

If the parties in their agreement have agreed that a

judgment of the court shall be entered upon the award

made pursuant to the arbitration, and shall specify the

court, then at any time within one year after the award

is made any party to the arbitration may apply to the

court so specified for an order confirming the award, and

thereupon the court must grant such an order unless the

award is vacated, modified, or corrected as prescribed

in sections 10 and 11 of this title. If no court is specified

in the agreement of the parties, then such application

may be made to the United States court in and for the

district within which such award was made. Notice of the

application shall be served upon the adverse party, and

thereupon the court shall have jurisdiction of such party

as though he had appeared generally in the proceeding.

If the adverse party is a resident of the district within

which the award was made, such service shall be made

upon the adverse party or his attorney as prescribed by

law for service of notice of motion in an action in the same

court. If the adverse party shall be a nonresident, then the

notice of the application shall be served by the marshal of

any district within which the adverse party may be found

in like manner as other process of the court.

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§10. Same; vacation; grounds; rehearing

(a) In any of the following cases the United States court

in and for the district wherein the award was made may

make an order vacating the award upon the application

of any party to the arbitration—

(1) where the award was procured by corruption, fraud,

or undue means;

(2) where there was evident partiality or corruption in

the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in

refusing to postpone the hearing, upon sufficient cause

shown, or in refusing to hear evidence pertinent and

material to the controversy; or of any other misbehavior

by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or

so imperfectly executed them that a mutual, final, and

definite award upon the subject matter submitted was

not made.

(b) If an award is vacated and the time within which the

agreement required the award to be made has not expired,

the court may, in its discretion, direct a rehearing by the

arbitrators.

wherein an award was made that was issued pursuant

to section 580 of title 5 may make an order vacating the

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Appendix D

award upon the application of a person, other than a party

to the arbitration, who is adversely affected or aggrieved

by the award, if the use of arbitration or the award is

clearly inconsistent with the factors set forth in section

572 of title 5.

§11. Same; modification or correction; grounds; order

In either of the following cases the United States court

in and for the district wherein the award was made may

make an order modifying or correcting the award upon

the application of any party to the arbitration—

(a) Where there was an evident material miscalculation

of figures or an evident material mistake in the description

of any person, thing, or property referred to in the award.

(b) Where the arbitrators have awarded upon a matter

not submitted to them, unless it is a matter not affecting

the merits of the decision upon the matter submitted.

affecting the merits of the controversy.

The order may modify and correct the award, so as to

effect the intent thereof and promote justice between the

parties.

§12. Notice of motions to vacate or modify; service; stay

of proceedings

Notice of a motion to vacate, modify, or correct an award

must be served upon the adverse party or his attorney

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Appendix D

within three months after the award is filed or delivered.

If the adverse party is a resident of the district within

which the award was made, such service shall be made

upon the adverse party or his attorney as prescribed by

law for service of notice of motion in an action in the same

court. If the adverse party shall be a nonresident then the

notice of the application shall be served by the marshal

of any district within which the adverse party may be

found in like manner as other process of the court. For

the purposes of the motion any judge who might make

an order to stay the proceedings in an action brought in

the same court may make an order, to be served with the

notice of motion, staying the proceedings of the adverse

party to enforce the award.

§13. Papers filed with order on motions; judgment;

docketing; force and effect; enforcement

The party moving for an order confirming, modifying, or

correcting an award shall, at the time such order is filed

with the clerk for the entry of judgment thereon, also file

the following papers with the clerk:

(a) The agreement; the selection or appointment, if any,

of an additional arbitrator or umpire; and each written

extension of the time, if any, within which to make the

award.

(b)

The award.

application to confirm, modify, or correct the award, and

a copy of each order of the court upon such an application.

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Appendix D

The judgment shall be docketed as if it was rendered in

an action.

The judgment so entered shall have the same force

and effect, in all respects, as, and be subject to all the

provisions of law relating to, a judgment in an action; and

it may be enforced as if it had been rendered in an action

in the court in which it is entered.

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Appendix D

18 U.S.C. § 1514A

(a)Whistleblower Protection for Employees of Publicly

Traded Companies.—No company with a class of

securities registered under section 12 of the Securities

Exchange Act of 1934 (15 U.S.C. 78l), or that is required to

file reports under section 15(d) of the Securities Exchange

Act of 1934 (15 U.S.C. 78o(d)) including any subsidiary

or affiliate whose financial information is included in

the consolidated financial statements of such company,

or nationally recognized statistical rating organization

(as defined in section 3(a) of the Securities Exchange

Act of 1934 (15 U.S.C. 78c),[1] or any officer, employee,

contractor, subcontractor, or agent of such company or

nationally recognized statistical rating organization, may

discharge, demote, suspend, threaten, harass, or in any

other manner discriminate against an employee in the

terms and conditions of employment because of any lawful

act done by the employee—

(1)to provide information, cause information to be

provided, or otherwise assist in an investigation regarding

any conduct which the employee reasonably believes

constitutes a violation of section 1341, 1343, 1344, or 1348,

any rule or regulation of the Securities and Exchange

Commission, or any provision of Federal law relating

to fraud against shareholders, when the information or

assistance is provided to or the investigation is conducted

by—

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Appendix D

(A)

a Federal regulatory or law enforcement agency;

(B)

any Member of Congress or any committee of Congress; or

(C)

a person with supervisory authority over the employee

(or such other person working for the employer who

has the authority to investigate, discover, or terminate

misconduct); or

(2)

to file, cause to be filed, testify, participate in, or otherwise

assist in a proceeding filed or about to be filed (with

any knowledge of the employer) relating to an alleged

violation of section 1341, 1343, 1344, or 1348, any rule or

regulation of the Securities and Exchange Commission,

or any provision of Federal law relating to fraud against

shareholders.

(b)Enforcement Action.—

(1)In general.—A person who alleges discharge or other

discrimination by any person in violation of subsection (a)

may seek relief under subsection (c), by—

(A)

filing a complaint with the Secretary of Labor; or

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Appendix D

(B)

if the Secretary has not issued a final decision within 180

days of the filing of the complaint and there is no showing

that such delay is due to the bad faith of the claimant,

bringing an action at law or equity for de novo review in

the appropriate district court of the United States, which

shall have jurisdiction over such an action without regard

to the amount in controversy.

(2)Procedure.—

(A)In general.—

An action under paragraph (1)(A) shall be governed under

the rules and procedures set forth in section 42121(b) of

title 49, United States Code.

(B)Exception.—

Notification made under section 42121(b)(1) of title 49,

United States Code, shall be made to the person named

in the complaint and to the employer.

(C)Burdens of proof.—

An action brought under paragraph (1)(B) shall be

governed by the legal burdens of proof set forth in section

42121(b) of title 49, United States Code.

(D)Statute of limitations.—

An action under paragraph (1) shall be commenced not

later than 180 days after the date on which the violation

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Appendix D

occurs, or after the date on which the employee became

aware of the violation.

(E)Jury trial.—

A party to an action brought under paragraph (1)(B) shall

be entitled to trial by jury.

(c)Remedies.—

(1)In general.—

An employee prevailing in any action under subsection

(b)(1) shall be entitled to all relief necessary to make the

employee whole.

(2)Compensatory damages.—Relief for any action under

paragraph (1) shall include—

(A)

reinstatement with the same seniority status that the

employee would have had, but for the discrimination;

(B)

the amount of back pay, with interest; and

(C)

compensation for any special damages sustained as a

result of the discrimination, including litigation costs,

expert witness fees, and reasonable attorney fees.

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Appendix D

(d)Rights Retained by Employee.—

Nothing in this section shall be deemed to diminish the

rights, privileges, or remedies of any employee under any

Federal or State law, or under any collective bargaining

agreement.

(e)Nonenforceability of Certain Provisions Waiving

Rights and Remedies or Requiring Arbitration of

Disputes.—

(1)Waiver of rights and remedies.—

The rights and remedies provided for in this section may

not be waived by any agreement, policy form, or condition

of employment, including by a predispute arbitration

agreement.

(2)Predispute arbitration agreements.—

No predispute arbitration agreement shall be valid or

enforceable, if the agreement requires arbitration of a

dispute arising under this section.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.