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7 January 17, 2017 ‘The Honorable Tony Thurmond The Honorable Bill Quirk Assemblymember, 15" District Assemblymember, 20th District State Capitol State Capitol P.O. Box 942849 P.O. Box 942849 Sacramento, CA 94249-0115 ‘Sacramento, CA 94249-0115 ‘The Honorable Kansen Chu ‘The Honorable Rob Bonta ‘Assemblymember, 25th District Assemblymember, 18th District, State Capito! State Capitol P.O. Box 942849 P.O. Box 942849, Sacramento, CA 94249-0115 ‘Sacramento, CA 94249-0115 ‘The Honorable Ash Karla Assemblymember, 27 District State Capitol P.O. Box 942849 Sacramento, CA 94249-0115 Dear Assemblymembers: Thank you for your letter dated January 10, 2017 seeking clarification about a confidentiality acknowledgement ("Acknowledgement’) that Tesia recently presented to its employees. To be clear, the document that we presented to our employees is an acknowledgement and reaffirmation of existing obligations that our employees have towards Tesla. ‘We asked our employees to sign the Acknowledgment because Tesla recently suffered a rash of unauthorized leaks to the press and social media about product launches, specifications, and improvemients—information that is critical to Tesia's continued growth and success. The improper release of this information significantly damaged Tesia, and we therefore sought to remind our colleagues of their existing confidentiality obligations to the company. Rather than overwhelm them with a complicated legal document that is incomprehensible to lay people, we set out to use piain language, ‘writing in a brief, piain-spoken manner that is respectful ofthe legal rights of our employees and fully compliant with State and Federal laws. We were especially mindful of our employees’ rights to engage in protected concerted activity and to raise concems to government agencies. So, we included key language to ensure that there was no confusion as to where Tesla stood on this issue. ‘The Acknowledgment states, “Unless otherwise allowed by law, you must not, for example, discuss confidential information with anyone outside of Tesla, take or post photos or make video or audio recordings inside Tesla facilties, forward work emails outside of Tesia or to a personal email account, or write about your work in any social media, blog, or book." (Emphasis added). The rights of employees under the National Labor Relations Act and the Caiffornia Labor Code Cleary fit the ‘otherwise allowed by law’ category ‘The Acknowledgment also includes the following language: “Of course, these obligations are not intended to limit proper communications with government agencies.” While we encourage our employees to raise their concems intemally so that we can correct any missteps, we fully support their rights to engage in lawful, protected activity, including reporting to the government any concems that they have. Note that the Acknowledgment is clearly not intended to prohibit employees from discussing concems about wages or working conditions whether amongst themselves or with third parties. Indeed, the focus TESLA Tesla Motors, Inc of the Acknowledgement is on commercial, proprietary and trade secret information that might be impermissibly leaked to third-party commercial actors, who do not have a legal right to this information, Many Tesla employees are exposed to and trusted with highly sensitive information about future products, improvements, and Tesla’s business affairs. As a publicly traded company, much of that information is considered material, non-public information. Therefore, itis critical that we prevent unauthorized leaks. ‘At Tesla, we strive for transparency and open communication with all of our employees. We believe that it allows our employees to fully participate in Tesia's mission to transition the world to sustainable energy. This culture of trust is critical to enable all of our employees to take a proactive role within the company and grow their careers to their full potential. To balance this openness, we reminded our team that much of what we share is highly competitive and technical information not appropriate for sharing with third parties, unless such sharing is in fact permitted by law, Very truly yours, 4 soseegee a aa Todd Maron General Counsel