Elon Musk’s Relationship With Employee May Have Violated Tesla’s Ethics Code, Experts Say

Musk has tacitly acknowledged having a romantic relationship with a subordinate employee, conduct that led to forced departures for at least three other high-profile chief executives in recent years, according to experts.

According to court records obtained by Business Insider, Musk welcomed twins with his business partner. The director of operations at Neuralink is Zilis. Prior to Neuralink, Zilis was a project director atTesla. Musk said Thursday that he was doing his best to help the population crisis.

Zilis was an employee at the electric car company. According to Jeffrey Sonnenfield, senior dean of leadership studies at Yale University, it would be a gross violation of the code of business ethics for Musk to have a romantic relationship with a former employee.

The code doesn't explicitly prohibit relationships with executives or subordinates, but it does call for employees to avoid conflicts of interest, such as supervising a spouse or romantic partner. Employees are told to tell an HR representative if there is a conflict. Musk and Zilis didn't reply to emails asking if they'd notified the HR departments of their relationship. The two companies did not respond to questions.

According to Julie Moore, an employment lawyer at Employment Practices Group, the relationship may still be in violation of the company's code of conduct since Musk's actions reflect on his company. Neuralink doesn't seem to have any policy against Musk having a relationship with an employee, but the affair represents poor judgement in management conduct.

At a time when Musk is being scrutinized for his behavior, the revelation of his relationship with Zilis comes. According to Business Insider, Musk paid $250,000 to settle allegations of sexual harassment made against him by a flight attendant. The report was a political hit piece. The CEO's behavior on social media was condemned by the employees in an open letter.

Employment practices experts say that companies should have policies on consensual relationships because they can affect the culture of the company. According to a survey conducted by executive coaching firm Challenger, Gray & Christmas, almost all of the companies have policies against consensual relationships between managers and employees.

A number of high-profile incidents of sexual harassment came to light after allegations were made against Weinstein. Some high-profile CEOs of major public companies have paid a heavy price for engaging in relationships with subordinates and violating company policies.

Steve Easterbrook, the former CEO of Mcdonald's, was fired in November of last year after he had sexual relationships with at least three subordinates. An internal investigation found that Brian Krzanich had aconsensual relationship with an employee. Jeffrey Zucker resigned as CNN CEO because he failed to reveal his relationship with a colleague. Vince McMahon stepped down as chairman and CEO of World Wrestling Entertainment in June due to an investigation into an alleged affair.

It is difficult to tell what action the board of directors will take given that the policy doesn't explicitly ban consensual relationships. Moore thinks that the board members arehuddling with their inside counsel, outside employment attorneys, and their PR people to make sure they don't rush to judgement.

She says that the lack of action by the boards of Neuralink orTesla might send a message to other CEOs that accountability for such relationships is waning. At the time, the executive was the mother. The rules may apply to him. Is he allowed to act with impunity because of who he is?

According to Charles Elson, a corporate governance expert at the University of Delaware, board action against Musk is not likely given his recent history. Elson told Forbes that he would be surprised if the board didn't react to the SEC violation. The old joke says that the king can do nothing wrong.

Alan Ohnsman reports additional reporting.

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