(Bloomberg) — California’s civil rights regulator sued Tesla Inc. for racial discrimination and harassment after finding a widespread pattern of mistreatment of Black workers at the electric car-maker’s factory near San Francisco.
During a three-year investigation, the state’s Department of Fair Employment and Housing said it received complaints from hundreds of workers and found evidence that Tesla’s Fremont plant is a “racially segregated workplace.”
“Segregation at the Fremont factory, along with the absence of Black and/or African Americans in leadership roles, has left many complaints of rampant racism unchecked for years,” according to the complaint that became public Thursday after it was filed the day before in Alameda County Superior Court. “As early as 2012, Black and/or African American Tesla workers have complained that Tesla production leads, supervisors, and managers constantly use the n-word and other racial slurs to refer to Black workers.”
Tesla said in a Feb. 8 blog post titled “The DFEH’s Misguided Lawsuit” — before the complaint was filed — that the company “will be asking the court to pause the case and take other steps to ensure that facts and evidence will be heard.”
The agency said it tried to work with Tesla to avoid litigation but the company walked away from mediation.
The DFEH said one Black worker told of hearing racial slurs as often as 50 to 100 times a day. Some who complained about the offensive language said supervisors and managers were active participants in the abuse or witnesses to it. On a daily basis, Black workers saw racist graffiti on restroom walls, lockers, benches, work stations, lunch tables and the break room, according to the complaint.
The agency is the state-level equivalent of the better-known U.S. Equal Employment Opportunity Commission, with a mission to protect Californians from unlawful discrimination in employment, housing and accommodations. The DFEH informed Tesla on Jan. 3 that it had grounds to file a complaint. Tesla disclosed the agency’s investigation in the annual report it filed to the U.S. Securities and Exchange Commission on Feb. 7.
The automaker’s shares fell 3% Thursday to $904.55 in New York. The stock was little changed in aftermarket trading.
Numerous Complaints
Tesla has more than 99,000 employees globally, and the factory in Fremont employs more than 10,000 people. The car company headed by chief executive officer Elon Musk moved its corporate headquarters from Palo Alto, California, to Austin, Texas, last year.
Tesla has faced numerous complaints and lawsuits from former workers at its Fremont plant about racial discrimination and sexual harassment in recent years. Many complaints never make it to court because Tesla’s full-time employees sign agreements requiring workplace disputes to be handled in closed-door arbitration.
“The tone is set at the top,” said Kristin Hull, the founder and chief executive of Nia Impact Capital, a social impact fund in Oakland that has pushed Tesla to disclose how it uses employee arbitration agreements. “We’d like to see Elon Musk take the lead on dismantling racism throughout his factories and his company.”
In October, Owen Diaz, a Black man who previously worked as a contractor for Tesla and complained of pervasive racism at the plant, was awarded $137 million by a federal jury in San Francisco — believed to be the largest such verdict of its kind. The judge in the case signaled at a January hearing that he’ll probably reduce the award but won’t grant Tesla’s request for a new trial.
Tesla Challenges ‘Staggering’ $137 Million Award in Racism Case
The DFEH said Black workers were more quickly written up or fired for minor infractions and denied promotions.
“For many Black and/or African American workers, the stress from the severe and pervasive racial harassment, the risk of a physical altercation and escalation with harassers, the blatant discrimination, the disproportionately severe discipline” and the futility of complaining made the working conditions so intolerable that they resigned, according to the complaint.
The case is Department of Fair Employment and Housing v. Tesla Inc., 22CV006830, California Superior Court, Alameda County.
(Updates with background)
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