(Bloomberg) —
For years, my colleagues at Bloomberg News and I have chronicled serious allegations of racial discrimination against Black workers at Tesla’s auto plant in Fremont, California.
Two cases warranted widespread attention just last year. In August, we learned that Tesla had paid Melvin Berry, a former materials handler, $1 million in a rare discrimination award by an arbitrator. In October, a federal jury in San Francisco awarded former contract worker Owen Diaz a staggering $137 million. Tesla appealed the latter ruling, and a federal judge has signaled he’s likely going to cut the size of the award.
California’s civil rights regulator, the Department of Fair Employment and Housing, fields complaints from workers throughout the state, including hundreds about Tesla, we learned last week.
The way news of the regulator’s lawsuit unfolded was a prime example of Tesla’s aggressive and dismissive attitude toward government agencies, as well as the company’s penchant for preemptively trying to control news cycles and narratives. Here’s a quick recap of how it all went down:
- On Feb. 7, Tesla filed its annual report to the U.S. Securities and Exchange Commission. There was a two-sentence disclosure on page 91 that DFEH had issued a “notice of cause finding” on Jan. 3 and notified the company that it had grounds to file a civil complaint. This was a clear signal Tesla was probably going to be sued.
- Early on Feb. 9, Tesla published a blog post titled “The DFEH’s Misguided Lawsuit.” Never mind that the lawsuit hadn’t actually been filed; Tesla was front-running the agency. The company claimed the suit appeared to focus on misconduct that took place from 2015 to 2019; that in almost 50 instances, cases had been closed without finding of misconduct; and that DFEH had “never once raised any concern about current workplace practices at Tesla.” DFEH would later counter each one of these points.
- On Feb. 10, the lawsuit was made available on the Alameda County Superior Court website.
According to the suit, Black workers have complained about use of the n-word and other racial slurs as early as 2012. “They have complained that swastikas, ‘KKK,’ the n-word, and other racist writing are etched onto walls of restrooms, restroom stalls, lunch tables, and even factory machinery,” the DFEH says in its complaint. “Leads, supervisors and managers were active participants and/or witnesses to these racist comments.”
DFEH alleges that Tesla failed to maintain and provide employment records, paid Black workers less, and in some cases preemptively notified alleged harassers of complaints before launching investigations.
On page 10 of the lawsuit, DFEH took issue with Tesla’s blog post, suggesting in a footnote that the reference to almost 50 instances of complaints being closed without misconduct findings was misleading.
“It is unclear which administrative complaints Tesla refers to, but many resulted in an immediate request for a right to sue,” the agency said.
On page 12, DFEH said in another footnote that, contrary to the blog post, both the agency and Tesla’s workers have raised concerns about workplace practices for years. “They still do, as complaints were filed as recently as 2022,” the agency said.
Last week’s events were reminiscent of how Tesla dealt with lockdowns in early 2020. Chief Executive Officer Elon Musk seized on an announcement by Governor Gavin Newsom that manufacturers in parts of California could reopen, sending a memo to workers that neglected to mention San Francisco Bay area counties were leaving restrictions in place. When Alameda County resisted Musk’s plan to resume operations, Tesla sued, then restarted production before getting permission.
In 2018, after Tesla cast blame on the driver of a Model X operating on Autopilot for a fatal crash, the National Transportation Safety Board warned the company not to make statements about the incident while an investigation was underway. When the NTSB’s chairman called to inform Musk that the agency was kicking the company’s representatives off the probe, the CEO hung up on him. After Tesla released a statement saying it had withdrawn from the investigation, the NTSB issued one of its own to say it had actually removed the manufacturer.
Tesla does not respond to media inquiries in the U.S., but did say in its blog post last week that it would ask the court to pause the case brought by DFEH.
On Wednesday, my colleague Saijel Kishan reported that a major pension fund is ratcheting up pressure on Tesla. The New York State Common Retirement Fund filed a shareholder resolution this month calling for the carmaker to disclose, among other things, how much it has paid in settlements related to harassment and discrimination.
“Recent developments further highlight the need for Tesla to address how the company is preventing harassment and discrimination against employees,” New York State Comptroller Thomas DiNapoli said Monday in an emailed statement. “This kind of alleged behavior should never be tolerated.”
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