Why a California agency is suing Tesla

More disturbing allegations against Tesla.
More disturbing allegations against Tesla.
Image: Reuters/Stephen Lam
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Black workers at Tesla’s Fremont, California factory are subjected to racial slurs and discriminated against in job assignments, pay, and promotion, a complaint filed by a California regulatory agency on Wednesday (Feb. 9) alleges.

California’s Department of Fair Employment and Housing (DFEH) say they’re suing Tesla after receiving hundreds of complaints (pdf) from workers at the electric vehicle manufacturer’s factory in the San Francisco Bay Area. It’s the latest in a series of allegations made against the world’s most valuable car maker, which has been accused of tolerating racial discrimination and sexual harassment in its workplaces.

The state of California is in a unique position to handle a lawsuit against Tesla, as arbitration agreements prevent many employees from taking the company to court themselves.

What the complaint against Tesla alleges

The California agency alleges Tesla has failed to properly address numerous complaints of racism in its factories dating back at least a decade. According to the complaint, Black Tesla workers at the Fremont factory have alleged that:

  • Leads, supervisors, and managers at Tesla use the n-word and other racial slurs to refer to Black workers. One worker said he heard racial slurs 50 to 100 times a day.
  • Graffiti containing swastikas, “KKK,” the n-word, and other racist writing have been found in restrooms, on lunch tables, and on factory machinery.
  • Black workers are given more physically demanding assignments, paid less, promoted less frequently, and fired more often than other workers.

In its investigation, the DFEH also says it found Tesla retaliated against Black workers for reporting harassment or discrimination, and failed to take proper steps to prevent discrimination and harassment in its factory. The agency alleges that Tesla’s unfair treatment of its Black workers is evident in the lack of representation at higher levels of the company. While 20% of Fremont factory workers with Tesla are Black, none of them occupy executive posts, and just 3% are represented at the professional level, according to federal data cited by the DFEH.

Tesla issued a statement about the DFEH’s impending lawsuit on Feb. 9, saying the agency’s complaint was intended to “generate publicity”. The company said it has an employee relations team that investigates all complaints of discrimination and harassment, and has always disciplined employees who engage in misconduct. The EV maker says it plans to ask the court to pause the case and “take other steps to ensure that facts and evidence will be heard”.

Tesla faces numerous allegations of harassment, discrimination

Tesla is no stranger to legal scrutiny regarding its workplace practices. In 2021 alone, the company was ordered by a federal jury to pay $137 million to a former Black Fremont employee who alleged his accusations of racial harassment were ignored by management, and was sued by a Black former employee who said she was physically assaulted by a co-worker at Tesla’s Lathrop, California plant. The car maker is also the subject of numerous lawsuits alleging sexual harassment in the Fremont factory.

It’s still rare that Tesla employees have their complaints addressed, though, because most have to sign arbitration agreements that keep their complaints out of court. When cases are decided by an arbitration judge, Tesla usually wins. The employee who was awarded $137 in damages, Owen Diaz, avoided an arbitration agreement because he was employed by a staffing agency to work for Tesla.

The widespread use of mandatory arbitration by Tesla and other companies means “government has the only effective enforcement mechanism to remedy broad pervasive violations in a workplace,” DFEH’s Kevin Kish told the Los Angeles Times. The California agency is seeking unspecified monetary damages in this case, and is also asking Tesla to reinstate workers who were unfairly terminated.