California Sues Tesla For Alleged Racial Discrimination; Company Says State Wants to 'Generate Publicity'

Tesla Inc. TSLA is being sued by a California state agency that alleged the electric vehicle company enabled an environment of racial hostility at its Fremont facility.

What Happened: The Wall Street Journal reported the California Department of Fair Employment and Housing filed the complaint Wednesday in state court; the details of the report are scheduled to be made public on Thursday.

“After receiving hundreds of complaints from workers, DFEH found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion creating a hostile work environment,” said Kevin Kish, the agency’s director, in a press statement.

Among the complaints culled by the DFEH was a charge brought by a Black worker who heard between 50 and 100 racial slurs a day, along with reports that Black employees were routinely assigned to more physically demanding positions, subjected to more severe disciplinary actions, confronted with racist graffiti on the factory site and often passed for career advancement within the company.

The DFEH lawsuit covers the period between 2015 and 2019.

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What Else Happened: Tesla stated in its 2020 diversity report that Black employees accounted for 10% of its U.S. workforce and 4% of its leadership positions.

In a corporate blog post titled “The DFEH’s Misguided Lawsuit,” Tesla stated that “despite repeated requests, the DFEH has declined to provide Tesla with the specific allegations or the factual bases for its lawsuit.”

The company also noted the Fremont facility “has a majority-minority workforce” and claimed the DFEH had investigated nearly 50 complaints of harassment and discrimination over the past five years but closed each investigation without concluding misconduct by the company.

“A narrative spun by the DFEH and a handful of plaintiff firms to generate publicity is not factual proof,” the blog post said. “Once the DFEH files its lawsuit, Tesla will be asking the court to pause the case and take other steps to ensure that facts and evidence will be heard. To date, despite repeated requests, the DFEH has declined to provide Tesla with the specific allegations or the factual bases for its lawsuit.

“Attacking a company like Tesla that has done so much good for California should not be the overriding aim of a state agency with prosecutorial authority. The interests of workers and fundamental fairness must come first.”

Photo: Blomst / Pixabay