Tesla Prepares For California To Sue Over Alleged Racial Discrimination And Harassment

Topline

Tesla says it expects the California Department of Fair Employment and Housing to file a lawsuit against the electric carmaker “alleging systematic racial discrimination and harassment” that occurred between 2015 and 2019, Tesla reported in a statement Wednesday.

Key Facts

On almost 50 occasions, individuals who believe they were mistreated had asked the department to investigate Tesla, the statement said, claiming the state closed its three-year investigation without finding any wrongdoing. 

Tesla said the state declined several requests to provide specific allegations or factual bases for the expected lawsuit. 

The California department did not immediately respond to a Forbes request for comment.

Tesla disclosed the expected lawsuit earlier this week, saying in a regulatory filing Monday it had received a notice from the department last month following an investigation into allegations of racial discrimination and harassment. 

What To Watch For

The company said it will ask the court to pause the case and take steps to make sure facts are heard after the department files its lawsuit.

Surprising Fact

The company’s full-time employees must sign a contract that requires workplace disputes be managed in closed-door arbitration, according to Bloomberg.

Key Background

Tesla has faced many lawsuits stemming from accusations management ignores discrimination based on gender, sexual orientation and race. Earlier this month, a Black gay woman, who used to work as a contract worker at a factory in California, sued Tesla, alleging the company didn’t act on racial and homophobic slurs against her and physical attacks by a colleague. Last year, two female employees filed separate lawsuits accusing “hostile work environment” for female workers at Tesla’s Fremont factory. In October, Tesla was ordered to pay a Black contract worker $136.9 million over racial discrimination at the Fremont factory. Tesla is appealing that verdict, and said in Monday’s filing it had requested a new trial in November as it “does not believe that the facts and law justify the verdict.” 

Further Reading

Tesla says California plans to sue over alleged discrimination, harassment (Reuters)

Tesla faces renewed scrutiny over racial bias and Elon Musk’s tweets. (New York Times)

Tesla Sued by Black, Gay Worker Claiming ‘Unchecked’ Racism (Bloomberg)