Tesla faces federal lawsuit alleging racial harassment

Key Points

• 📜 Tesla is facing a federal lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC) alleging severe racial harassment of Black employees at its Fremont, California factory.
• 🏭 The lawsuit claims that since 2015, Black workers at Tesla have experienced racist slurs, graffiti with swastikas and nooses, and a toxic work environment.
• 🚫 Tesla is accused of not investigating claims of racist conduct and firing some employees who reported harassment, despite claiming to take such complaints seriously.
• 📝 This lawsuit follows previous allegations of racial discrimination at Tesla’s Fremont factory and marks the first federal charges brought against Tesla for racial discrimination.
• 💰 The lawsuit seeks compensation, punitive damages, and improved discrimination and retaliation policies for Black workers at the Fremont location.
• 🤝 The involvement of a federal agency like the EEOC adds credibility to the discrimination claims and may concern institutional investors.
• ⚖️ Tesla is also facing a racial discrimination case from the California Civil Rights Department (DCR) and other lawsuits from former employees alleging racial discrimination.
• 🌐 These legal challenges highlight ongoing concerns about workplace discrimination and harassment within Tesla.

Tesla faces a new lawsuit alleging severe harassment of Black employees at its Fremont, California factory, as filed by a federal civil rights agency this week.

On Thursday, the U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Tesla in federal court, claiming that, since 2015, the company’s Black workers have been subject to racist slurs and graffiti, including images of swastikas and nooses, according to a report from Reuters.

The suit is just the latest in allegations of racial discrimination at the automaker’s Fremont, California factory, and it comes just over a week after another lawsuit claiming toxic work environments at Tesla’s factories was dismissed.

According to this week’s lawsuit, Tesla hasn’t investigated the claims of racist conduct since the EEOC first raised them, and it also claims that the automaker has fired some employees who reported cases of harassment. Tesla has said in the past that it doesn’t tolerate any racial discrimination, adding that it takes complaints from its workers very seriously.

The lawsuit comes after it was found that the EEOC was investigating Tesla last year, with the agency saying that it discovered “reasonable cause” to believe the automaker went against federal discrimination laws. The EEOC then tried to enter into a settlement with Tesla, though discussions to settle reportedly failed. Investigations began when EEOC chair Charlotte Burrows filed an internal complaint with the commission, considered a charge against Tesla.

“Every employee deserves to have their civil rights respected, and no worker should endure the kind of shameful racial bigotry our investigation revealed,” Burrows said.

Reuters notes that the EEOC typically settles lawsuits directly with employers, adding that it’s somewhat uncommon for the agency’s cases to make it to trial.

The suit also represents the first set of federal charges brought against Tesla for allegations of racial discrimination, with similar lawsuits previously arising from the state of California and past employees. Stephen Diamond, a Santa Clara University law professor who has previously advised Tesla investors on social responsibility, notes that the escalation to the federal level could make it harder for the automaker to defend itself against allegations of discrimination.

“If the federal government gets involved, it certainly adds credibility to the claims,” Diamond said. “Major institutional investors like pension funds will be very concerned about this type of behavior.”

The lawsuit is seeking to make Tesla pay compensation and punitive damages to an unspecified number of its Black workers at the Fremont location, and it would also force the automaker to improve policies related to discrimination and retaliation.

Tesla also faces a racial discrimination case from the California Civil Rights Department (DCR), which is considered a counterpart of the EEOC’s on the state level. That particular suit alleges that Tesla discriminated against Black workers in decisions about wages, promotions and general work assignments. Tesla requested that the DCR dismiss the case last year, saying it was politically motivated, though a judge denied the request.

In addition, a former Black contract elevator operator at the Fremont factory, Owen Diaz, is now seeking his third trial with Tesla from a 2017 lawsuit alleging racial discrimination. In the suit, Diaz said he was told to “go back to Africa” and was called the N-word without any action taken by the automaker despite his repeated complaints. A jury awarded Diaz $3.2 million in April after he rejected a separate payout in 2021 that the judge had reduced from $137 million to $15 million.

Tesla is also facing a class-action lawsuit from around 240 employees in California, claiming that the company mistreated Black workers at the Fremont factory.