California Sues Tesla Over Racial Discrimination Allegations

The California Department of Fair Employment and Housing (DFEH) field a lawsuit against car maker and clean energy company Tesla on Wednesday over allegations of racial discrimination against black workers at its Fremont plant.

Since the late 2010’s, the number of racial discrimination complaints at the factory have shot up. Some of the cases in recent years have resulted in large payouts for the workers when brought to court, including the company being forced to pay $137 million last year to a former black employee who said that he had faced racial discrimination and racial abuse there in the mid 2010’s. While the award will likely go down later this year, it has been seen as foreshadowing the DFEH lawsuit.

The DFEH, before filing the suit in Alameda County Superior Court on Wednesday, said that they had received hundreds of such complaints, including workers being called racial slurs without corrective measures, pay discrimination, prevention of black workers promoted, and other forms of racial discrimination. One black worker told in a complaint that they were called racial slurs 50 to 100 times a day, with others saying that managers and supervisors even joined in or witnessed it happening to workers and didn’t do anything about it. Racist graffiti was also allegedly seen by workers on a daily basis. Due to the company’s policy of workers being contractually obligated to going to closed-door arbitration instead of court, few cases have come up against Tesla since the factory opened in 2010.

“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 DFEH Director Kevin Kish in a statement on Wednesday. “For many Black and/or African American workers, the stress from the severe and pervasive racial harassment, the risk of a physical altercation and escalation with harassers, the blatant discrimination, the disproportionately severe discipline, and the futility of complaining, made the working conditions so intolerable that they resigned.”

Tesla defends self in statement

In a blog to the press on Wednesday, Tesla highlighted their diverse hiring practices and the fact that Tesla, who also has the only car factory in California, had been investigated by the state dozens of times over the allegations before, with cases dismissed each time. The company also asked the DFEH to pause the case to provide time for all facts and evidence to be heard.

“The California Department of Fair Employment and Housing (DFEH) intends to file a lawsuit against Tesla alleging systematic racial discrimination and harassment. This follows a three-year investigation during which the DFEH—whose mission is supposedly to protect workers—has never once raised any concern about current workplace practices at Tesla,” said Tesla on Wednesday. “Rather, the lawsuit appears focused on alleged misconduct by production associates at the Fremont factory that took place between 2015 and 2019.”

“Over the past five years, the DFEH has been asked on almost 50 occasions by individuals who believe they were discriminated against or harassed to investigate Tesla. On every single occasion, when the DFEH closed an investigation, it did not find misconduct against Tesla. It therefore strains credibility for the agency to now allege, after a three-year investigation, that systematic racial discrimination and harassment somehow existed at Tesla. A narrative spun by the DFEH and a handful of plaintiff firms to generate publicity is not factual proof.”

“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.”

Workplace discrimination experts noted on Thursday that while the lawsuit is likely not to be significantly delayed, workers that had been previously tied to company arbitration can now have their claim be taken up by the state.

“The DFEH lawsuit against Tesla can finally pull up previous claims that were forced into arbitration,” said Ana Kinney, a workplace discrimination and harassment lawyer, to the Globe on Thursday. “That’s why so many complaints have been attached to the suit. They now can bring them to court through the state.”

“This is also not the state getting revenge on Tesla for leaving the state for their new HQ last year. It’s just the DFEH following up on complaints and being objective as possible.”

The case is expected to be heard in Alameda County Superior Court later this year.