Tesla sued in California for alleged racial discrimination and harassment

Tesla is being sued by a California state agency for alleged racial discrimination and harassment at its Fremont factory.

Reported by the Wall Street Journal, California's Department of Fair Employment and Housing filed a lawsuit in state court on Wednesday accusing the company of "creating a hostile work environment" for Black workers.

"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," Kevin Kish, DFEH director, said in a statement to the WSJ.

In the complaint, viewed by the WSJ and set to be published online by the agency on Thursday morning, the DFEH said Black workers reported hearing racial slurs constantly used by managers and supervisors. The agency said Black workers had also reported being allocated more physically demanding jobs, being disciplined unequally, and facing racist graffiti onsite.

The DFEH's complaint also said Black workers were underrepresented in managerial roles, and often passed over for professional opportunities. According to Tesla's inaugural Diversity, Equity and Inclusion Impact Report published in 2020, Black employees make up 10 percent of the company's U.S. workforce. Tesla reported that Black employees had experienced a 60 percent increase in representation in management, with 4 percent in director level and above.

The entrance to Tesla's Fremont factory. Credit: David Paul Morris / Bloomberg via Getty Images

Tesla got ahead of the lawsuit posting a blog post the day before it was filed, calling it "misguided."

"Tesla strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints," the post reads. "Tesla is also the last remaining automobile manufacturer in California. The Fremont factory has a majority-minority workforce and provides the best paying jobs in the automotive industry to over 30,000 Californians. No company has done more for sustainability or the creation of clean energy jobs than Tesla. Yet, at a time when manufacturing jobs are leaving California, the DFEH has decided to sue Tesla instead of constructively working with us. This is both unfair and counterproductive, especially because the allegations focus on events from years ago."

"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."

Tesla said that once the lawsuit has been filed it will be asking the court to pause the case, claiming the DFEH had "declined to provide Tesla with the specific allegations or the factual bases for its lawsuit."

Mashable has reached out the the Department of Fair Employment and Housing and Tesla for further comment.

A look inside the Tesla factory in Fremont in 2018. Credit: The Washington Post via Getty Images

The lawsuit marks yet another for Tesla, which was ordered to pay $136.9 million in a racial discrimination case in October 2021. It was brought by former Tesla contractor Owen Diaz, who worked at the Fremont factory as an elevator operator. A San Francisco court ruled that Tesla had ignored Diaz's experiences of anti-Black racial discrimination during his tenure.

In August 2021, Tesla reportedly paid over $1 million to former employee Melvin Berry who said the company didn't act when a supervisor used a racial slur at Tesla’s plant in Alameda — the supervisor allegedly retaliated with longer, more physically demanding hours when Berry confronted them. Tesla denied the allegations.

In 2017, the automaker faced a class-action complaint claiming Tesla as a "hotbed for racist behavior," with former Tesla employee Marcus Vaughn filing a lawsuit in California's Alameda County Superior Court on behalf of Black workers at Tesla's Fremont factory.

Tesla has also been sued in the past for gender discrimination and anti-LGBTQ harassment.

The lawsuit is also the latest high-profile complaint brought by the DFEH against a major tech company — the agency led the two-year investigation into Activision Blizzard's toxic, hostile working environment for female employees.