California regulators have sued Tesla alleging the electric car maker has been discriminating against Black employees at the San Francisco Bay Area factory where most of its vehicles are made.
The lawsuit seems likely to widen a rift between Tesla CEO Elon Musk, the world’s wealthiest person, and the state where he launched the company. Tesla is now worth more than $900 billion, less than 20 years after Musk set out to transform the auto industry.
Musk moved Tesla’s headquarters from Palo Alto, California, to Austin, Texas, last year after publicly feuding with California officials over whether Tesla’s factory should remain shut down during the spring of 2020 while the coronavirus pandemic was still in its early stages.
The discrimination lawsuit, filed late Wednesday in Alameda County Superior Court by California’s Department of Fair Employment and Housing, was sparked by hundreds of worker complaints, said Kevin Kish, the agency’s head.
The department, which enforces state civil rights laws, “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,” Kish said in a statement reported by the Wall Street Journal and Bloomberg.
The Department of Fair Employment and Housing didn’t immediately respond multiple inquiries seeking further details about the lawsuit.
Even before the agency filed the lawsuit, Tesla preemptively posted a statement on its website lashing out at what it called an “unfair and counterproductive” lawsuit.
The company asserted that the agency has been asked on nearly 50 occasions during the past five years to look into allegations of discrimination and harassment, and closed each investigation without finding any evidence of misconduct.
“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,” the company wrote, while trying to frame the lawsuit as a publicity stunt.
But this isn’t the first time that Tesla’s treatment of the roughly 10,000 employees at its Fremont, California, factory has come under scrutiny. The factory, located about 40 miles (65 kilometers) southeast of San Francisco, remains Tesla’s biggest manufacturer of electric cars, even has the company has opened additional plants, including a new one in Texas.
Last October, a federal jury awarded $137 million in damages to a former Black elevator operator who had alleged he faced daily racist slurs and other forms of harassment while working at the Fremont plant in 2015 and 2016 before quitting. Tesla is appealing that verdict and has denied any knowledge of racist conduct that the former elevator operator, Owen Diaz, said took place at the plant.
And then more than a half dozen current and former Tesla employees filed another lawsuit alleging the company didn’t take adequate steps to protect them against sexual harassment. Tesla is seeking to shift those complaints into arbitration.
About 10% of Tesla’s U.S. Employees are Black and 21% are women, according to the company’s latest employment breakdown.
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