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State sues Tesla alleging widespread racial discrimination against Black workers at Fremont plant

Car company denies allegations; state agency accuses Tesla of turning 'blind eye to years of complaints'
(Stock image)

California's Department of Fair Employment and Housing (DFEH) brought suit last week against Tesla Inc., accusing the company of a far-reaching and pervasive pattern of racially discriminatory conduct against Black and African American workers at its Fremont plant.

The civil rights suit is the culmination of a three-year investigation into conditions at the plant. DFEH allegedly considered hundreds of complaints from workers and "found evidence that defendants subjected its Black and/or African American workers to racial harassment and discriminated against them in the terms and conditions of employment, including assignment, discipline, promotion, termination, and constructive discharge."

Tesla struck back even before the suit was filed, releasing a public statement that carried the provocative caption "The DFEH's Misguided Lawsuit." The statement challenged DFEH's credibility and claimed that the conduct investigated occurred in the period from 2015 and 2019 and ignored the company's recent efforts in diversity, equity and inclusion.

The release points out that Tesla is the only California car manufacturer and "provides the best paying jobs in the automotive industry to over 30,000 Californians."

The release goes on to say that Tesla is a world leader in innovation, sustainability and clean energy, and concludes that "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."

DFEH counted with its own public statement on Thursday, stating that Tesla "has turned a blind eye to years of complaints from Black workers protesting the near-constant use of racial slurs and derogatory language in the workplace, and the presence of racist writing and graffiti in common areas of the workplace, including swastikas and other hate symbols."

The Fremont plant was previously a General Motors facility. Tesla purchased it in 2010 and retooled it to produce electric vehicles. According to the DFEH complaint, the facility has 5.3 million square feet of space on 370 acres and employs more than 15,000 workers.

According to the state agency's allegations, Black and African American workers at the plant were subjected to daily racial slurs and graffiti -- including the "N-word," KKK signs, the Confederate flag and swastikas -- amidst ongoing discriminatory conduct.

DFEH alleges that the plant was physically segregated, with Black workers assigned to work in separate areas and given work that was more physically challenging and dangerous than that assigned to white workers.

Complaints by Black workers were, according to DFEH, "ignored, immediately dismissed, or perfunctorily investigated and then dismissed."

The complaint reports that a common complaint of the workers DFEH interviewed was that Black and African American workers were "taunted by racial slurs and then baited into verbal and physical confrontations, where they, in turn, were the ones disciplined for being purportedly 'aggressive' or 'threatening.'"

DFEH alleges that the company's human resources function was chronically understaffed and unable or unwilling to deal with the issues.

The suit says that in recent years, Tesla has turned to outsourcing the hiring of workers to private staffing agencies. DFEH states that Tesla took this route because in the event of a complaint about a worker, the staffing agency would have to do the investigation.

The DFEH brought the suit on behalf of the people of California and also on behalf of a "group" -- like the "class" in a class action -- of workers at the Fremont plant.

The complaint lists separate claims for race discrimination by harassment, by job assignment, and in compensation, discipline, promotion, termination, discharge, retaliation, and pay.

In many of the claims, DFEH alleges that the company's actions "were willful, malicious, fraudulent, and oppressive, and were committed with the wrongful intent to injure Black and/or African American workers in conscious disregard of their rights."

DFEH seeks money damages as well as injunctive relief.

Tesla has not filed a formal response to the suit, although in its press release it says that it "will be asking the court to pause the case and take other steps to ensure that facts and evidence will be heard."

In its press release, Tesla alleged that "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 dismisses the suit as "a narrative spun by the DFEH and a handful of plaintiff firms to generate publicity."

In October 2021, Tesla was slapped with a $137 million jury award in a race discrimination case brought by a Black former employee who alleged racial abuse while working as an elevator operator at the company.

Tesla's contentious interactions with the state of California and Gov. Gavin Newsom, as well as fights with Alameda County over COVID-19 restrictions on plant operations, led to Tesla's announcement in October 2021 that it would move company headquarters from California to Austin, Texas.

The complaint suggests that the announcement was "another move to avoid accountability."

DFEH comments that "Tesla's brand, purportedly highlighting a socially conscious future, masks the reality of a company that profits from an army of production workers, many of whom are people of color, working under egregious conditions."

Tesla is one of the world's most valuable companies, with a market capitalization approaching $1 trillion.

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