California Accuses Tesla of Alleged Discrimination at San Francisco Plant

The lawsuit seems likely to widen a rift between CEO Elon Musk, the world’s wealthiest person, and the state where he launched the company

Andrew Harrer | Bloomberg | Getty Images

California regulators have sued Tesla Inc. alleging the electric car maker has been discriminating against Black employees who have been likened to monkeys and slaves at the San Francisco Bay Area factory where most of its trendy vehicles are made.

The explosive 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 39-page lawsuit, filed late Wednesday in Alameda County Superior Court by California’s Department of Fair Employment and Housing, frames Tesla’s move to Texas as an attempt to evade accountability for turning “a blind eye to years of complaints from Black workers who protest commonplace use of racial slurs on the assembly line.”

In response to the complaints, the lawsuit alleges Musk has told workers to be “thick-skinned” about racial harassment, contributing to the culture that’s slow to clean up racist graffiti and other hateful symbols scrawled around the factory.

Besides the N-word, other racist language used in the factory includes descriptions that likened Black workers to a “porch monkey” and “hood rats” and suggestions that they “go back to Africa,” according to the lawsuit. The complaint also alleges the factory was racially segregated, resulting in the area where Black workers labored to be derided as the “slave ship,” or “the plantation.”

Before news of the lawsuit broke, 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.

The allegations against Tesla resulted from a 32-month investigation into its discriminatory practices, according to the lawsuit. The complaint seeks back pay for Black employees who were unfairly bypassed for promotion and raises reinstatements of workers who lost their jobs for discriminatory reasons, and punitive damages.

Musk, who frequently takes to his Twitter account with 73 million followers to comment about issues affecting Telsa, hadn’t posted anything about the discrimination lawsuit as of late Thursday.

This isn’t the first time that Tesla’s treatment of the roughly 15,000 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 as 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.

David Lowe, one of the lawyers representing the women accusing Tesla of sexual harassment, called the latest lawsuit a glaring example of “an incredibly toxic culture and environment that many of these employees are working in” — one that seems counter to its reputation as a company on the cutting edge of technology.

Tesla is “so advanced on one level,” Lowe said, “and yet when it comes to how its workers are treated and the racial harassment and sexual harassment, it’s almost like a company from a different era. They’re so far behind the curve in how they treat their workers.”

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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