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California sues Tesla, alleging racial discrimination and harassment

The company disclosed the California Department of Fair Employment and Housing probe earlier this week in an annual filing

Tesla says California’s workplace regulator has signaled its intent to sue the automaker, alleging pervasive racial discrimination and harassment. (David Paul Morris/Bloomberg News)

SAN FRANCISCO — California’s workplace regulator has sued Tesla, alleging pervasive racial discrimination and harassment at the electric automaker’s Fremont, Calif., manufacturing plant.

The California Department of Fair Employment and Housing (DFEH), which filed the complaint Wednesday in a California state court, said it had received hundreds of complaints from workers. “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 hostile work environment. The facts on this case speak for themselves,” agency director Kevin Kish said in a statement.

The complaint alleges that Tesla managers and supervisors regularly made racist remarks about Black workers. “A common narrative was Black and/or African American workers being 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,’” the department said in an excerpt of the lawsuit provided to The Washington Post.

The lawsuit also said that Tesla’s Black workers were “subjected to discriminatory terms and conditions of employment.”

Earlier in the day, Tesla had said that the regulator appeared to be probing incidents alleged to have occurred from 2015 to 2019. The company said that it “strongly opposes all forms of discrimination and harassment” and that it “continues to seek to provide a workplace that is safe, respectful, fair, and inclusive.”

The move comes as the company has been contending with multiple lawsuits alleging toxic working conditions. In October, a jury ordered Tesla to pay a former worker, who is Black, nearly $137 million — $6.9 million in damages for emotional distress and $130 million in punitive damages — after finding the company liable for racist abuse at its plant.

Owen Diaz, an elevator operator who worked for Tesla between June 2015 and May 2016, said he was subject to “daily racist epithets” while on the job, including the n-word. The lawsuit alleged that workers encountered a scene “straight from the Jim Crow era,” where workers were subjected to frequent racist harassment and supervisors took no action.

Tesla denied the accusations and also argued that the worker was not a Tesla employee, and therefore lacked the standing to sue the company.

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In December 2021, six women accused the company of fostering a culture of sexual harassment at the Fremont plant and other facilities. In separate lawsuits, they alleged that female employees were subjected to lewd comments and catcalling, physically intimate touching and discrimination.

A similar lawsuit was filed in November 2021 by another employee, Jessica Barraza, who alleged “rampant sexual harassment at Tesla” and “nightmarish conditions” in its factories.

Tesla in December filed a motion to compel arbitration in the Barraza case, arguing it should be handled out of court. It has argued the subsequent harassment claims are similar in nature, indicating the company will likely pursue a similar course of action for each. Many workers at Tesla are subject to mandatory arbitration agreements that require disputes to be handled out of court. A case management conference is scheduled for March in the Barraza suit and could shed light on how the cases will proceed.

Tesla said in the wake of the October jury verdict that efforts to improve employee experience were a work in progress. The company at the time defended against allegations that employees were subject to racist treatment and argued Diaz was not employed by the company itself.

“Mr. Diaz never worked for Tesla,” wrote Valerie Capers Workman, Tesla’s then-vice president of people. Diaz, she said, “was a contract employee who worked” for staffing agencies.

Workman pointed to witness testimony in the Diaz suit from other workers, which she characterized as shedding light on the circumstances in which the behavior took place.

“While they all agreed that the use of the n-word was not appropriate in the workplace, they also agreed that most of the time they thought the language was used in a ‘friendly’ manner and usually by African-American colleagues,” she wrote. “They also told the jury about racist graffiti in the bathrooms, which was removed by our janitorial staff.”

Workman said at the time that Tesla was in the midst of efforts to improve workplace culture, after adding Employee Relations and Diversity, Equity and Inclusion teams.

Still, she wrote, “we do recognize that in 2015 and 2016 we were not perfect. We’re still not perfect.”

Jury orders Tesla to pay more than $130 million in discrimination suit, which alleged racist epithets and hostile work environment

The company said Wednesday that California regulators had not provided it with “specific allegations or the factual bases” for the impending lawsuit. It argued that prosecutors were harassing the company “instead of constructively working with us,” saying legal action would further erode the standing of California’s last remaining automaker.

And it called any legal action a ploy to “generate publicity.”

“At a time when manufacturing jobs are leaving California, the DFEH has decided to sue Tesla instead of constructively working with us,” the company said. “This is both unfair and counterproductive, especially because the allegations focus on events from years ago.”