Another reason for Elon Musk to hate California, as local agency sues electric car maker for race discrimination and harassment
Elon Musk’s already strained relationship with Californian officials faces a fresh challenge after a local agency this week announced it is suing Tesla.
The State of California’s civil rights agency, known as the Department of Fair Employment and Housing (DFEH) announced on Thursday it is suing Tesla for race discrimination and harassment.
The lawsuits alleges that black workers “are subjected to racial slurs by managers and supervisors, segregated to the lowest levels of the workforce, including the contracted workforce, and are severely under-represented in the ranks of executives, senior officials, and managers.”
The civil action was filed in Alameda Superior Court and alleges that Tesla violated the Fair Employment and Housing Act and the California Equal Pay Act.
It said that it had received “hundreds” of complaints and conducted a three year long investigation.
“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,” said DFEH Director Kevin Kish.
“DFEH will continue to take steps to keep workplaces free of harassment and racism,” said Kish.
In addition to alleged race-based segregation in the terms and conditions of employment, DFEH also alleges that Tesla 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.
It said black workers had also protested against the presence of racist writing and graffiti in common areas of the workplace, including swastikas and other hate symbols.
The agency is said to be seeking unspecified damages and for Tesla to reinstate workers who were unfairly terminated.
Tesla’s Fremont factory is located in Alameda County in California, near to San Francisco.
Tesla actually put out a statement on the matter, before the lawsuit was publicly announced.
On Wednesday Tesla in a blog post said the lawsuit was “misguided” and was “a narrative spun by the DFEH and a handful of plaintiff firms to generate publicity.”
It pointed out that during its three year investigation, the DFEH “never once raised any concern about current workplace practices at Tesla.”
It said the lawsuit appears focused on the alleged misconduct by production associates at the Fremont factory between 2015 and 2019.
“Tesla strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints. We also have a Diversity, Equity, and Inclusion team,” it added.
“Tesla has always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others in different ways,” it added. “We recently rolled out an additional training program that reinforces Tesla’s requirement that all employees must treat each other with respect and reminds employees about the numerous ways they can report concerns, including anonymously.”
“Tesla is also the last remaining automobile manufacturer in California,” the EV maker said. “The Fremont factory has a majority-minority workforce and provides the best paying jobs in the automotive industry to over 30,000 Californians.”
“Yet, at a time when manufacturing jobs are leaving California, the DFEH has decided to sue Tesla instead of constructively working with us,” said Tesla. “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,” it said. “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,” it said. “A narrative spun by the DFEH and a handful of plaintiff firms to generate publicity is not factual proof.”
Tesla alleged that DFEH has decline to provide it with the specific allegations, despite repeated requests.
“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,” Tesla concluded. “The interests of workers and fundamental fairness must come first.”
Tesla has had to deal with a discrimination lawsuit before this.
In January 2020, Owen Diaz and his son Demetric Diaz slapped Tesla with a lawsuit, alleging they faced “severe and pervasive racial harassment” in 2015 and 2016, whilst working at Tesla’s factory in suburban Fremont.
Both plaintiffs are black, and alleged they were subjected to repeated racial epithets dozens of times, as well as racist cartoons, and that supervisors engaged in or did little to stop the racism.
In October 2021 a federal jury ordered Tesla to pay more than $130 million in damages, when it found that Owen Diaz was subjected to a racially hostile work environment.
A judge in that case is currently considering Tesla’s appeal for a new trial, or to lower the award, which is one of the largest in a discrimination lawsuit by a single worker.
Tesla is also defending itself against similar claims in a proposed class action on behalf of factory workers in California state court. A judge last year rejected Tesla’s bid to dismiss the claims.
It is fair to say that Elon Musk has a fraught relationship with Californian officials, clashing with them repeatedly over the years.
In May 2020 Musk threatened to move the firm out of California, after Alameda officials refused to allow Musk to re-open the factory during the Coronavirus pandemic.
In December 2020, Musk announced he had personally left California after he had sold his Bel Air homes.
Musk instead relocated to Texas, after living in Los Angeles for 20 years.
Then in October 2021 Musk followed through on his Tesla California warning, and moved Tesla’s corporate headquarters to Texas.
Then in December during an interview he slammed California, saying the US state was doing everything it can to encourage people to leave. He joked that u-haul was doing great business in California.
“There are so many aspects I like about California that I do like,” Musk said at the time, stating that many of his friends are still based there.
“It is beautiful and lots of cool things but increasingly it is difficult to get things done,” Musk added. “California used to be the land of opportunity and now it is… becoming more so the land of sort of overregulation, overlitigation, overtaxation,” he said.