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California sues Tesla over allegations of racial bias

Posted On: Feb. 10, 2022 12:14 PM CST


(Reuters) – A California state agency said it has filed a lawsuit accusing Tesla Inc. of tolerating widespread discrimination against Black workers at an assembly plant, mirroring claims made in several other cases against the electric car maker.

The complaint filed in state court late on Wednesday claims Tesla's factory in Fremont, California, is racially segregated and that Black workers are subjected to racial slurs and discriminated against in job assignments, pay and promotions.

The Department of Fair Employment and Housing said in a statement that the agency has received hundreds of complaints from Tesla workers.

Tesla is already facing at least four race discrimination lawsuits by employees, and is challenging a $137 million jury award in October to a Black former worker in the Fremont factory.

The DFEH's case will likely cover conduct that affected many more employees, as the agency is not bound by agreements that most Tesla workers signed to bring legal claims against the company in arbitration rather than in court.

Tesla did not immediately respond to a request for comment. The company in a Feb. 7 financial filing said it was expecting the lawsuit, which it called misguided.

"Tesla strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints," the company said at the time.

As Tesla has grown to become the world's most valuable automaker, it has faced mounting claims involving pervasive racial and sexual harassment at its flagship Fremont plant and other facilities.

Worker Owen Diaz said managers at the Fremont plant ignored his complaints about constant racial harassment. Mr. Diaz said coworkers routinely used racial slurs, and that swastikas and racist caricatures were scrawled on bathroom walls and other areas of the factory.

A judge in that case is considering Tesla's bid for a new trial or to lower the award, which is one of the largest in a discrimination lawsuit by a single worker.

The company is also defending against similar claims in a proposed class action lawsuit on behalf of factory workers in California state court. A judge last year rejected Tesla's bid to dismiss the claims.

Tesla has denied wrongdoing in those cases, and has said that it has implemented various policies in recent years to prevent racist conduct and punish it when it does occur.

The DFEH lawsuit is significant because the agency can pursue claims on behalf of the many Tesla workers who agreed not to sue in court or join class actions, according to Lawrence Organ, a lawyer for Mr. Diaz and the plaintiff in the class action lawsuit.

"Tesla has stripped away these employees' constitutional rights through this arbitration clause, so this is really a great day for those workers because they will get their day in court," Mr. Organ said.