Tesla is facing multiple lawsuits accusing the company of racial harassment of Black employees at its Fremont, California factory.
In 2021, a jury found Tesla liable for subjecting a Black former elevator operator to a racially hostile work environment. The jury ordered Tesla to pay more than $3 million in damages.
In April 2023, a federal jury in San Francisco ordered Tesla to pay about $3.2 million to a Black former employee who won a racial harassment lawsuit.
In October 2021, a jury awarded a Black former Tesla employee $137 million in damages.
Tesla is also facing:
- A lawsuit by a U.S. civil rights agency
- A class action by workers at the Fremont plant
- A lawsuit by the California Department of Fair Employment and Housing on behalf of more than 4,000 current and former Black Tesla workers
Tesla has denied wrongdoing in these cases. The move turns the spotlight back on Tesla’s Fremont, Calif., factory, which in recent years has been the subject of allegations of racial harassment and discrimination among workers on the factory floor.
The EEOC’s claims of widespread racial misconduct at the plant echo those made in a lawsuit filed last year by a California civil rights agency that said Tesla ignored years of complaints from Black factory workers.
“The racial misconduct was frequent, ongoing, inappropriate, unwelcome and occurred across all shifts, departments, and positions,” the EEOC said in the lawsuit filed in the Northern District of California. The agency cited the use of racial slurs, racist epithets and race-based stereotyping.
Tesla has said it “strongly opposes all forms of discrimination and harassment” and has a track record of disciplining and terminating employees who use racial slurs and engage in other forms of misconduct.
More than 20,000 people work at the Fremont factory, where Tesla manufactures its top-selling electric vehicles—the Model Y crossover and Model 3 sedan—as well as its luxury EVs.
The EEOC said it sought to settle with Tesla before filing its lawsuit and was unable to reach an agreement. In the past, Chief Executive Elon Musk has demonstrated a willingness to see legal disputes through to trial. Shares of Tesla rose 2.4% Thursday to $246.38.
The lawsuit claims Tesla failed to investigate complaints or adopt policies to ensure temporary workers didn’t harass their colleagues. The company also is accused of firing Black employees after they reported or opposed racial harassment. One Black worker saw death threats and racist graffiti in the bathroom, the lawsuit said.
Many of Tesla’s factory workers are contractors employed through staffing agencies, and the company previously has sought to distance itself from the behavior and experiences of those workers.
In 2021, a jury found Tesla liable for subjecting a Black former elevator operator who was employed through a staffing agency to a racially hostile work environment and failing to prevent racial harassment. A separate jury ordered Tesla to pay more than $3 million in damages.
The California agency’s lawsuit is pending. Tesla has alleged the department violated state rules in bringing the suit. Cases brought by the EEOC can lead to financial penalties.
For example, Ford agreed in 2017 to pay up to around $10 million to settle claims of racial and sexual harassment, as well as retaliation, involving employees at two Chicago-area plants.
The federal agency also has asked the court to order Tesla to adopt policies aimed at ensuring equal employment opportunities for Black workers.
Such labor issues can draw the attention of unions. Several years ago, workers in Fremont sought to organize with the help of the United Auto Workers union.
Tesla took steps to hinder that effort in violation of U.S. labor law, the National Labor Relations Board has ruled. Tesla has appealed and denies wrongdoing.
The UAW is on strike at General Motors, Ford Motor and Chrysler-parent Stellantis, after contract negotiations with the automakers failed to produce new labor contracts.
Musk’s companies are facing federal scrutiny on several fronts, including from the Justice Department.
Manhattan-based federal prosecutors are investigating personal benefits Tesla may have provided Musk since 2017 as part of a criminal probe that deals with issues including a proposed house for the CEO, the Journal has reported.
As of last year, federal prosecutors in Washington and San Francisco were investigating whether the carmaker misled consumers and investors about how its advanced driver-assistance system known as Autopilot performed.
Separately, the Justice Department sued Musk’s rocket company, SpaceX, last month alleging the company discriminated against refugees by discouraging them from applying for jobs and refusing to hire them. SpaceX has sought to block the DOJ’s lawsuit, calling it unconstitutional, while denying it discriminated against job seekers.
