Electric car manufacturer Tesla is being sued by the US state of California for racial discrimination after a three-year investigation revealed hundreds of complaints from workers.
The state’s Department of Fair Employment and Housing (DFEH) said it found that Tesla kept black workers in the lowest level roles in the company, and paid them less than white colleagues. It denied black workers training and promotions and disciplined them more stringently than other workers and gave black workers more physically demanding roles in the company’s plants.
There was also evidence heard by investigators that the company retaliated against black workers who formally complained to HR. Managers and other colleagues used racist slurs to intimidate black staff and ignored complaints about the use of language. There was also an incident where swastikas and other racist symbols were displayed in common areas which were not rapidly disposed of – which had first come to light after a jury award of $137m (£101m) to former worker Owen Diaz who had complained of “daily racist epithets” over a two-year period.
The department has asked the court to end unequal treatment of black employees and contractors and to pay damages to the workers and the state authorities. It also said Tesla should reinstate workers who had been dismissed on unfair grounds.
The car firm called the filing of the lawsuit “misguided” and “a narrative spun by the DFEH and a handful of plaintiff firms to generate publicity”.
Tesla, which had previously warned investors of the looming case, claimed it had “always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others.”
It urged the DFEH to pause its case and seek Tesla’s side of the story, adding in a blog post, “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.”
Although people of latino origin and Asians have also sued the company over racial discrimination, the DFEH suit is focused on people with African American heritage who worked at the Fremont vehicle assembly plant near San Francisco between 2015 and 2019.
A failure at Tesla to comply with state law and to provide standardised training to managers on how to investigate racial harassment complaints were among the DFEH’s allegations.
According to the DFEH, there are no black executives at Tesla but 20% of the factory operatives at the Fremont assembly plant were black, meaning that there was severe under-representation of black employees in more influential higher paying roles.
The Superior Court of California state will hear the case in the county of Alameda.