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California sues Tesla over alleged racial discrimination, segregation

On Behalf of | Feb 18, 2022 | Employment Law

The California Department of Fair Employment and Housing (DFEH) has filed suit against Tesla Inc., alleging that the company’s Fremont plant is a “racially segregated workplace.” It also contends that African American workers suffer from daily racial slurs, discrimination in job assignments, pay, discipline and promotions, and that this all creates a hostile work environment.

According to the Associated Press, the department filed the suit in response to hundreds of worker complaints.

In October 2021, a jury in San Francisco ruled against Tesla in a lawsuit brought by a former contract worker at the Fremont plant, who is Black. He testified that he faced “daily racist epithets,” including the N-word. In addition, he saw employees draw swastikas and scrawl racist drawings and graffiti at the plant. He said that management took no steps to stop the abuse.

The jury awarded him nearly $137 million in compensation.

This is not the first time Tesla has faced allegations of race-based and other discrimination at the Fremont plant. However, the company requires all full-time employees to arbitrate employment disputes, so few of the complaints have led to court verdicts.

Tesla’s response

Tesla is appealing the $137-million verdict. It denies knowing about any such racist conduct at the Fremont plant, where about 10,000 people work.

In a recent blog post anticipating the DFEH’s action, Tesla claimed that the DFEH “has never once raised any concern” about racism at the Fremont plant despite a three-year investigation. It said the company plans to defend itself in court, and that it “has always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others.”

“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,” the blog reads.

When would the company be liable?

Companies can often be held liable for discrimination perpetrated by supervisors and management. If it can be proved true that Tesla operates the plant in a racially discriminatory fashion, Tesla could be on the hook for damages by all the affected employees.

However, it is possible that the harassment allegations in this case accuse co-workers, not supervisors, perpetrated the harassment. If that is the case, Tesla would generally be liable only if it knew or should have known about the harassment and failed to take reasonable action in response.

If you have experienced race discrimination or a hostile work environment, you have rights. Leigh Law Group represents employees in such cases across California.

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