Tesla sued in California over 'racially segregated factory', daily racist slurs

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The Elon Musk run company said it does not tolerate harassment. Photo credit: Getty Images

A California state agency has sued Tesla over allegations by some Black workers that the company tolerated racial discrimination at an assembly plant, adding to claims made in several other lawsuits against the electric car maker.

The lawsuit filed in state court late said Tesla's factory in Fremont, California, is racially segregated, according to excerpts provided by the state's Department of Fair Employment and Housing (DFEH), a civil rights agency.

DFEH quoted some Black workers as saying they are subjected to racist slurs and drawings and assigned the most physically demanding jobs.

A copy of the complaint was not immediately available.

Tesla did not immediately respond to a request for comment. The company said in a blog post on Wednesday, US time it was expecting the lawsuit, which it called "misguided".

The DFEH said working conditions at the plant are so intolerable that many Black employees have been forced to quit.

"Workers referred to the Tesla factory as the 'slaveship' or 'the plantation,' where defendants’ production leads 'crack[ed] the whip,'" according to one excerpt.

Tesla said in the blog post that over the past five years, DFEH had concluded that nearly 50 individual discrimination complaints against the company lacked merit, contradicting the agency's claims of widespread discrimination.

The company said it does not tolerate harassment and has disciplined and fired workers who engaged in misconduct.

"A narrative spun by the DFEH and a handful of plaintiff firms to generate publicity is not factual proof," the company said.

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.

A federal jury in October awarded US$137 million to Owen Diaz, a former employee at the Fremont plant who said managers ignored his complaints about constant racial harassment including slurs and swastikas scrawled on bathroom walls.

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.

While the allegations in the DFEH lawsuit are similar to those in pending cases, it will likely cover many more workers because the agency is not bound by agreements most Tesla employees have signed to bring legal claims in arbitration rather than court, according to Lawrence Organ, a lawyer for Diaz and the plaintiff in the class action lawsuit.

"So this is really a great day for those workers because they will get their day in court," Organ said.

The DFEH said Black workers are assigned difficult, menial jobs in segregated areas of the factory known as "the dark side," and are less likely to be promoted to management positions.

They are subjected to racial slurs including the "N-word," and "hood rats" on a daily basis, according to the agency.

The DFEH can seek the same kind of relief as workers who file lawsuits, including court orders barring future discrimination and money damages.

The penalties can be significant: In December, Riot Games agreed to pay $100 million to settle a sex discrimination lawsuit by the agency.