The U.S. Equal Employment Opportunity Commission (EEOC) has taken legal action against Tesla Inc (TSLA.O), asserting that the electric car manufacturer allegedly permitted significant harassment of black employees at their assembly plant located in Fremont, California. This aligns with the cases put forth by both the state and Tesla employees.
According to the EEOC statement, it has been reported that black workers at the Tesla factory have allegedly been subjected to racial slurs and offensive graffiti, which include swastikas and nooses, from 2015 until the present time. The Commission has also highlighted that Tesla may not have sufficiently investigated complaints regarding racial misconduct and may have taken unfavourable actions against employees who reported such incidents.
This federal lawsuit further complements the existing discrimination claims that have been filed by employees of the State of California and Tesla. Unfortunately, settlement discussions with the EEOC were unsuccessful after the agency formally expressed concerns last year, which is quite uncommon as the EEOC typically resolves such matters outside of the courtroom.
Tesla is currently engaged in various racial discrimination lawsuits with similar allegations, including a class action lawsuit initiated by workers at the Fremont factory and a lawsuit filed by the California civil rights agency. The company has emphasized its strong stance against discrimination and is committed to addressing worker complaints with utmost seriousness.
The EEOC initiated an investigation into Tesla in response to a complaint from commission chairwoman Charlotte Burrows. Upon discovering a "reasonable basis" to suspect that Tesla may have violated federal anti-discrimination laws, the agency attempted, albeit unsuccessfully, to engage in settlement negotiations with the company. Burrows highlighted the significance of addressing the prevalent issue of workplace harassment, emphasizing the need for every employee to have their civil rights respected. The EEOC lawsuit aims to obtain compensatory and punitive damages for an unspecified number of Black workers, as well as compel Tesla to revise its anti-discrimination and anti-retaliation policies.
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Tesla is currently facing similar charges from the California Department of Civil Rights, which is the state's equivalent of the EEOC. The department has accused Tesla of engaging in discriminatory practices against Black workers regarding pay, promotions, and job assignments, citing violations of state law.
Tesla suggests that the California Department's lawsuit may be influenced by political motives and argues that the agency did not adhere to state law by filing the lawsuit without prior notification of all allegations or chances for reconciliation. In a separate incident, Owen Diaz, a former elevator operator at the Fremont plant, who is of Black ethnicity, is pursuing a third trial for his 2017 lawsuit, alleging severe racial discrimination. Initially, a jury granted him $137 million in 2021, but a federal judge deemed this amount excessive. Consequently, Diaz has chosen to request a new trial instead of accepting a reduced award of $15 million.
Moreover, Tesla is currently dealing with a class action lawsuit in the California state court regarding the alleged mistreatment of black factory workers. Around 240 workers are seeking to join this lawsuit. As a result of these recent developments, Tesla's stock price experienced a 2.4% increase, reaching $246.38.
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