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Race Bias Lawsuit: Tesla v. EEOC

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Tesla says the Equal Employment Opportunity Commission lawsuit alleging widespread race-based harassment should be dismissed but the EEOC claims the electric-car maker allowed its Fremont factory to be filled with racial harassment.

San Francisco, CAAt a San Francisco federal court yesterday, Tesla Inc. said an Equal Employment Opportunity Commission (EEOC) lawsuit claiming widespread race-based harassment at the company’s Fremont, California facility is short on details and, thereford, the   lawsuit should be dismissed.

The EEOC sued Tesla in September 2023, claiming that racial slurs, racial epithets and racial stereotypes were frequently used since at least 2015 toward Black workers and the Fremont factory was covered in racially offensive graffiti. The electric-car maker argued in court that the agency:
  • Is wasting judicial resources with vague allegations
  • Is intent on harassing Tesla through "a politically driven power grab."
  • Fails to name a single victim or perpetrator” of the purported racial abuse and related retaliation.
  • Has not identified a single incident, time, or shift where Tesla was aware of a violation of its anti-discrimination and harassment policy and failed to act.
Tesla also said in December that the EEOC's lawsuit duplicates two lawsuits already pending in state court. Contract worker Marcus Vaughn filed a proposed class action in 2017 alleging that the Fremont factory is a "hotbed for racist behavior" and that he was terminated shortly after making internal complaints about the work environment. And the second lawsuit was filed by the California Civil Rights Department (CRD) in early 2022 in state court alleging that slurs, insults and hateful graffiti were commonplace at the Fremont facility.

Both of the state court cases are currently pending, with a hearing on a motion for class certification in Vaughn's case currently set for January 19. In a separate racial harassment lawsuit, Tesla is also appealing a $3.2 million award granted to a Black former elevator operator at the Fremont plant.

Law360 reported that Tesla argued over the race bias suit filed by the EEOC and how it’s also part of a public dispute between the federal agency and CRD that stems from the EEOC's $18 million deal with Activision Blizzard over allegations of sexism that the CRD tried to block. Tesla said the EEOC and CRD historically have worked together to avoid duplicating investigations and allegations, but that went by the wayside after the federal agency struck the $18 million deal. According to Law360, the California agency unsuccessfully tried to block the deal in February 2022 over fears that it would derail its own investigation into the company, and in March, the EEOC told a federal judge that the CRD was still impeding the agreement.

Tesla said the Activision debacle caused the CRD to hurriedly wrap up a race discrimination investigation and file its 2022 lawsuit against Tesla to avoid being outflanked by the EEOC again. As well, the EEOC also fast-tracked the end of its investigation, though it never visited the Fremont facility.

The EEOC responded on January 3rd, saying it would be a mistake to pause its lawsuit since the state court cases don't involve the EEOC or its federal claims. It also said the Activision proceedings have no impact on the allegations against Tesla. But the electric-car maker doesn’t see it that way. Back to Law360: Tesla wrote that, "This case is an unprecedented and unnecessary pile-on against an employer that has done much to advance the opportunities and lives of its minority-majority workforce in Fremont…Common sense shouts out that there is no reason for this lawsuit to have been filed other than some unspoken political agenda or the continuing toxic turf war between EEOC and CRD.… This court should leave Tesla out of that inter-governmental feud."

The case is Equal Employment Opportunity Commission v. Tesla Inc., case number 3:23-cv-04984, in the U.S. District Court for the Northern District of California.


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