Tesla Inc. was sued Thursday by the U.S. Equal Employment Opportunity Commission, which alleges the EV maker violated federal law by “tolerating widespread and ongoing racial harassment of its Black employees” at its Fremont, Calif., plant, and by retaliating against those opposing the harassment.
Black employees at the Fremont factory, Tesla’s
TSLA,
first assembly plant and for years its only vehicle-manufacturing facility in the U.S., “have routinely endured racial abuse, pervasive stereotyping and hostility” as well as having racial slurs hurled at them, the lawsuit alleges.
“Slurs were used casually and openly in high-traffic areas and at worker hubs,” the EEOC said. Black employees “regularly” saw graffiti with slurs, swastikas, threats and nooses throughout the facility, including on desks, in bathroom stalls and elevators, according to the suit.
Tesla, which disbanded its media relations team during the pandemic, did not immediately return a request for comment. In August, SpaceX, another one of Tesla’s Chief Executive Elon Musk’s companies, was sued by the Justice Department over its hiring practices.
Employees who spoke up against the racial hostility suffered retaliations that included being fired or transferred, the EEOC said.
The lawsuit was filed in the U.S. District Court for the Northern District of California after attempts at reaching a settlement before the litigation. It seeks compensatory and punitive damages as well as back pay for the affected workers. It also seeks changes to Tesla’s employment practices to prevent discrimination in the future, the EEOC said.
A Black Tesla employee was awarded $137 million in 2021 by a jury that agreed he was subjected to racial harassment at the Fremont factory, but in April 2022 a judge reduced the award to $15 million.
Shares of Tesla have doubled so far this year, compared with an advance of around 12% for the S&P 500 index
SPX.
The first Model S rolled out of the Fremont factory in 2012, and the plant now makes Model S, Model 3, Model X and Model Y vehicles, with capacity to make more than a million vehicles a year as well as energy products and battery cells.
Tesla opened up its second U.S. vehicle-making factory in the Austin, Texas, area in the spring of 2022.
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