Tesla must face hostile work environment claims for treatment of Black workers

SAN FRANCISCO (CN) — A federal judge is allowing hostile work environment and retaliation claims to proceed against Tesla over the company’s treatment of Black workers at its Fremont, California, factory since May 2015.

The Equal Employment Opportunity Commission sued Tesla in federal court in September 2023, accusing the Elon Musk-owned automotive and clean-energy company of pervasive racial harassment against Black employees, in violation of the Civil Rights Act, which prohibits employment discrimination based on race, color, religion, sex or national origin.

The commission claimed in its complaint that Tesla supervisors and others regularly targeted Black workers at the Fremont factory with racial slurs, that racist graffiti such as swastikas and nooses were left on desks, equipment and vehicles at the Fremont factory and that Black workers who complained about the treatment were fired.

“Despite awareness of such racial misconduct, Tesla has failed to investigate Black employees’ complaints, adopt policies or practices to ensure its temporary workforce did not perpetuate racial harassment at the Fremont Factory, intercede when witnessing racial misconduct, or otherwise take remedial action to end the ongoing racial harassment," U.S. District Judge Jacqueline Scott Corley wrote in her 18-page opinion on Friday.

Tesla had hoped to dismiss the commission’s claim, arguing that it “fails to allege facts sufficient to establish the severity and pervasiveness element necessary to state a hostile work environment claim.”

Corley determined that Tesla misstated the standard, and denied its motion to dismiss. She wrote that the question was whether or not the purported conduct was severe enough to alter the conditions of employment, a standard that the commission met.

Corley wrote that the commission's claims support an inference that the Fremont factory has been “permeated” with racist practices that alter the conditions of Black employees’ employment.

Tesla argued that the commission hadn't identified any members of the purported group of victims but Corley said that did not matter because the commission was suing Tesla in its own name.

“The commission is not required to identify an aggrieved individual to survive Tesla’s motion to dismiss,” Corley wrote.

Corley also allowed retaliation claims to proceed against Tesla as well, because she said the commission had sufficiently claimed that Tesla fired Black employees after they complained of mistreatment, including one employee that was fired immediately after being advised of Tesla’s non-retaliation policy.

“The alleged employment actions by Tesla might have dissuaded a reasonable worker from making or supporting a cause of discrimination. So, these allegations are sufficient to support an inference Tesla subjected Black Fremont Factory employees to adverse employment action,” Corley wrote.

In a separate case Friday afternoon, Corley dealt another blow to another Elon Musk venture when allowed putative class claims to proceed against X. Corp from a former Twitter employee.

That employee said her complaint that after Elon Musk bought the company in November 2022, the social media company began a series of reduction in force layoffs that disproportionately affected female employees and employees that were 50 or older. 

The plaintiff sued behalf of herself and other female Twitter employees and employees aged 50 or older affected by the layoffs.Shortly after the layoffs, the plaintiff claims that Musk gave workers an ultimatum to either work “unreasonable” hours or lose their jobs. When the plaintiff did not agree to the ultimatum, she was terminated.

In her ruling in that case, Corley allowed the sex-based discrimination claims to survive because there was enough on the record to show that the majority of those laid off were women, but tossed the age discrimination claims.

In their complaint, the plaintiffs claimed that Musk had a history of sexist behavior and statements, including tweets where he said he believed being a mother was more important than having a career, and had named a school using the acronym “TITS.”

Accordingly, drawing inferences in plaintiff’s favor, these facts plausibly support an inference Musk, the owner and CEO of Twitter, had a discriminatory intent to have more women than men ‘forced out of the company’ when he implemented the post-RIF Policies and sent out the ultimatum email because he expected women to be less committed to their career and thus less likely to consent to these changes," Corley wrote.

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