Tesla Countersues California Agency in Workplace Racism Battle

Tesla Inc. filed a countersuit against the California Civil Rights Department after the agency accused the company of fostering racial bias at its main factory.

The world’s most valuable car maker said state officials didn’t give it adequate notice of claims or earnestly engage in efforts to resolve the dispute in violation of state law.

The department’s conduct “is entirely inconsistent with the principles of fair notice, neutral investigations, good faith conciliation, and mandatory pre-suit mediation,” required under state employment law, Tesla said in its complaint filed Thursday in Alameda County Superior Court. The suit was brought unlawfully without seeking public comment or holding a hearing, according to the complaint.

A judge last month rejected similar arguments by Tesla in its request for dismissal of the department’s complaint, which described the company’s Fremont plant as a “racially segregated workplace.”

Tesla wants a court order barring the agency from applying “invalid and unlawful underground regulations” until the agency comes up with a fresh set of rules governing company investigations.

A spokesperson for the agency didn’t immediately respond outside regular business hours to a request for comment.

The countersuit comes a day after the department asked a judge to order Tesla to cooperate with an investigation into an individual’s civil rights complaint against the company filed in 2020. The agency said the company was withholding documents related to race-based harassment complaints, internal investigations and disciplinary records.

“Tesla has impeded CRD’s investigation by refusing to provide substantive investigative discovery responses,” the agency said in a court filing.

The countersuit was reported earlier by Reuters and the Wall Street Journal.

The agency said in its February complaint that Black workers at Tesla complained to the department about hearing racial slurs as often as 50 to 100 times a day and spotting racist graffiti on restroom walls, work stations, lunch tables and other areas.

Tesla has said it “strongly opposes all forms of discrimination and harassment.”

A former contractor for Tesla who won a $137 million jury verdict over racist abuse at the factory is headed for a retrial against the company in March after disagreeing with a judge who said the award should be reduced to $15 million.

The case is Tesla Inc. v. California Civil Rights Department, 22CV006830, California Superior Court, Alameda County.