Tesla, after two jury-trial losses, settles former employee’s racial discrimination suit

Dive Brief:

  • Tesla agreed Friday to settle a years-long racial discrimination lawsuit filed by a former elevator operator after two separate jury trials ended in the employee’s favor, according to court documents.
  • The employee, who had been jointly employed by Tesla and two other firms between 2015 and 2016, alleged other employees directed racist epithets toward him and other Black employees, demeaned him and drew racist caricatures located in various places within the Fremont, California, factory where he worked. After reporting this conduct, the employee claimed he was demoted and, soon after, quit his position.
  • A jury found that Tesla subjected the employee to a racially hostile work environment in 2021 and awarded more than $130 million in damages, which a federal judge reduced to approximately $15 million in 2022. The company successfully sought a retrial but lost again, with a new jury awarding the employee more than $3 million in damages.

Dive Insight:

The suit, removed to the U.S. District Court for the Northern District of California in 2018, described a work environment at Tesla’s Fremont, California, manufacturing facility as “straight from the Jim Crow era.” In a 2019 legal filing, Tesla denied the employee’s allegations.

The same plant has been the source of several high-profile allegations against the automaker. In 2023, the U.S. Equal Employment Opportunity Commission sued Tesla, alleging that it had tolerated racial harassment of Black workers at the Fremont facility and retaliated against workers who complained of harassment.

California’s Department of Fair Employment and Housing filed similar claims against the company in 2022 — also in reference to alleged discrimination at the Fremont plant — and went as far as to allege that Tesla maintained a “racially segregated” workplace.

At present, both the EEOC and the California DFEH suit remain in litigation. In 2022, Tesla published a statement in which it called the DFEH suit “misguided” and said it “strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints.”