Tesla Inc (NASDAQ:TSLA) is facing a serious legal challenge as the US Equal Employment Opportunity Commission (EEOC) filed a lawsuit alleging a hostile work environment for racial minorities at its California factory.
The EEOC lawsuit, filed on Thursday, claims that Black employees at Tesla’s Fremont facility have endured severe racial harassment since 2015, including racial slurs, monkey noises, and racist graffiti such as nooses and swastikas displayed across various locations within the facility.
The suit further asserts that when employees reported such incidents, they faced retaliation, including termination, transfers, or changes in job responsibilities.
The alleged racial hostility was not sporadic but described as "frequent," "constant," and "a regular thing" by affected Black employees, according to reports. The EEOC is urging the court to intervene and halt the perpetuation of racism against Black workers at Tesla, seeking compensation for emotional distress and loss of livelihood through back pay or reinstatement.
This is not the first time Tesla has faced legal action concerning racial discrimination: the company previously disclosed an EEOC investigation in April 2022. Additionally, a separate lawsuit by California’s civil rights agency has accused Tesla of ignoring systemic racism against Black workers, particularly at the Fremont plant.
In a related case, a federal jury in San Francisco ordered Tesla to pay approximately $3.2 million to a Black former employee in April, following a racial harassment lawsuit. Although the award was less than initially sought, it underscored the persistent issues related to racial discrimination within the organization.
Tesla shares gained 2.4% on Thursday in New York.