Tesla-Freemont to Face Hostile Work Environment Claims in Multiple Forums – Employment Law Weekly

Tesla-Freemont to Face Hostile Work Environment Claims in Multiple Forums

The Equal Employment Opportunity Commission filed a lawsuit in September 2023 in the United States District Court for the Northern District of California against Tesla, Inc. under Title VII of the Civil Rights Act of 1964 for claims arising from Tesla’s race-based employment practices.

The Commission alleges Tesla has subjected Black employees at its Fremont, California manufacturing facilities to severe or pervasive racial harassment and has created and maintained a hostile, race-based work environment there since May 2015. The N-word and other racial slurs, epithets, and stereotyping “permeated Tesla’s Fremont Factory.” Non-Black managers, non-managerial employees, and temporary workers directly addressed Black employees individually and collectively using the N-word. Other race-based slurs and insults were frequently used as well.

At work, Black employees allegedly encountered racist graffiti-including swastikas, death threats, and nooses on bathroom walls, desks, elevators, and equipment. Black employees describe the use of slurs and racist imagery as “casual and normal,” “frequent,” “constant,” “a regular thing,” and occurring “too many times to count.”

Non-Black employees allegedly used slurs and epithets openly in high-traffic work areas and hubs. Supervisors and managers witnessed racially offensive conduct but failed or refused to intercede. Black employees reported the slurs, insults, graffiti, and misconduct to Tesla’s human resources, employee relations, and managerial personnel. Tesla failed to investigate complaints of racial misconduct, adopt policies or practices to ensure its temporary workforce did not perpetuate racial harassment at the Fremont Factory, or otherwise take remedial action to end the ongoing racial harassment.

Tesla’s supervisors and human resources officials allegedly retaliated against Black employees by changing their schedules, assigning them less desirable duties, writing them up without justification, and firing them within weeks of reporting the ongoing racial harassment and discrimination.

Tesla filed a motion to stay the proceedings under the Colorado River doctrine and on the grounds the Commission failed to engage in pre-suit conciliation, and also a motion to dismiss based on the Commission’s failure to identify any member of the alleged group of victims. And also, because the EEOC did not allege all three elements of a prima facie retaliation claim. On March 29, 2024 the court denied all three motions.

In Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, the U.S. Supreme Court recognized “in exceptional circumstances, considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation can support a stay of federal litigation in favor of parallel state proceedings.

Tesla insists this action is substantially similar to two state court actions now before Alameda County Superior Court Judge Grillo: Department of Fair Employment and Housing v. Tesla, Inc., Alameda County Superior Court No. 22CV006830, and Vaughn, et al. v. Tesla, Inc., et al., Alameda County Superior Court No. RG 17882082.

In the Vaughn Case, filed July 2021, the plaintiffs sue Tesla for race-based harassment and discrimination and failure to prevent race-based harassment and discrimination in violation of California’s Fair Employment and Housing Act. In the Civil Rights Department Case, filed in March 2022, California’s Department of Fair Employment and Housing initiated an enforcement action for group relief against Tesla on behalf of California and aggrieved Black Fremont Factory workers, alleging racial harassment, employment discrimination based on race, retaliation, failure to prevent racial harassment and discrimination, and recordkeeping violations.

Tesla asserts the state court actions are substantially similar to this action because 1) “the putative class in the Vaughn Case and the alleged aggrieved group in the [Civil Rights Department] Case include all African American workers at the Factory within the statutory periods,” and 2) the Commission’s complaint is based on the same factual allegations and seeks to vindicate the same legal rights as some claims in the state court actions.

However the court noted that “a Colorado River stay is inappropriate when the state court proceedings will not resolve the entire case before the federal court. If there is any substantial doubt as to whether the state court actions will completely and promptly resolve the issues between the parties, it would be a serious abuse of discretion to grant the stay or dismissal at all.”

Between July 2022 and June 2023, the Commission engaged in conciliation efforts with Tesla, including a seven-hour, in-person conciliation session on June 13, 2023. So, the Commission tried to engage Tesla in discussions to provide Tesla the opportunity to remedy the allegedly discriminatory practice. A court looks only to whether the EEOC attempted to confer about a charge, and not to what happened.

Tesla’s argument for dismissal based on the Commission’s failure to identify any member of the alleged group of victims failed because the Commission brings this enforcement action in its own name, so the Commission is not required to identify an aggrieved individual to survive Tesla’s motion to dismiss.

The complaint is not required to plead a prima facie case of retaliation as long as it contains “a short and plain statement of the claim showing that the pleader is entitled to relief,” Swierkiewicz v. Sorema N. A., 534 U.S. 506. at 508 (quoting Federal Rule of Civil Procedure 8(a)(2)).

Tesla-Freemont to Face Hostile Work Environment Claims in Multiple Forums

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