Tesla challenges powers of California agency behind race bias lawsuit

Carmaker is facing a series of race and sex discrimination lawsuits by factory employees

Jun 07, 2022

A worker watches a mechanical press line at the Tesla factory in Fremont, Calif. PHOTO BY STEPHEN LAM/REUTERS /REUTERS

Tesla Inc filed a complaint on Tuesday accusing a California civil rights agency that is suing the electric car maker for race discrimination of rushing to file lawsuits against businesses without conducting proper investigations.

Tesla in a 10-page complaint told California’s Office of Administrative Law (OAL) that the state Department of Fair Employment and Housing (DFEH) has adopted “underground regulations” that flout requirements it must meet before suing employers.

DFEH in a February lawsuit claimed Tesla’s flagship Fremont, Calif., plant was a racially segregated workplace where Black workers were harassed and discriminated against in terms of job assignments, discipline and pay.

Tesla has denied wrongdoing and said the lawsuit was politically motivated. In its filing on Tuesday, Tesla claimed DFEH violated state law by suing Tesla without first notifying the company of all of the claims or giving it a chance to settle.

The company said DFEH treats those requirements as “a mere bureaucratic nuisance requiring only sham compliance.”

DFEH and OAL did not immediately respond to requests for comment.

OAL reviews state agency regulations and can issue determinations that agency rules are invalid but has no enforcement powers.

Tesla could use a favorable ruling from OAL to urge a state judge to dismiss DFEH’s lawsuit or order the agency to adopt new procedures.

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The company in an April court filing said it intended to file a complaint against DFEH and moved to pause the lawsuit pending a decision by OAL.

A state judge on Tuesday issued a tentative decision saying he would likely deny Tesla’s motion, according to Bloomberg Law. The judge is scheduled to hold a hearing on the motion on Wednesday.

Tesla in Tuesday’s complaint said DFEH’s alleged misconduct has been widespread and is not unique to its case against the company.

Tesla cited court filings by Activision Blizzard Inc , which is facing a sex discrimination lawsuit filed by DFEH last year, that similarly accuse the agency of failing to conduct a proper investigation.

DFEH in court filings in both cases has said state law does not impose strict requirements on the agency prior to suing employers and that its probes in both cases were thorough.

Tesla, meanwhile, is facing a series of race and sex discrimination lawsuits by factory employees.

A California judge in April awarded $15 million to a Black former elevator operator who says he was subjected to severe racial harassment at the Fremont plant.

That decision, which the worker is seeking to appeal, slashed a $137 million jury verdict.