EEOC sues Tesla, alleges racist harassment of Black workers, retaliation against those who spoke out

The U.S. Equal Employment Opportunity Commission has sued Tesla, accusing Elon Musk’s electric car maker of violating “federal law by tolerating widespread and ongoing racial harassment of its Black employees and by subjecting some of these workers to retaliation for opposing the harassment.”

Tesla did not immediately respond to CNBC’s request for comment.

The federal agency responsible for enforcing civil rights laws against workplace discrimination announced it was filing the suit against Tesla on Thursday.

In its complaint, the EEOC alleged that non-Black offenders at Tesla “bandied slurs and epithets openly” around high-traffic work areas around or on the vehicle production lines. Allegedly, supervisors and managers witnessed the racially offensive conduct but failed or refused to intercede.

More from CNBC

  • Brad Gerstner says AI will be bigger than the internet, bigger than mobile
  • AMD’s stock pops after Microsoft tech chief touts chipmaker’s AI products
  • GameStop names Ryan Cohen as CEO effective immediately, won’t receive salary

When Black workers at Tesla reported the “slurs, insults, graffiti and misconduct” to Tesla’s human resources department, employee relations teams or other managerial personnel, the agency said Tesla failed and refused to take steps to address the behavior.

Tesla was previously sued by a state civil rights agency in California over related allegations. A jury also previously ordered Tesla to pay a Black former worker, Owen Diaz, about $3.2 million in damages after finding he endured racist discrimination while working there in 2015.

Last year, a financial filing from Tesla revealed that the EEOC had issued a cause finding against the company. After that, Tesla engaged in a mandatory conciliation process with the EEOC, the filing said. The conciliation process was not successful, leading to the suit announced Thursday.

Read More:   Cornel West’s plan to grow his 'embryonic' campaign: 'Be like jazz and improvise'

According to a statement sent to CNBC by the federal agency, the EEOC is seeking “compensatory and punitive damages, and back pay for the affected workers, as well as injunctive relief designed to reform Tesla’s employment practices to prevent such discrimination in the future.”

The lawsuit, EEOC v Tesla, Inc., Case No. 4:23-cv-04984, was filed in U.S. District Court for the Northern District of California.

Lora Kolodny, CNBC