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Tesla (TSLA) urges US agency to pause racial bias lawsuit

December 19, 2023 3:35 PM

Tesla (NASDAQ: TSLA) has requested a U.S. judge to temporarily halt a federal agency's legal action alleging severe harassment of Black employees at its California assembly plant. The company argues that two comparable cases should be resolved before proceeding.

In a filing submitted to the San Francisco federal court on Monday, Tesla stated that the U.S. Equal Employment Opportunity Commission (EEOC) hurriedly initiated the lawsuit in September. They described this action as a part of a "toxic interagency competition" with a California civil rights agency that had previously made similar claims.

The EEOC has alleged that from 2015 until now, Black employees at Tesla's Fremont, California plant have been consistently subjected to racist language, graffiti containing symbols like swastikas and nooses, and have faced retaliation for voicing complaints.

In a separate legal action in 2022, California's Civil Rights Department (CRD) accused Tesla of tolerating comparable conditions and exhibiting discrimination against Black employees in decisions regarding pay, promotions, and job assignments.

Additionally, a pending proposed class action, initiated by Tesla workers in 2017, also alleges instances of racial harassment.

Both cases are currently in state court and focus on violations of California's anti-discrimination statutes. On the other hand, the EEOC lawsuit involves a distinct federal law prohibiting workplace discrimination and harassment based on race.

In its filing on Monday, Tesla urged the federal court to abstain from engaging in a third lawsuit until the ongoing cases are settled.

"Simultaneous prosecution of the state court actions and this case will involve substantial duplication of effort, create a significant risk of inconsistent court rulings, and result in an inefficient and wasteful use of judicial resources," Tesla's lawyers argued.

Shares of TSLA are up 1.75% near end of day trading on Tuesday.

By Michael Elkins | [email protected]

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