Tesla attacks California agency for filing race bias lawsuit

June 7 (Reuters) – Tesla Inc (TSLA.O) on Tuesday accused a California civil rights agency of rushing to sue businesses without conducting proper investigations, an attempt to go on the offensive as the electric car maker faces claims of widespread race bias at an assembly plant.

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, California, plant was a racially segregated workplace where Black workers were harassed and discriminated against in terms of job assignments, discipline and pay. read more

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Tuesday’s complaint is an attempt to rein in DFEH’s authority to pursue discrimination cases by forcing the agency to take additional steps before suing, such as providing businesses with detailed explanations of alleged legal violations and making efforts to settle outside of court.

DFEH and OAL did not respond to requests for comment.

A California state judge on Tuesday said he would likely deny Tesla’s motion to pause the lawsuit while the OAL considers the company’s new complaint. The judge will hold a hearing on Wednesday.

The lawsuit is one of several pending in California courts to accuse Tesla of tolerating discrimination and sexual harassment at its factories.

A state 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. read more

Tesla is also facing a class action that makes similar claims of race bias and at least seven sexual harassment laws by female employees.

Tesla has denied wrongdoing and said the DFEH’s 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.”

In a short filing last month, DFEH said state law does not impose strict requirements on the agency prior to suing employers, and that its probe of Tesla was thorough and complied with state law.

OAL reviews state agency regulations and can issue determinations that agency rules are invalid and recommend that rules be repealed or amended.

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.

In Tuesday’s complaint, Tesla 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 (ATVI.O), which is facing a sex discrimination lawsuit filed by DFEH last year, that similarly accuses the agency of failing to conduct a proper investigation.

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Reporting by Daniel Wiessner in Albany, New York; Editing by Amy Stevens and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.


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