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Tesla's Legal Appeal
Electric vehicle manufacturer Tesla (NASDAQ:TSLA) has urged a US judge to temporarily suspend a lawsuit filed by a federal agency citing serious allegations of racial harassment at its California factory. The automaker contends that two similar cases should be addressed first before the new lawsuit proceeding.
Claims of "Toxic Interagency Competition"
In a document presented to the federal court in San Francisco on Monday, Tesla alleges that the U.S. Equal Employment Opportunity Commission (EEOC) expeditiously commenced the suit in September. They characterized the hurried action as a part of an undesirable rivalry with a California civil rights agency, which had formerly brought forward similar allegations.
Alleged Racial Harassment at Tesla
The EEOC claims that Black workers at Tesla's factory in Fremont, California, have been repeatedly exposed to racially charged language, graffiti featuring the likes of swastikas and nooses, and encountered backlash for voicing their complaints since 2015.
Additional Legal Action
In 2022, Tesla faces an unrelated lawsuit where California's Civil Rights Department (CRD) accused the company of upholding comparable environments and exhibiting racial bias against Black employees in their decisions about pay, promotions, and job assignments. Moreover, a pending class action, launched by Tesla's employees in 2017, implicates the company in instances of racial harassment.
Plea for Suspension Until Other Cases Settle
All these cases are presently at the state court level and predominantly deal with breaches of California's anti-bias legislation. Conversely, the EEOC’s lawsuit pertains to separate federal law prohibiting workplace discrimination and harassment based on race. In its Monday document, Tesla implored the federal court to refrain from initiating a third lawsuit until the current cases reach a conclusion.
"Conducting the state court actions and this lawsuit simultaneously will likely result in unnecessary duplication of effort, potentially leading to conflicting court decisions, and consequently causing an inefficient and wasteful use of judicial resources," Tesla's legal representation asserted.
Shares of TSLA were trading 1.75% higher towards the close of Tuesday’s trading session.
