Former Tesla Workers File Lawsuit Alleging Racial Discrimination and Abuse at Electric Car Factory

Owen Diaz, right, and his son Demetric in Oakland, California, on April 10.
Photographer: Michael Short/Bloomberg

On a fall evening in 2015, Owen Diaz went to drop off food for his 20-year-old son Demetric, whom he’d helped find a job at the same Tesla Inc. factory where Owen operated elevators. As he turned the corner, the two African-American men allege in a lawsuit, Owen saw Demetric’s supervisor condemning his black subordinates with curses and slurs: “All you f-cking n-ggers,” they heard him say. “I can’t stand you motherf-ckers.”

“It made me feel like I was less than a man,” said Owen Diaz. “I couldn’t do anything.” In the end, he is doing something: the two are suing Tesla, along with contracting firms West Valley Staffing Group and Citistaff Solutions, alleging a pattern of racial harassment and hostility.

All three deny the allegations. But unlike other former Tesla workers’ allegations of race and sex discrimination, the electric car giant hasn’t been able to keep this one out of court. As contract workers, Owen and Demetric weren’t required, as many direct Tesla employees are, to settle any disputes through binding arbitration. Their case has entered discovery, with depositions scheduled to start later this month. A federal trial is scheduled to start in 2019.

Whether it gets to trial or not, the process threatens to bring unwanted scrutiny and unwelcome disclosures about Tesla’s culture, and the treatment of sub-contracted staff who play key roles in the attempt to meet Chief Executive Officer Elon Musk’s ambitious production goals.

The company said in an emailed statement that it takes discrimination and harassment of all forms “extremely seriously,” has a dedicated team focused on investigating and addressing workplace concerns, and requires online anti-discrimination and harassment training for all employees: “We will never be able to stop every single person in the factory from engaging in inappropriate conduct, but we will continue to do everything that we can to encourage the right behavior and to take action whenever something bad happens.”

In the Diaz lawsuit, both men say they were regularly subject to racist epithets by co-workers and supervisors. Along with slurs, Owen says co-workers told him to “go back to Africa” and drew racist caricatures in bathroom stalls and on bales of cardboard—images of dark-skinned figures with bones in their hair and big lips, captioned with the word “Booo!” He’s kept a photo of one.

When Owen confronted a supervisor about the drawings, they allege, he replied, “We’re just playing, why do you people take things so hard?” Ultimately, they charge, their complaints about discrimination were ignored or rebuffed, until they caused West Valley to terminate Demetric and Citistaff to demote Owen, who then quit.

While neither Owen nor Demetric ever got a paycheck directly from Tesla, they’re suing Musk’s firm as a “joint employer”—a company that exercises enough control over a group of workers that it shares legal responsibility when they’re mistreated. In a November court filing, Tesla denied the allegations. As to joint employer status, Tesla believes that with few exceptions, it’s unfair to hold a company responsible for another company’s actions, a spokesperson said.

Contract employees have become increasingly common, but the responsibility of the client is still unsettled. During the Obama administration, the National Labor Relations Board made it easier to treat companies as joint employers; the precedent is facing a challenge in federal court. The U.S. House of Representatives also passed a bill that would reverse the Obama precedent. The legislation hasn’t progressed in the Senate.

Workers say Tesla exemplifies the trend, making ample use of sub-contracted staff in a wide range of roles at the Fremont factory, which is currently racing to accelerate production of its all-electric Model 3. Chartwell Staffing Solutions is currently advertising for 106 assembly line workers at a “manufacturing company” with a “busy facility in Fremont, Calif.” A Tesla spokesperson said it’s common for firms to add temporary workers during busy periods, and Tesla temps get safety training, access to break areas and free snacks, just like direct hires.

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SOURCE: Bloomberg, Josh Eidelson