Feb 7, 2022 - Economy

California warns Tesla over racial discrimination allegations

Elon Musk faces forward

Photo: Patrick Pleul/picture alliance via Getty Images

Tesla said Monday that a California state agency warned it has grounds for a civil complaint over allegations of race discrimination and harassment at the company.

Why it matters: A federal jury in California last year ordered Tesla to pay $137 million in damages to a Black former employee who accused the company of ignoring racist abuse he endured from other workers.

  • The company disclosed the notice from the California Department of Fair Employment and Housing in an annual regulatory filing with the Securities and Exchange Commission.

The big picture: The filing also included a disclosure that the company received a subpoena from the SEC in November to ensure compliance with a previous 2018 settlement deal that required lawyers to vet all of Elon Musk's tweets about the company before they go out.

  • The SEC has accused Musk of violating the terms of the deal on at least two occasions, saying he has sent unauthorized tweets regarding Tesla's solar roof production volume and its stock price.
  • Lawyers for Musk have previously criticized the SEC over the settlement, saying it trampled "on Musk's First Amendment rights" in an "unconstitutional power grab" that "smacks of retaliation and censorship."

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