Apr 12, 2023 - Technology

Tesla denied bid to stop worker race discrimination case in California first

A Tesla logo is seen in Gothenburg. Photo: Karol Serewis/SOPA Images/LightRocket via Getty Images

The California Supreme Court on Wednesday denied Tesla's petition to review a case involving allegations of systemic racial discrimination at the company's facilities in the state.

Why it matters: The unanimous ruling allows Black workers at a Tesla assembly plant in Fremont to seek a public injunction requiring the electric vehicle maker to acknowledge and address discrimination in the workplace.

  • This is the first time such a ruling has been made in California under the state's Fair Employment and Housing Act, per an emailed statement from attorneys for the plaintiffs.
  • It also adds to the legal headaches for Elon Musk and his company face.

Driving the news: A lower court ruled in January that two Black employees are allowed to sue Tesla for damages instead of going the arbitration route in the case.

  • As part of the ruling, they were also allowed to request a public injunction forcing Tesla to modify its treatment of workers and this was upheld on Wednesday.

What they're saying: "Tesla's latest attempt to stall the prosecution against the company for its despicable race discrimination and harassment against Black workers has — once again — failed,” said Bryan Schwartz, one of the co-lead counsel for the plaintiffs in the class action case, in an emailed statement on Wednesday evening.

  • "We are excited to finally certify our class on behalf of, we believe, thousands of Black workers and move forward without further delay," Schwartz added.
  • "The Supreme Court’s refusal to disturb the important Court of Appeal decision is especially important because it confirms that workers can seek a public injunction under the Fair Employment and Housing Act, a right which cannot be stripped by an individual arbitration agreement."

The big picture: A federal jury in San Francisco last week awarded $3.2 million in damages to a Black former employee of the Freemont factory in a racial harassment case.

  • The California Civil Rights Department has filed a lawsuit against Tesla accusing the auto maker of violating state laws on racial discrimination and the company has countersued the agency.

Meanwhile, Tesla was hit with a lawsuit Friday that accuses company employees of sharing "intimate" images captured by the vehicle cameras of customers in violation of Californian privacy rights.

Of note: Tesla did not immediately respond to Axios' request for comment.

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