Tesla loses challenge to California agency suing for racial bias

An employee of a U.S. vehicle factory of Tesla Inc is seen at a security gate in Fremont, California, U.S., March 18, 2020. REUTERS/Stephen Nellis/File Photo

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Aug 22 (Reuters) – A California administrative agency has refused to look into Tesla Inc’s (TSLA.O) claim that the state civil rights watchdog is suing the company for racial bias at a factory assembly rushes to sue companies without conducting thorough investigations.

In a letter, the California Office of Administrative Law denied Tesla’s motion, filed in June, to determine whether the Department of Civil Rights (DCR) had passed “clandestine regulations” that flout requirements it must meet before to sue employers. Read more

The letter obtained by Reuters is dated August 8 but was received by the department last week.

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The OAL, which reviews state agency regulations and can recommend changes, said its decision in no way reflects the merits of Tesla’s complaint.

The department, in a pending lawsuit filed in February, claims Tesla’s flagship factory in Fremont, California, was a racially segregated workplace where black employees were harassed and discriminated against in terms of work assignments, discipline and remuneration. Read more

A Tesla representative, who has denied any wrongdoing in the racial bias case, had no immediate comment.

A DCR spokesperson did not immediately respond to a request for comment. The agency was called the Department of Fair Employment and Housing before changing its name last month.

Tesla’s petition to the OAL was an attempt to restrict the department’s authority to prosecute discrimination cases by requiring it to take additional steps before proceeding, such as providing companies with detailed explanations of alleged violations of the law and make efforts to settle outside of court.

In the pending lawsuit, Tesla argued that the DCR filed the lawsuit without first notifying the company of all claims or giving it a chance to settle.

A California state judge is scheduled to hold a hearing Wednesday on Tesla’s motion to dismiss the case.

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

In April, a state judge reduced a jury verdict for a black worker who alleged racial harassment from $137 million to $15 million. The worker, Owen Diaz, rejected the reduced compensation and opted for a new trial, scheduled for March 2023. read more

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Reporting by Daniel Wiessner in Albany, New York, editing by Deepa Babington

Our standards: The Thomson Reuters Trust Principles.

Daniel Wiessner

Thomson Reuters

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy development. He can be contacted at [email protected]

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