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Tesla hit by lawsuit, called 'hotbed for racist behavior'

Tesla has been hit with another lawsuit over the working environment at its assembly plant, this one alleging the factory is a “hotbed for racist behavior.”
Image: Elon Musk speaks at the International Space Station Research and Development Conference in Washington
FILE PHOTO - Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington on July 19, 2017.Aaron Bernstein / Reuters file

Tesla has been hit with another lawsuit over the working environment at its Fremont, California assembly plant, this one alleging the factory is a “hotbed for racist behavior.”

The electric carmaker, which bills itself as a progressive force for change in the auto industry, has been hit by several previous lawsuits, including one alleging sexual harassment and gender discrimination on the factory floor. The latest, brought as a class-action, claims African-American workers were targeted by racial slurs and that Tesla did not act in response to their complaints.

The automaker has also been accused of discrimination against gay and older workers and, following a recent mass firing, it is under review by the National Labor Relations Board, which has received complaints that some workers were dismissed because they were advocating a vote to unionize the suburban San Francisco plant.

Related: Can Tesla Bounce Back from Disastrous Model 3 Launch?

The latest lawsuit, filed by former Tesla worker Marcus Vaughn, said he was frequently greeted with the “n-word” both by coworkers as well as Tesla supervisors. Vaughn claims the company failed to follow up on his complaints and then fired him in October for “not having a positive attitude.”

The lawsuit noted that Vaughn is one of more than 100 black workers at the Fremont factory and is seeking the court’s permission to represent the entire group.

"Although Tesla stands out as a groundbreaking company at the forefront of the electric car revolution, its standard operating procedure at the Tesla factory is pre-Civil Rights era race discrimination," stated Vaughn’s lawsuit, filed Monday in California’s Alameda County Superior Court.

Some reports have indicated that workers are under intense pressure to produce hundreds of thousands of vehicles per year.

Nearly one-third of Tesla’s workforce, about 10,000 employees in all, is based at the Fremont plant that houses three product lines: the Model S battery-sedan, the Model X battery-SUV, and the new Model 3.

CEO Elon Musk has laid out plans to boost annual production capacity of the Model 3 to 500,000, a target he had hoped to reach by late next year, but the factory has run into a series of snags since the car's launch in July. Many analysts believe it will take significantly longer than the company says to build production rates, an issue complicated by limited cash resources.

Even as Tesla has struggled to solve its Model 3 problems it has also been snagged by the poor quality of the Model X. Consumer Reports magazine’s latest Automotive Reliability Survey named the sport-utility vehicle tied for last among scores of vehicles now on the market, along with the Cadillac Escalade.

It is unclear how much of a role tension within the factory is playing in terms of its quality and production problems, though some reports have indicated that workers face intense pressure. In October, Musk confirmed, about 700 Tesla employees were fired for what it claimed was poor performance. It was not stated how many worked at Fremont, though a sizable number were believed to have been stationed along the assembly line.

The company has been accused of using poor performance reviews to dismiss workers who were trying to organize on behalf of the United Auto Workers Union. Last February, CEO Musk claimed in an interview with Gizmodo that one employee was “paid by the UAW to join Tesla and agitate for a union.”

A complaint filed following the dismissal of some pro-union employees has led to a preliminary investigation by the NLRB.

Allegations of discrimination against gays, women, and the disabled

According to various complaints filed against the automaker, however, it has been accused of allowing discrimination against a wide range of groups.

Former employee Jorge Ferro claimed he was mocked for wearing “gay tight” clothing and then harassed after complaining to the company. Tesla subsequently dismissed him, he claimed, alleging Ferro had been injured and, he said, telling him that there is “no place for handicapped people at Tesla.”

Also this year, former engineer AJ Vandermeyden sued Tesla claiming sexual harassment and gender discrimination. At the time, she declared that, “until somebody stands up, nothing is going to change.” She was subsequently dismissed.

Tesla claimed Vandermeyden’s claims were dismissed following an independent investigation. A judge has since ordered arbitration in the case of the former engineer’s discharge.

It has defended itself against other allegations, citing performance reviews rather than discrimination at the Fremont plant. But critics suggest Tesla isn’t doing enough and the new suit filed by former factory worker Vaughn cites an e-mail Musk sent to employees on May 31.

“Part of not being a huge jerk is considering how someone might feel who is part of [a] historically less represented group,” Musk wrote. “Sometimes these things happen unintentionally, in which case you should apologize. In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.”

“The law doesn’t require you to have a thick skin,” Larry Organ, an attorney at the California Civil Rights Law Group, told the Bloomberg news service. "Tesla is not doing enough. It’s somewhat akin to saying ‘stop being politically correct.’ When you have a diverse workforce, you need to take steps to make sure everyone feels welcome in that workforce."

Tesla released a statement late Tuesday addressing the lawsuit, saying "Tesla is absolutely against any form of discrimination, harassment, or unfair treatment of any kind. When we hear complaints, we take them very seriously, investigate thoroughly and, if proven to be true, take immediate action."