Tesla’s stock dropped by 3% after a California regulatory agency sued the company for the existence of racial discrimination and harassment in its Fremont factory.
The lawsuit, filed on Wednesday, by the California Department of Fair Employment and Housing (DFEH), a civil rights agency, alleges racial discrimination and harassment in the company’s Fremont factory. In response to the lawsuit, Tesla’s stock prices dropped by $27 to hold at $907.48 on February 10th, 2022.
Numerous complaints received by DFEH led to the lawsuit, according to the agency.
“DFEH found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion creating a hostile work environment,” said Kevin Kish, the director of DFEH.
Tesla published a blog post criticizing the agency prior to the lawsuit. In its blog, Tesla criticizes the agency for “never raised any concern about current workplace practices at Tesla,” but rather focused on misconduct that happened between 2015 and 2019.
Tesla also highlighted in the blogpost its efforts to fight discrimination and help the state of California by being “the last remaining automobile manufacturer in California. The Fremont factory has a majority-minority workforce and provides the best paying jobs in the automotive industry to over 30,000 Californians.”
Tesla declined to comment on the issue.
This is not the first time Tesla was involved in a workplace issue lawsuit. On October 2021, a federal jury awarded a former employee, Owen Diaz, $137 million for the company’s improper control of racial discrimination in its Fremont plant.
While Tesla’s stock was affected negatively by the lawsuit, Biden’s decision to roll ahead with plans to build an EV charging network across the nation is likely to bring light into Tesla’s stock market performance.
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