The Alleged Culture of Racism at Tesla’s Most Important Factory

In November 2017, Marcus Vaughn, a former assembly worker, filed a lawsuit against Tesla, calling the plant “a hotbed of racist behavior.” He alleged that Black workers were repeatedly abused and harassed. This past week, the state of California filed its own suit.

The Department of Fair Employment and Housing has sued Tesla for racial discrimination and harassment, after a three-year investigation. The complaint says that swastikas and KKK were written on bathroom walls, that the N-word and other slurs were repeatedly used, that Black workers were retaliated against for complaining and that they were given more physically demanding jobs and paid less than their white counterparts. It says that when confronted with these cases, Tesla turned a blind eye and tried to evade responsibility.

On Friday’s episode of What Next: TBD, I spoke with Dana Hull, a reporter at Bloomberg News who covers Tesla, about the history behind the case against the company’s Fremont, California, plant. Our conversation has been edited and condensed for clarity.

Lizzie O’Leary: Tesla’s facility in Fremont is the largest auto manufacturing plant on the West Coast, and the plant has a long history. It made cars for General Motors from the 1960s to the ’80s. Later, it was the home of a joint venture between GM and Toyota. That fell apart during the recession and the facility closed in 2010. What happened then?

Dana Hull: It was briefly just this empty carcass. And then during the midst of the recession, Tesla was able to buy it for like $42 million. It was a huge coup for California that this empty plant was going to be revived as an electric vehicle plant.

Tesla immediately went in there and repainted everything white. They added the red Tesla colors and the logos, and they turned this old facility into this gleaming beacon of the future.

Who works at Fremont? What kind of people—and how many jobs—are we talking about?

Easily over 10,000 direct Tesla employees work at the Fremont plant. And then there are 1,000 more who are contractors or subcontractors. It is a very diverse workforce. We don’t have exact data because Tesla has never publicly released the data that they filed at the EEOC, but you have white, Black, Latino, Asian American. It is an incredibly diverse workforce, which mirrors the demographics of California as a whole.

Even before the California lawsuit, the Fremont plant has had a rocky history. CEO Elon Musk defied county health officials in May 2020 during the initial COVID shutdown and restarted production. Then, the plant was the focus of a sexual harassment lawsuit. But what really stands out is the sheer number of complaints about racism at the Fremont plant. Long before the state of California suit, a Black worker named DeWitt Lambert sued Tesla. Lambert, who grew up in Alabama, came to work at Tesla in 2015 on the production line. And almost immediately, he says he was subject to racist taunts and threats from co-workers and supervisors. What is the significance of that suit?

DeWitt Lambert’s story is a really important one, and I hope that everyone who reads about Tesla and every journalist who writes about Tesla remembers DeWitt Lambert. He is the first person who really complained about the treatment at Tesla. And his case was one of the first cases that was brought forward.

This is a man who grew up in the South, right after the civil rights movement. When I interviewed him, the most striking thing that he told me was that he had never heard the N-word directed at him until he moved to California. The word was widespread at the factory, and he complained about it. But DeWitt Lambert was a contract worker, so he had signed an arbitration agreement with Tesla, and his case never got to court. He went to arbitration, and he lost.

One of the key issues here is that a lot of these workers who are alleging discrimination are covered by arbitration rules, so they can’t sue Tesla in open court. Can you explain that wrinkle, and how it fits into this complicated picture?

Arbitration is very common in Silicon Valley. When you are hired and you get your new employee paperwork, you sign all kinds of documents. Typically, one of those documents is an arbitration agreement where you agree to solve any dispute in arbitration. An arbitration is a different process where your complaint is heard not before a jury of peers, but before one arbitration judge, who is typically a retired judge. And it’s the companies themselves that pay for the process.

Several other Black workers sued Tesla. Two, Melvin Berry and Owen Diaz, won their cases. Berry won a million dollars at arbitration, but Diaz—who was hired by a staffing agency, not Tesla—wasn’t subject to arbitration rules and sued in open court. Last year, a federal court ordered the company to pay him $137 million. Diaz told an NBC News reporter about the abuse he endured: “There were N-words scratched into the bathroom stalls. They were calling me a perched monkey and a Spanish version of the N-word. This other guy who was getting on the elevator with me and he was telling me, ‘N, hurry up and push the buttons. You Ns are lazy.’ ” Now, California has stepped in, filing a lawsuit against Tesla that echoes what Diaz said.

If you are not from California, you may not be familiar with the DFEH, and I guess an analogue nationally is the Equal Employment Opportunity Commission. The EEOC has a reputation for not bringing cases, unless it feels like it’s got a lot. Is that similar in California or not?

I think it’s similar in that I don’t think any state agency wants to sue an employer. If you look at the DFEH’s website, they make it very clear that suing is the last regard. The process here was they have been looking at this for almost three years. They informed Tesla that they felt like they had just cause to sue on Jan. 3. They invited Tesla to mediation. Tesla declined until the last minute, and then this lawsuit is a result of the failed mediation. To sue a very large employer is a big deal, and I have to believe that they only did it because they felt there was no other recourse.

There’s some other interesting things in the complaint, where the state alleges that Tesla ignored this stuff. One human resources investigator concluded that, “Banana boy was simply a nickname, not a racial slur.” It sounds like the state is saying this is a culture problem and that the company doesn’t care.

I think the state complaint also makes it clear that the company grew quite quickly and did not have enough HR people. They weren’t trained to investigate racial complaints.

Tesla’s only public comment to date has been a blog post that they put out preemptively before the lawsuit was even filed, taking issue with certain things, cherry-picking parts of it, and making it very clear that they were going to fight the lawsuit.

In that same blog, the company mentions that over the past five years, the DFEH has been asked on almost 50 occasions by individuals who believe they were discriminated against or harassed to investigate Tesla.

The company italicizes this part and says, “On every single occasion when the DFEH closed an investigation, it did not find misconduct against Tesla.” Does that hold water, or is that a spinning of the facts?

That’s a cherry-picked statistic because there have been several complaints and yes, some of them are closed without a finding, but others are given rights to sue letters. When they say over the past five years, are they talking 2016 through 2021, or 2015 through 2020? And are these only the closed cases? What is the numerator of how many cases overall? It’s interesting that they are choosing that one line.

In 2017, when Marcus Vaughn’s accusations were first surfacing, Tesla CEO Elon Musk sent an email to employees. It said, “Part of not being a huge jerk is considering how someone might feel who’s from an historically underrepresented group.” But he also added, “In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.” How is this email indicative of the company’s approach to harassment?

The culture is set from the top. If you had an all-hands meeting where the CEO says, “Racism will not be tolerated and we are going to fully support our HR partners in investigating any allegation,” I think you would see a real culture change. But that’s not the impression that we’re given. We’re given the impression that HR officials actually gave heads up to harassers before harassment complaints were investigated. The complaint makes it clear that Black workers would be baited into responding, and then they would get written up for being “aggressive.” The lawsuit paints a picture of a very toxic environment that has been going on for 10 years.

One thing I’m interested in is what Elon Musk does or doesn’t do publicly as this is happening. Obviously, he has a reputation for being extremely outspoken. Is he going to hold his tongue, or is he going to be himself here?

He hasn’t said anything publicly yet. I think this blog post clearly has his imprint. But I think one thing to watch is that shareholders in the company do have a voice here. At the last shareholder meeting in the fall, there were two resolutions that were brought forward. One was the Calvert Group asked the company to publicly release its EEO-1 data, and that shareholder resolution passed. Tesla has not yet released the data, but they are now at least being asked to by their shareholders. There was another resolution about employee arbitration that failed but got a fairly significant chunk of support.

Now, unless you get really big shareholders all on board with these efforts, it’s hard to imagine them making a big imprint. Sometimes even if a resolution passes, it’s not binding. But we are seeing some of the smaller, more activist shareholders at least raising flags and being like, “Hey, we do care about this, and we want you to take this seriously.”

You’ve been following these cases for a long time now. Are there things that you’re watching that you think are probably flying below most people’s radar?

Companies get sued all the time, but the racial discrimination cases are singularly horrific. And there does seem to be a pattern where the person complained, HR didn’t really do anything, and they just stretch back for years. But there’s also complaints about ageism, disability, being discriminated against because you are on maternity leave or pregnant. We’re at this reckoning time where two years into the pandemic, people are really taking stock of what it means to be a worker and what kind of life you want to have, and how you want to be treated.

We’ve come through the MeToo movement and Black Lives Matter, and you have a generation of workers that is we not willing to put up with this behavior. Yet, it persists at so many levels of our society, and it is still a struggle. I think that all of the lawsuits that you read, whether they’re for Tesla or someone else, point to that.

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.