Tesla catches big break in federal racial discrimination case | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

When you are a company as big as Tesla, lawsuits are a given. While one of the company’s higher-profile lawsuits just took a turn for the better, Tesla’s racial discrimination case is still months away from being resolved.

Two years ago, under the President Joe Biden administration, the U.S. Equal Employment Opportunity Commission (EEOC) sued Tesla over claims that it tolerated severe harassment of Black employees at its Fremont flagship factory.

Recent Tesla lawsuits

A Cybertruck crash killed three people in Piedmont, Calif., in 2024, The Guardian reported. The lawsuit alleges a design flaw in the vehicle’s door handles trapped occupants inside as the vehicle caught fire.
Tesla is being sued over claims related to its Full Self-Driving feature, according to Electrek. Plaintiffs allege the company misled customers about the capabilities of the technology.
A Florida jury awarded a family $243 million in damages over a 2019 crash involving the Tesla Autopilot. Tesla is appealing.

It’s not the first time Tesla has been in hot water over race-based harassment.

In 2022, the California Department of Fair Employment and Housing (DFEH) filed a civil action against Tesla, alleging the company segregated Black employees to the lowest levels of the workforce across the state, including contracted work.

The agency said it received hundreds of complaints over a three-year period before filing its civil action. Tesla allegedly “turned a blind eye to years of complaints from Black workers protesting the near-constant use of racial slurs in the workplace.”

That civil action was the foundation for several individual lawsuits.

Tesla was initially ordered to pay Owen Diaz, a Black former contract worker, $137 million as a judgment in his racial discrimination lawsuit, but that amount was cut to $15 million on appeal. Tesla was awarded a retrial, which it lost again, but the employee payout was cut to $3 million.

The California Civil Rights Department took legal action against the company in 2023 for its failure to comply with an investigative subpoena related to a confidential investigation into harassment and discrimination charges at the Fremont plant.

The Fremont workplace lawsuits haven’t been confined to racial discrimination.

Just one month after a California woman filed a lawsuit alleging “nightmarish conditions of rampant sexual harassment” at the Fremont plant, six more women filed separate but similar complaints in 2021, according to a Law360 article reprinted on Winston & Strawn’s website.

The federal government’s lawsuit against the company was filed under a more hostile presidential administration. President Donald Trump’s administration helped move the litigation forward this week.

Tesla has faced multiple allegations of race-based harassment and discrimination.

Photo by Justin Sullivan on Getty Images

Tesla agrees to mediation in lawsuit accusing company of racism

For its part, Tesla has denied all accusations of racism.

In a statement responding to the DFEH lawsuit, the company touted its diversity, equity, and inclusion program while saying that it has always disciplined and terminated employees who use racial slurs or harass other people.

It also noted that the agency had investigated complaints against the company numerous times in the past and found no wrongdoing.

However, the EEOC lawsuit found the same pattern of discrimination against Black workers that included racist slurs, swastikas, and nooses. The EEOC also claims Tesla fired or retaliated against workers who reported harassment.

But that was the old EEOC. New EEOC Director Andrea Lucas says her priorities include “rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights…” and other prominent MAGA themes.

This week, Tesla agreed to mediation in the EEOC case, which could be a big step toward resolving the litigation. The EEOC said it is working with Tesla to choose a mediator, and that negotiations could begin in March or April.

Both sides plan to submit a proposal to the presiding judge by June 17 outlining what should happen if mediation and settlement discussions are unsuccessful.

Moving the case from open court to federal mediation grants it confidentiality under the Administrative Dispute Resolution Act.

Notes taken during the mediation are destroyed, and the sessions are not tape-recorded or transcribed; the parties involved must sign agreements that keep what happens in the meeting confidential.

The Trump administration handed a huge win to Tesla, the company run by the guy who spent $250 million to get Trump elected.

What a country.

If Tesla is run anything like X, then racial discrimination is very believable

Once again, Tesla denies all accusations of racist discrimination at its Fremont plant.

But if Tesla is run like one of Elon Musk‘s other companies, the plaintiffs’ complaints are very believable.

Since Elon Musk purchased Twitter for $44 billion in 2022, according to Business Insider, and renamed it X, racism has thrived on the social media platform.

X’s 2023 policy on “hateful conduct” is clear on the issue, according to Business Insider. But anyone who has spent significant time on the social media platform knows it is inundated with racist imbeciles and bot accounts.

A 2025 study published in the open-access journal PLOS One confirmed an increase in hate speech once Musk bought the platform, with the weekly rate of hate speech being approximately 50% higher.

In addition to hate speech, Musk’s arrival also brought a bunch of “inauthentic accounts” or “bots” that engage with the hate speech and boost their visibility.

Now, the general public is being exposed to the same swastikas, nooses, and racial epithets to which Fremont workers say they were subjected.

And even as the EEOC appears ready to sweep this Tesla case under the rug, one could argue that Elon Musk’s true feelings about racial discrimination are on display every day on the social media platform formerly known as Twitter.