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Tesla mired in slew of harassment allegations

Electric car maker at centre of claims of racist behaviour and misconduct

FILE PHOTO: A Tesla charging station is seen in Salt Lake City, Utah, U.S. on September 28, 2017. REUTERS/Lucy Nicholson/File Photo
FILE PHOTO: A Tesla charging station is seen in Salt Lake City, Utah, U.S. on September 28, 2017. REUTERS/Lucy Nicholson/File Photo

Tesla’s production floor is a "hotbed for racist behaviour," an African-American employee claimed in a lawsuit in which he alleged black workers at the electric car maker suffer severe and pervasive harassment.

The employee says he is one of more than 100 African-American Tesla workers affected and is seeking permission from a judge to sue on behalf of the group. He is seeking unspecified general and punitive monetary damages as well as an order for Tesla to implement policies to prevent and correct harassment.

"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," the employee said in the complaint filed in California’s Alameda County Superior Court.

Tesla has about 33,000 employees globally but has never publicly released its diversity statistics. More than 10,000 people work at its sole auto-assembly plant in Fremont, California, where the United Auto Workers have launched a campaign to persuade workers to join the union. On Tesla’s most recent earnings call, the chief executive Elon Musk acknowledged that the company recently fired about 700 workers for low performance.

The lawsuit was filed on behalf of Marcus Vaughn, who worked in the Fremont factory from April 23 to October 31. Mr Vaughn alleged that employees and supervisors regularly used the “N word” around him and other black colleagues. Mr Vaughn said he complained in writing to human resources and Mr Musk and was terminated in late October for "not having a positive attitude".

Tesla did not have an immediate comment on the lawsuit.

Larry Organ, an attorney at the California Civil Rights Law Group, said Mr Vaughn reached out to him after the law firm sued Tesla on behalf of other African American employees who complained about racial harassment this year.

A Tesla assembly line worker sued in March, claiming the company did little to stop co-workers from harassing him. In August, a judge sent the case to arbitration. A judge also partly granted Tesla’s request to compel arbitration in a case of a woman who sued in November 2016 complaining about pervasive harassment.

According to Monday’s complaint, Mr Musk sent an email to Tesla factory 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,” Mr Musk wrote in the email. “Sometimes these things happen unintentionally, in which case you should apologise. In fairness, if someone is a jerk to you, but sincerely apologises, it is important to be thick-skinned and accept that apology.”


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“The law doesn’t require you to have a thick skin,” Mr Organ said on Monday. "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."

The case comes as Steve Jurvetson resigned from his venture capital firm DFJ and took a leave of absence from the boards of Tesla and Space Exploration Technologies after claims of misconduct against him. He denied the allegations.

Mr Jurvetson, who is known for backing Mr Musk’s companies, said he is leaving his VC firm “to focus on personal matters, including taking legal action against those whose false statements have defamed me”.

DFJ said last month that it had hired a law firm to investigate Mr Jurvetson after hearing indirect allegations about potential misconduct. On Monday, Mr Jurvetson resigned from DFJ “by mutual agreement”, said Carol Wentworth, a spokeswoman for the firm. “DFJ’s culture has been, and will continue to be, built on the values of respect and integrity in all of our interactions,” she wrote in an email.

Besides Mr Jurvetson’s close relationship with Mr Musk, he made an early and successful bet on Hotmail before Microsoft acquired it. Mr Jurvetson has maintained a high profile in recent weeks. In October, he hosted a fireside chat with Gwynne Shotwell, SpaceX’s president and a fellow board member, on the campus of Stanford University. Last week, he spoke at a New Space Age conference at Seattle’s Museum of Flight. He has continued to post photographs of his travels and speaking engagements on his Flickr page.

Several other Silicon Valley venture capitalists and prominent business figures, such as Dave McClure from 500 Startups, Justin Caldbeck from Binary Capital and Mike Cagney from SoFi, have resigned in recent months after being accused of sexual harassment and other abusive behaviour in the workplace. McClure and Mr Caldbeck apologised; Mr Cagney denied allegations.

Last month, a Los Angeles-based entrepreneur, Keri Kukral, wrote in a Facebook post: “Women approached by founding partners of Draper Fisher Jurvetson should be careful. Predatory behaviour is rampant.”

The uncertainty on Tesla’s board comes at a critical time for the car maker. The company is struggling with early production of the Model 3, a more affordable and hotly anticipated electric saloon. After a couple of delays, Tesla plans to unveil a fully electric big rig at a late-night event on Thursday in Hawthorne, California. Meanwhile, the closely held SpaceX has its 17th launch of the year slated for Wednesday from Florida.

In addition to Mr Musk’s companies, Mr Jurvetson sits on the boards of D-Wave Systems, Memphis Meats, Mythic, Planet Labs and Synthetic Genomics.

Updated: November 14, 2017 02:23 PM