TESLA TACTIC TO STALL PROSECUTION OF RACE DISCRIMINATION, HARASSMENT CLAIMS FAILS AT THE CALIFORNIA SUPREME COURT

TESLA TACTIC TO STALL PROSECUTION OF RACE DISCRIMINATION, HARASSMENT CLAIMS FAILS AT THE CALIFORNIA SUPREME COURT

For Immediate Release: April 12, 2023

Bryan Schwartz, Esq. (510) 444-9300

Larry Organ, Esq. (510) 453-4740

Michael Rubin, Esq. (415) 421-7151

OAKLAND, CA – Today, the California Supreme Court rejected Tesla’s most recent effort to avoid facing a class action that exposes the rampant race discrimination and harassment that Black workers face every day at Tesla’s Fremont plant.  Earlier this year, Tesla asked the Supreme Court to review a decision from the Court of Appeal for the First District, after that court strongly rebuked Tesla’s latest attempt to use arbitration to avoid litigating the merits of the class action.  The Supreme Court refused to review the Court of Appeal’s decision, which means that the Plaintiffs can finally proceed with their suit, instead of endlessly fighting off Tesla’s baseless efforts to force them into arbitration.

As the Plaintiffs allege, Tesla’s purported commitment to idealistic progress is in stark contrast to the reality that thousands of its workers encounter when they arrive at the Fremont factory each day.  Black workers’ supervisors and co-workers call them the N-word and other racial slurs with impunity.  Black workers use bathrooms where they see graffiti featuring racist images and Nazi swastikas.  Black workers are placed in the factory’s most difficult roles, without receiving the bonuses and opportunities for advancement that their non-Black peers enjoy.  The reality is that, at the futuristic Tesla factory in Northern California, Black workers experience ongoing pre-Civil Rights Era-style race discrimination and harassment.

Tesla has repeatedly tried to avoid accountability by forcing the class’s claims into arbitration. The Supreme Court’s refusal to disturb the Court of Appeal decision is further confirmation that arbitration is a matter of consent, not coercion, and that Tesla cannot compel to arbitration individuals who did not agree to arbitration, or claims that are not included in arbitration agreements. Further, the Court of Appeal’s published opinion stands as authority for the rule that the Fair Employment and Housing Act (FEHA) can be the basis of public injunction claims. Public injunctions are a substantive right which cannot be waived by an arbitration agreement.

“The Supreme Court’s denial of Tesla’s latest attempt to stall the prosecution against the company for its despicable race discrimination and harassment against Black workers has—once again—failed,” said Bryan Schwartz, one of the co-lead counsel for the Plaintiffs in the class action, along with Larry Organ of California Civil Rights Law Group.  “We are excited to finally certify our class on behalf of, we believe, thousands of Black workers and move forward without further delay. The Supreme Court’s refusal to disturb the important Court of Appeal decision is especially important because it confirms that workers can seek a public injunction under the Fair Employment and Housing Act, a right which cannot be stripped by an individual arbitration agreement.”

Michael Rubin, of Altshuler Berzon, who argued against Tesla’s appeal on the workers’ behalf, also observed that the Supreme Court’s denial of review has significant impacts for workers because the published opinion “establishes for the first time that plaintiffs may seek a ‘public injunction’ under FEHA. Previously, public injunctive relief had been limited to UCL or False Advertising Act types of claims. Under the California Supreme Court’s McGill decision and the U.S. Supreme Court’s Viking River Cruises decision, arbitration agreements cannot be used to strip employees of substantive statutory rights. An employee’s right to seek a public injunction under FEHA is now enshrined as one such substantive statutory right. As a result, today’s ruling means that, going forward, employers will either have to agree that their employees complaining about workplace discrimination are entitled to seek sweeping public injunctive relief in arbitration or, if they do not agree (perhaps because they do not trust their own designated arbitrators or the arbitral process when such important rights are at stake), they must allow the plaintiffs to pursue that public injunctive relief in court, as will happen now in Vaughn.”

The lawsuit is Alameda County Superior Court Docket No. RG17882082.

The Court of Appeal opinion is reported at 87 Cal.App.5th 208.

About the Plaintiff Marcus Vaughn

Plaintiff Marcus Vaughn began working at the Tesla Factory on April 23, 2017 as a General Assembly Associate. Shortly thereafter, employees and supervisors began targeting him for harassment on the basis of his race, including referring to him with the “N-word” on a regular basis. On July 21, 2017, Mr. Vaughn complained in writing to Human Resources and Elon Musk about the hostile work environment. Tesla did not conduct an investigation into Mr. Vaughn’s complaint, nor was he interviewed about his serious allegations of racism at the Tesla Factory. Instead, Tesla terminated Mr. Vaughn on October 31, 2017 for “not having a positive attitude.”

About Bryan Schwartz Law, P.C.

Bryan Schwartz Law, P.C. is dedicated to continuing the struggle for civil rights and equality of employment opportunity and helping Americans from every background to achieve their highest career potential. The firm has recovered tens of millions of dollars for tens of thousands of workers in individual, class, and collective actions involving discrimination and retaliation, harassment, denied disability accommodations, whistleblower reprisal, wage and hour violations, Federal employees’ rights, and severance negotiations.

About California Civil Rights Law Group

The California Civil Rights Law Group, led by prominent trial attorney Larry Organ, is dedicated to furthering the cause of employee civil rights throughout the state. Larry’s firm previously won the landmark $136.9 million race harassment jury verdict against Tesla in Diaz v. Tesla. The legal team has made it its priority to provide help to those who need it the most, and specializes in representing plaintiffs in matters involving race, sex and disability harassment, discrimination, retaliation and wrongful termination.

About Altshuler Berzon LLP

Altshuler Berzon LLP is a San Francisco law firm dedicated to providing the highest quality representation in the service of economic justice and the public interest. The firm’s attorneys represent clients including labor unions, workers, consumers, environmental groups, other public interest organizations, and public entities. Altshuler Berzon specializes in labor and employment, constitutional, environmental, civil rights, class action, campaign and election, and impact litigation, at both the trial and appellate levels. The firm represents clients before state and federal courts, administrative agencies, and arbitrators; and provides advice and counseling, legislative drafting, representation in collective bargaining and negotiation, and other forms of legal assistance.