Court: Tesla's racial discrimination suit can head to court

Tesla faces employee discrimination claims at Fremont factory

Big changes could be coming to the Tesla plant in Fremont after accusations of discrimination. A state appeals court ruled the company acknowledge a climate of discrimination and take actions to end it.

FREMONT, Calif. - Minority employees are one step closer to heading to trial in the hopes of getting Tesla to acknowledge and end discrimination at their Fremont plant.

On Wednesday, the First District Court of Appeal in San Francisco allowed two employees to proceed with class claims rather than submit to arbitration regarding how they were treated while working as contractors at Tesla in 2016 and 2017 before being hired as employees.

The court also determined that the employees could pursue a public injunction, an order which, if granted, would compel Tesla to alter its procedures for all employees, not just the two plaintiffs.

The Court of Appeal’s rejection of Tesla’s arguments was the second time the justices have the Alameda County Superior Court’s decisions rejecting the company’s arbitration ploys.

The first Court of Appeal decision in 2019 rejected Tesla’s claim that the original named plaintiff, Marcus Vaughn, could be forced into arbitration even though he never signed an arbitration agreement.

Wednesday's decision agreed with the Superior Court that two of the plaintiffs, Monica Chatman and Evie Hall, only agreed to arbitrate claims arising after they became direct Tesla hires, and not race harassment claims relating to their employment at the Tesla factory through staffing agencies before that time.

The class action suit alleged racial discrimination stems back to 2017, where African-American workers were routinely called the N-word and other slurs, and experienced graffiti including Nazi swastikas.

"Tesla for years has sought to avoid responsibility for the egregious, widespread, disgusting racism at its Fremont factory through one sideshow after the next," 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. "Today’s decision means that it is time for Tesla to face the music."

ALSO: Tesla calls racial discrimination lawsuit by State of California 'misguided'