Tesla agrees to mediation that could resolve US agency's racism lawsuit

Tesla TSLA.O agreed to enter mediation that could resolve the U.S. Equal Employment Opportunity Commission's lawsuit accusing Elon Musk's electric car maker of tolerating severe and widespread harassment of Black employees at its Fremont, California, assembly plant.

The EEOC said it is working with Tesla to choose a mediator, and negotiations could begin in March or April. It also said both sides will make a proposal to the presiding judge by June 17 on what to do if settlement discussions and mediation are unsuccessful.

U.S. District Judge Jacqueline Scott Corley in San Francisco agreed on Tuesday night to put some evidence-gathering deadlines on hold so mediation could take priority.

Tesla and the EEOC did not immediately respond to requests for comment outside business hours.

The agency sued Tesla in September 2023 during the Biden administration, saying the company's employment practices violated federal law.

It alleged that harassment at the Fremont plant included racial slurs, and displays of racist graffiti such as swastikas and nooses. Some of the graffiti appeared on vehicles rolling off the assembly line, it said.

Tesla has denied that it knew about the harassment and did nothing about it, and accused the agency of "headline-chasing."

The Austin, Texas-based automaker has faced several lawsuits over the alleged mistreatment of workers at the Fremont plant.

It won a legal victory on November 17 when a California state judge said more than 6,000 Black workers at the plant could not sue Tesla as a group in a class action, because many workers chosen to testify were unwilling to do so.

-Jonathan Stempel/Reuters