Tesla tests envelope in employment and labor law

October 2022 employment law letter

Authors:

Jeff Sloan, Sloan Sakai Yeung and Wong, LLP

Tesla founder Elon Musk’s famously controversial battle with Twitter has captivated the media for months. But Tesla’s labor and employment law challenges are also emblematic of its founder’s aggressiveness and willingness to take risks. Its novel, take-no-prisoners strategy in a recent case alleging race discrimination is of interest to labor and employment law professionals. Equally pertinent is a recent decision of the Biden National Labor Relations Board (NLRB), which invalidated a key aspect of Tesla’s stringent, union-avoidance dress code.

DFEH vs. Tesla

California’s Department of Fair Employment and Housing (DFEH)—now named the California Civil Rights Department (CRD)—is the state agency charged with enforcing the Fair Employment and Housing Act (FEHA), a comprehensive statute that protects public- and private-sector workers against unlawful discrimination. The CRD investigates allegations of discriminatory employment practices. It also acts as a public prosecutor, with authority to sue employers when an investigation uncovers adequate evidence of discrimination.

The allegations

This case centered on Tesla’s production plant in Fremont, California, where over 15,000 employees work. It arose after a three-year investigation into hundreds of discrimination complaints.

Filed in February 2022, the CRD’s court complaint presents a stark overview:

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