Tesla has agreed to enter settlement discussions with a federal agency that sued the electric-vehicle maker over allegations of racial harassment at its California factory.
Court filings submitted Tuesday show that Tesla will take part in private mediation with the U.S. Equal Employment Opportunity Commission (EEOC). Both sides expect to select a mediator soon, with talks scheduled for March or April.
If the mediation does not result in an agreement, attorneys said they will submit a proposal to the court by June 17, 2026, outlining how the lawsuit should proceed.
Federal Lawsuit Alleges Longstanding Abuse
The EEOC filed suit against Tesla in 2023, alleging that Black workers at the Fremont, California, plant were subjected to ongoing racial harassment. The complaint also claims that company leaders retaliated against employees who raised concerns about the treatment.
This is not the first attempt to resolve the dispute. Tesla and the EEOC previously went through mandatory mediation in June 2023, which failed. Neither Tesla nor the EEOC commented on the latest developments.
The case is titled U.S. Equal Employment Opportunity Commission v. Tesla, No. 3:23-cv-04984, filed in federal court in Northern California.
Allegations Date Back to 2015
According to the federal complaint, problems at the Fremont plant date back to at least 2015. Non-Black workers allegedly used racial slurs, made monkey noises, and some managers reportedly addressed Black employees—individually and in groups—using racial epithets.
The lawsuit also describes racist graffiti, including nooses and swastikas, appearing on desks, inside elevators, and even on vehicles moving along the production line. The Fremont facility produces Tesla’s Model S, Model X, Model 3, and Model Y vehicles.
The EEOC is seeking a court order barring Tesla from subjecting Black workers to racism or retaliation, and from maintaining a hostile work environment. It is also seeking financial compensation for emotional distress and lost wages, either through back pay or reinstatement.
The federal lawsuit was filed in Oakland, California.
Parallel Case With California Continues
In April 2022, Tesla disclosed in regulatory filings that it was under federal investigation, before California’s civil rights agency filed a separate lawsuit accusing the company of turning a blind eye to rampant racism against Black workers at Fremont and other facilities statewide.
Tesla has argued in court that the state overstepped its authority, claiming California is using litigation as a bullying tactic in a jurisdictional dispute with the federal commission. That case, filed last year, remains ongoing.
The upcoming mediation with the EEOC marks another critical juncture in one of the most serious workplace-rights disputes Tesla has faced in recent years.
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