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The Street
The Street
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Tony Owusu

Tesla Goes on Offensive in California Race Discrimination Suit

Maybe this is a sign Elon Musk should turn his attention back to Tesla (TSLA).

Musk has been in the news constantly over the past couple of weeks after he began an official involvement with Twitter (TWTR).

Shortly after recently disclosing that he became the social media platform's largest shareholder with a 9.2% stake, Musk dropped a bombshell when he offered to buy the company outright for $42 billion. 

After steadily falling for the past 14 months, Twitter's stock broke out of its downturn on the news. 

Even after the company said that it would adopt a "poison pill" to head off any potential hostile takeover bid from Musk, Twitter shares are still on the uptick. As are Tesla's shares. 

After reporting nearly 1 million deliveries in 2022, Tesla the business is on sure footing, and the stock is basically on autopilot. 

With his most important responsibility, and biggest source of wealth, doing well, it seems Musk has time to troll Twitter's board. 

But while the business is doing well, Tesla has other problems that are coming to light, and Musk's attention may be forced to go back to his main concern. 

Tesla Says Factory Racism Suit Is 'Abuse of Power'

The state of California has an ongoing lawsuit against Tesla, accusing the electric vehicle maker of ignoring "rampant racism" at its factory in the state.

According to Bloomberg, on Monday Tesla made a filing asking a judge to suspend a lawsuit filed by the California Department of Fair Employment and Housing (DFEH) in February, accusing the company of racial discrimination at its facilities. 

Tesla notes in the filing that the the U.S. Equal Employment Opportunity Commission already has an ongoing investigation into the company, a new piece of information that wasn't publicly known prior. 

While saying that a federal agency is already investigating the company for racism is an interesting defense for a company saying that it does not have racist hiring practices, the company's overall point is that the DFEH is simply piling onto its troubles. 

Tesla says the DFEH is exceeding its legal authority and is using the litigation "as a bullying tactic and to advance its turf war" with the EEOC. 

The DFEH has filed high-profile complaints against major companies like Walt Disney (DIS), Cisco Systems (CSCO) and Riot Games in recent years. 

But the state agency has been at odds with the federal EEOC over the latter's handling of the accusations of sexism and sexual harassment against video game maker Activision Blizzard (ATVI).

While Tesla's accusation that a "turf war" is behind the DFEH's ongoing lawsuit, the company can't ignore the multiple lawsuits it has faced over racism at its factories. 

Does Tesla Have a Racism Problem?

The DFEH's suit alleges that the agency has received "hundreds of complaints from workers." 

"[Tesla's Fremont factory] is a segregated workplace where black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay and promotion creating a hostile work environment," agency director Kevin Kish said, according to the Wall Street Journal

Late last year, Tesla was ordered to pay a black former contractor $137 million after he accused the company of ignoring discrimination and racial abuse at Fremont. 

In his court testimony, Owen Diaz said that a Tesla supervisor called him the N-word more than 30 times, NPR reported

Last week, a federal judge slashed Owen Diaz's judgement to $15 million

In January, the company lost one of its highest ranking Black executive, Valerie Capers Workman, after she stepped down as head of human resources. 

But there is no denying that it has a problems related to how their employees feel about its workplace that Musk needs to get a handle on

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