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Tesla shareholder sues Musk over racism, sexual harassment complaints

Elon Musk sells $7bn Telsa shares amid Twitter buyout fray
Tesla CEO, Elon Musk

A Tesla shareholder has filed legal proceedings against Elon Musk and the company’s board of directors, accusing them of ignoring employee complaints of racism and sexual harassment.

The lawsuit — brought forward Thursday by plaintiff Solomon Chau in Texas where Tesla is headquartered — argues that an unaddressed “toxic workplace culture” at the company has caused “irreparable” reputational damage and financial harm.

The action was the latest against Tesla, which has been hit by a spate of sexual harassment lawsuits and Black employees complaining of rampant racism.

In February, the state of California sued Tesla over alleged discrimination and harassment against Black employees at its Fremont plant near San Francisco, saying in a complaint that the company had created a “racially segregated workplace.”

Thursday’s court filing stated that a “toxic environment took shape internally for years and the truth about Tesla’s culture has only recently emerged, leading to actions by both regulators and private individuals.”

The lawsuit asserts that Musk, who is Tesla’s executive director, and its 11 board members ignored several “red flags”, which resulted in the departure of numerous highly qualified employees and set off a series of costly legal proceedings.

“These wrongs resulted in significant damages to Tesla’s reputation, goodwill, and standing in the business community”, the lawsuit states, and “exposed Tesla to hundreds of millions of dollars in potential liability for violations of state and federal law.”

In another lawsuit last year, Tesla was ordered to pay $137 million plus interest to a former elevator operator at its Fremont factory for turning a blind eye to racism. Earlier this year, the penalty was reduced to $15 million.

Other legal proceedings, in particular from Black women employees who claim to have been victims of racial slurs and inappropriate sexual remarks by colleagues or superiors, are underway.

Tesla, which has barely responded to requests from journalists since late 2020, did not respond to a request from AFP.

Musk was also sued on Thursday by an investor in dogecoin, who says he lost money after investing in the cryptocurrency, and described himself as an “American citizen who was defrauded” by what he called a “Dogecoin Crypto Pyramid Scheme.”

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