California regulators sue Tesla for alleged racial discrimination

California regulators have sued Tesla for allegedly racial discrimination and harassment against workers at its San Francisco Bay-area factory, especially African Americans.

The California Department of Fair Employment filed the suit Wednesday, saying it believed it had gathered enough evidence to charge the electric car manufacturer.

“After receiving hundreds of complaints from workers, DFEH found evidence that Tesla’s Fremont factory is a racially 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,” Kevin Kish, the agency’s director, said in a written statement.

Tesla disputed the charges in a blog post, in which the company said it opposes “all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints.”

“The Fremont factory has a majority-minority workforce and provides the best paying jobs in the automotive industry to over 30,000 Californians,” Tesla also wrote, adding that legal action was “unfair and counterproductive.”

Elon Musk moved Tesla’s headquarters to Texas from California last year, but still makes most of its cars out of the Bay-area plant.

The agency said that Black workers often heard their managers at Tesla using racial slurs, were assigned more physically demanding roles, and disciplined more severely for any infractions.

Tesla has been successfully sued for discrimination by African American workers, including a contract worker who won $137 million in damage last year. The car-maker is also facing lawsuits from current and female employees alleging sexual harassment and a hostile work environment.

DFEH was also the agency investigating game company Activision Blizzard for gender discrimination and sexual harassment.

Shares in Tesla fell 3% on Thursday, closing at $904.55.