Tesla faces fraud suit

Tesla faces fraud suit

Tesla California Fremont Factory USA

Tesla (NASDAQ:TSLA) is facing a new proposed class action lawsuit accusing the electric carmaker of a slew of wage law violations against factory and warehouse workers in California, as the company is already facing allegations of workplace bias and union busting.

Two former employees at Tesla’s Fremont, California, assembly plant filed the lawsuit in a Sacramento federal court on Thursday seeking more than $5 million in damages on behalf of thousands of Tesla workers across the state.



They claim Tesla violated various California labor laws by failing to pay overtime and provide meal and rest breaks, not providing paid sick leave or reimbursing employees for work-related expenses, and failing to provide written descriptions of quotas that workers were required to meet.

Tesla did not respond to a request for comment on the accusations.

The lawsuit comes as Tesla is trying to fend off claims in multiple lawsuits that it tolerated rampant race discrimination and harassment of Black workers at the Fremont plant and other California facilities. The company has denied wrongdoing.

Last week, a federal judge declined to dismiss a case by the U.S. Equal Employment Opportunity Commission, which enforces federal anti-discrimination laws. Tesla is also being sued by a California civil rights agency and a class of 6,000 workers, and recently settled a lawsuit by a Black former factory worker on undisclosed terms after a jury awarded him $3.2 million.



Tesla is also facing claims that CEO Elon Musk violated workers’ labor rights by suggesting in a 2018 tweet that employees would lose stock options if they unionized, and that the company illegally interfered with a union drive at a New York facility. Tesla has denied wrongdoing in the New York case, and has said Musk in his tweet was merely pointing out that most unionized workers do not receive stock options.

In a separate case in November, a U.S. appeals court said Tesla did not violate federal labor law by barring factory workers from wearing T-shirts supporting a union campaign.

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