Tesla, an American electric vehicle and clean energy company headquartered in Austin, agreed to enter mediation with the U.S. Equal Employment Opportunity Commission in an effort to resolve a federal lawsuit accusing the automaker of tolerating severe and widespread racial harassment at its Fremont, California, assembly plant.
The EEOC said it is working with Tesla to select a mediator, with negotiations expected to begin in March or April. Both sides will also submit a joint proposal to the court by June 17 outlining next steps if settlement talks fail.
Jacqueline Scott Corley, a US district judge in San Francisco, agreed Tuesday night to pause certain discovery deadlines so mediation can proceed without parallel litigation pressure.
Tesla and the EEOC did not comment outside normal business hours.
The agency filed suit in September 2023, alleging Tesla’s employment practices violated federal law by allowing racial harassment to persist at the Fremont facility.
The complaint described repeated use of racial slurs and displays of racist graffiti, including swastikas and nooses, some of which allegedly appeared on vehicles moving through the assembly line.
Tesla has denied the allegations, saying it was unaware of the conduct and took appropriate action when issues were raised. The company has accused the EEOC of pursuing publicity rather than substance.
The case adds to a series of legal challenges facing Tesla over treatment of workers at the Fremont plant. On Nov. 17, the company secured a procedural win when a California state judge ruled that more than 6,000 Black employees could not proceed with a class action, citing reluctance among selected witnesses to testify.
Tesla, led by Elon Musk, remains based in Austin, Texas, though Fremont continues to draw scrutiny as one of its most prominent US manufacturing sites.
