Tesla investor sues Musk, board over 'toxic workplace culture'

A Tesla shareholder sued the electric car maker, CEO Elon Musk and its board, accusing them of neglecting to tackle complaints about workplace discrimination and harassment, and engendering a “toxic workplace culture.”

Thursday’s lawsuit is the latest against Tesla, which has been accused of racial discrimination and sexual harassment in its factories. The state of California also filed suit earlier this year.

“Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees,” the investor, Solomon Chau, said.

“This toxic work environment has gestated internally for years, and only recently has the truth about Tesla’s culture emerged,” he added in the complaint.

“Tesla’s toxic workplace culture has caused financial harm and irreparable damage to the company’s reputation.”

Tesla did not immediately respond to an email seeking comment outside regular U.S. business hours.

Kendall Law Group, the lawyers representing Chau, were not available outside regular U.S. business hours.

Tesla has said it does not tolerate discrimination and has taken steps to tackle workers’ complaints.

The lawsuit accuses the defendants — Musk, 11 Tesla board members and the company — of having breached their fiduciary duty by failing to address and remedy the red flags concerning internal reports of discrimination and harassment.

This caused Tesla to lose high-quality employees and incur costs for defending cases and settling fines for violations, the lawsuit said.

The case is Chau et al v. Musk et al, US District Court, Western District of Texas (Austin), 1:22-cv-00592.

Reporting by Sayantani Ghosh and Kevin Krolicki in Singapore and Abinaya V in Bengaluru; Editing by Kim Coghill