Tesla countersues California agency behind race bias lawsuit

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By Daniel Wiessner

(Reuters) - Tesla (NASDAQ:TSLA) Inc on Thursday countersued the California agency that has accused the electric carmaker of tolerating widespread race discrimination at its flagship assembly plant.

Tesla in a complaint filed in state court in Alameda County said the California Civil Rights Department (CRD), which sued the company in February, adopted "underground regulations" allowing it to file the lawsuit without first notifying Tesla of the claims or giving the company a chance to settle.

Tesla's counter-lawsuit alleges that the CRD violated state law by not seeking public comment before adopting procedures for investigating and suing employers.

And those procedures flout requirements that the CRD disclose details of its investigations to employers and make attempts to settle claims outside of court before suing, Tesla claims.

Tesla is seeking an order barring the CRD from following its allegedly unlawful procedures in the investigation of any employer and requiring the agency to adopt new regulations through a formal rulemaking process.

Tesla had made similar claims in a bid to dismiss the California agency's lawsuit, which was denied by a state judge last month.

But the complaint filed on Thursday may allow the company's lawyers to uncover new details about the CRD's practices and its investigation of Tesla through the discovery process, which could bolster its efforts to have the case dismissed.

The CRD claims Tesla's flagship Fremont, California, plant is a racially segregated workplace where Black employees faced racist slurs and graffiti and were discriminated against in terms of job assignments, discipline and pay.

Tesla has denied wrongdoing and said the lawsuit was politically motivated.

The company in June had asked a separate California agency, the Office of Administrative Law, to investigate the CRD's alleged adoption of unlawful policies. The OAL last month declined to review Tesla's petition without explaining its decision.

Austin, Texas-based Tesla is also facing a series of race and sex discrimination cases by workers, most involving the Fremont plant.

A state judge in April cut a jury verdict for a Black worker who alleged racial harassment from $137 million to $15 million. The plaintiff rejected the reduced award and opted for a new trial, which is scheduled for March 2023.