Tesla Inc: Sufficiency of Harassment and Discrimination Prevention Efforts

December 17, 2024 As You Sow

WHEREAS: Human capital management is one of the most complex and important components of any business. Employees need to be trained, motivated, and engaged to do high quality and innovative work. A 2024 meta-analysis found companies with human capital management programs that encourage inclusive and equitable workplaces experience benefits that include increased innovation, enhanced employee engagement and satisfaction, and improved decision-making.[1]

There have been serious lawsuits alleging harassment and discrimination within Tesla’s factories, including:

In 2024 nearly 6,000 Black Tesla employees were granted temporary permission to proceed with a class action suit for failing to address harassment and discrimination. Employees have alleged that complaints to the Tesla human resources department went unanswered.[2]

A U.S. Equal Employment Opportunity Commission’s lawsuit that alleges Black employees at Tesla’s Fremont, California manufacturing facilities have experienced pervasive racial discrimination was filed in September 2023.[3]

The California’s Department of Fair Employment and Housing sued Tesla after receiving hundreds of complaints that employees were subjected to racial slurs; segregated and discriminated against in job assignments, pay, and promotion; and faced retaliation when they reported their experiences.[4]

Harassment and discrimination allegations appear to be present-day, ongoing problems for Tesla. In June 2024, a new lawsuit was filed by 14 current and former Tesla workers alleging race-based harassment, discrimination, and retaliation in California.[5] Allegations have also been made of similar working conditions in the Austin Gigafactory.[6]

Serious human capital oversight concerns also exist surrounding worker safety; it has been alleged that the worker injury rate at the Austin Gigafactory is almost 5 percent.[7] In addition, a 2022 Forbes article claimed that Tesla had had more workplace safety violations and infractions over the previous three years than all other automakers in the U.S. combined.[8]

The Board appears to be providing insufficient oversight of Tesla’s workplace environment and the effectiveness of its human resources systems.

Tesla’s Compensation Committee Charter states under the heading of ‘Purpose’ that: The Committee shall assist the Board in administering and overseeing (i) the Company's compensation policies, plans and benefit programs, (ii) the compensation of the Company's executive officers and members of the Board, (iii) the administration of the Company's employee benefit plan and (iv) review of the human capital management practices related to the Company’s talent generally (including how the Company recruits, develops and retains diverse talent).[9]

How the Compensation Committee implements its fourth purpose, of human capital management review, is not further detailed in the Compensation Committee Charter.

BE IT RESOLVED: Shareholders request that the Board of Directors report to investors about how and how often the Compensation Committee reviews the Company’s human capital management practices. It is also suggested that the Board describe for investors any changes in Company policy or practice related to human capital management the Board has suggested or directed within the last five years.

[1] https://www.researchgate.net/publication/380115625_ENHANCING_ORGANIZATIONAL_PERFORMANCE_THROUG H_DIVERSITY_AND_INCLUSION_INITIATIVES_A_META-ANALYSIS

[2] https://www.hcamag.com/us/news/general/nearly-6000-black-employees-at-tesla-allowed-to-collectively-sue-for-discrimination- harassment/479491

[3] https://www.eeoc.gov/newsroom/eeoc-sues-tesla-racial-harassment-and-retaliation

[4] https://qz.com/2126548/why-is-california-suing-tesla/

[5] https://www.lawyersandsettlements.com/legal-news/california_labor_law/lawsuit-alleges-tesla-racism- rampant-in-california-factories-23941.html

[6] https://jalopnik.com/sexual-harassment-racial-discrimination-and-dangerous-1851659823

[7] https://www.theverge.com/2023/11/21/23971138/tesla-gigafactory-austin-texas-injury-reports-robot- claw-explosion

[8] https://www.forbes.com/sites/alanohnsman/2022/06/06/elon-musk-has-lots-to-say-about-workers-at- teslawhich-continues-to-lead-us-carmakers-in-safety-violations/

[9] https://digitalassets.tesla.com/tesla-contents/image/upload/IR-Compensation-Committee-Charter

Resolution Details

Company: Tesla Inc.

Lead Filers:
Nia Impact Capital, co-filed with Amalgamated Bank