Judge rejects Tesla's challenge to Calif. agency in race bias lawsuit

By Daniel Wiessner

(Reuters) - Tesla Inc has suffered another setback in its bid to challenge the powers of California's Civil Rights Department, which is suing the electric carmaker over alleged race discrimination at its flagship assembly plant.

A judge in Oakland, California, in a tentative ruling late Tuesday dismissed Tesla's counter-suit claiming the agency did not notify the company of the bias allegations or give it a chance to settle before suing it last February.

California Superior Court Judge Evelio Grillo gave Tesla until Feb. 3 to file an amended complaint fleshing out its claim that the agency has adopted "underground regulations" to flout the requirements it must meet before filing lawsuits.

A hearing is scheduled for Wednesday morning.

A Tesla representative and the agency did not immediately respond to requests for comment.

The agency argues that Tesla's Fremont, California, plant is a racially segregated workplace where Black employees have been harassed and discriminated against over job assignments, discipline and pay.

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

Grillo in August denied Tesla's motion to dismiss the case, saying its attack on the agency's practices was not a defense against the discrimination claims. Tesla filed the counter-suit in September.

Also in August, a different state administrative agency declined to review a Tesla complaint arguing that the Civil Rights Department was suing businesses without conducting thorough investigations.

Several lawsuits are pending in California courts that accuse Tesla of tolerating discrimination and sexual harassment at its factories.

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

(Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Kevin Liffey)