Twitter owner Elon Musk’s electric car maker Tesla, one of the largest employers in Silicon Valley, has been sued by the federal government for discrimination and racial harassment against Black employees and for retaliating against those who complained about their treatment.

The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against an employee because of the person’s race. Established by the Civil Rights Act of 1964, the EEOC usually files a lawsuit when it is unable to resolve civil rights violations through a process called conciliation.

“Since at least 2015 to the present, Black employees at Tesla’s Fremont, California manufacturing facilities have routinely endured racial abuse, pervasive stereotyping, and hostility as well as epithets such as variations of the N-word, ‘monkey’, ‘boy’, and ‘black b*tch’,” the EEOC said in a statement.

The lawsuit, filed in the U.S. District Court for the Northern District of California in San Francisco, is seeking unspecified damages and reinstatement of Tesla employees who were unfairly fired in a hostile work environment.

Musk has a real-time net worth of $252.6 billion, making him the richest man in the world, according to Forbes.

“Major institutional investors like pension funds will be very concerned about this type of behavior,” said Stephen Diamond, a law professor at Santa Clara University who has advised investors on social responsibility at Tesla. “If the federal government gets involved, it certainly adds credibility to the claims.”

Musk moved Tesla’s corporate headquarters from California to Austin, Texas, in December 2021 but is still the third-largest employer in Silicon Valley, Bizjournals reported.

In 2022, the California Civil Rights Department filed a similar complaint alleging that Black employees were subject to rampant racism as far back as 2012.

In 2021, former elevator operator Owen Diaz was awarded $137 million in a racial discrimination jury trial against Tesla. The amount was later reduced to $3 million.

Tesla unsuccessfully engaged in a mandatory conciliation process with the EEOC, leading to Thursday’s lawsuit.

The EEOC lawsuit alleges that “the racial misconduct was frequent, ongoing, inappropriate, unwelcome and occurred across all shifts, departments, and positions.”

Tesla is accused of denying training and promotions to Black employees, paying Black employees less than white counterparts, and of managers witnessing harassment or discrimination who “failed or refused to intercede.”

Black employees reported slurs, misconduct, insults and graffiti to Tesla’s human resources, employee relations, and managerial personnel, the lawsuit claims. Tesla refused to address the behavior and allegedly fired Black employees within weeks of them reporting or opposing racial harassment.

“After I voiced my unhappiness (about the harassment), I started getting written up for every little thing that was acceptable before like listening to music while working,” one Black worker reported.

Nancy Sienko, the EEOC’s San Francisco district office director, said, “When you let a standard slip, you’ve set a new standard. Determining that prolific racial slurs do not merit serious discipline and failing to correct harassing conduct sends an entirely wrong message to employees. It also violates an employer’s legal responsibility to act swiftly and effectively to stop race-based harassment.”

Tesla dissolved its press department in 2020 and could not be reached for comment, Techcrunch reported.

Charlotte Burrows, chairwoman of the five-member EEOC commission, filed an internal complaint against Tesla after the agency began an investigation.

The lawsuit seeks punitive and compensatory damages for an unspecified number of Black workers and an order requiring Tesla to overhaul its policies prohibiting discrimination and retaliation. Tesla also faces a class-action lawsuit in California state court over the alleged mistreatment of about 240 Black factory workers, The Guardian reported.