Home » Elon Musk's Tesla may be forced to release diversity data after racial harassment lawsuit

Elon Musk's Tesla may be forced to release diversity data after racial harassment lawsuit

by Lester Blair
Elon Musk's Tesla may be forced to release diversity data after racial harassment lawsuit
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Tesla may have to release detailed data about the demographics of its workforce after a shareholder resolution appeared to have won the support of investors at the electric car manufacturer’s annual meeting Thursday.

The resolution from Calvert Research & Management came up for a vote days after a court ruled that Tesla must pay $137 million in damages in a racial harassment lawsuit brought by a Black former elevator operator at the company’s factory in Fremont, California.

Increasingly investors who view the diversity of workforces as a key contributor to long-term success are pressuring major corporations to be more transparent.

John Wilson, director of corporate engagement with Calvert Research & Management, told USA TODAY that the groundswell of support from Tesla investors shows the pressure campaigns are working.

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Following the national unrest following George Floyd’s murder, the firm made an even greater commitment to racial diversification.

This isn’t a fringe topic. It’s mainstream,” Wilson said. It is a common belief that we, like many others, can identify the companies that will be successful over time in the market. It’s not just about social justice or something like that. It’s really about making the right investment decision.”

Tesla, which said it would announce the results of shareholder resolutions within four business days, opposed the shareholder resolution, saying the company already produces a diversity report that outlines its programs and goals.

Shareholders were told by Tesla and the board that they are proud of the progress made.

Tesla previously disclosed that its U.S. workforce is diverse but 83% of those in company leadership roles are men and 59% are white. Tesla also said that 79% of the workforce, 75% of new hires and 77% of promotions in 2020 were men. 

Black and African American employees comprised 10% of the workforce but 4% of leadership, 12% of new hires and 10% of promotions in 2020. Hispanic and Latino employees were 22% of the workforce, 4% of leadership, 27% of new hires and 24% of promotions.

Tesla CEO Elon Musk gestures as he arrives to visit the construction site near Berlin.

If the shareholder resolution wins the backing of investors, Tesla will have to produce its EEO-1 report, which breaks down the race and gender of a company’s workforce by job categories and is filed annually with the Equal Employment Opportunity Commission. Unless a company makes it public, the report will remain private.

Wilson explained that the issue was that institutional investors committed to this company need this information. He also said that he didn’t believe Tesla CEO Elon Tesla voted in support of the resolution. I am confident that what we’ve shown is that the shareholders and investors are supportive of the resolution. That’s the real message for me.”

A USA TODAY investigation that used Census Bureau data to analyze the EEO-1 reports of companies in the Standard & Poor’s 100 found that, despite corporate pledges to change after George Floyd’s murder, deep racial inequalities persist at every level of the nation’s largest and most powerful companies, creating sharply disparate outcomes for people of color, especially women of color. 

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The investigation found that black and Hispanic workers were underrepresented at the most powerful and highest paid positions, as well as the ranks of professional, like lawyers and accountants. At the lower levels of organizations, they are concentrated – and often overrepresented – in roles including administrative assistants, technicians and laborers. 

USA TODAY asked every company in the S&P 100 to disclose its EEO-1 forms. Most companies responded, with many disclosing data for the first-time.

Tesla the latest company to press for diversity data

Tesla did not respond to USA TODAY’s requests to release its EEO-1.

These data have been released to USA TODAY by even more companies, including Comcast and Walgreens Boots Alliance.

But some of the nation’s top companies are still refusing USA TODAY’s requests including Exxon Mobil and T-Mobile.

“ExxonMobil is committed to building and sustaining a diverse workforce that is broadly representative of the global population where we do business,” company spokesman Todd Spitler said in a statement. “The EEO-1 report is specific to the U.S. and represents a subset of our global population and efforts. Therefore we do not publicly disclose the report.”

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T-Mobile informed USA TODAY that they do not publish their EEO-1 reports publically. Lisa Belot, spokesperson for T-Mobile stated that detailed workforce information is included in the proxy statement as well as elsewhere. 

EEO-1 data is often not disclosed by corporations for fear of being criticized or being sued. According to them, the EEO-1 data that they release in their annual diversity report better represents the workforce than any data obtained by the federal government.

Tesla told shareholders that the resolution did not indicate how disclosing its EEO-1 data “would promote a more diverse workforce or provide investors with a better understanding of Tesla’s DEI policies and practices.”

Pressure on corporate America to make these private documents public is gaining momentum. Diversity resolutions are being pressed by investors at increasing numbers of firms, including IBM and DuPont de Nemours.

IBM told USA TODAY it would release its EEO-1 report in 2022. DuPont stated that it will publish the EEO-1 report in 2022 later this month.

“These documents provide investors with a way to have comparable, reliable data with which we can compare other companies, other peers on an apples-to-apples basis,” said Kimberly Stokes, corporate engagement strategist with Calvert Research & Management. Investors need reliable, repeatable information over many years in order to properly assess companies.

Read USA TODAY’s article on diversity in the workplace here.

Source: USAToday.com

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