SAN FRANCISCO: Tesla Inc (TSLA.O), the electric vehicle company led by Elon Musk, has been hit with a proposed class action lawsuit accusing it of systematically preferring visa holders over U.S. citizens when making hiring and firing decisions, allegedly to reduce labour costs.
Filed in San Francisco federal court, the complaint argues that Tesla’s hiring practices violate federal civil rights law, claiming the company disproportionately fires U.S. citizens while hiring foreign workers on H-1B visas.
Hiring patterns questioned
According to the lawsuit, Tesla hired an estimated 1,355 visa holders in 2024 while laying off more than 6,000 workers domestically, “the vast majority” believed to be U.S. citizens.
The complaint also cited individual cases:
- Scott Taub, a software engineer, said he was told one job was for “H1B only” and later not invited to interview for another role.
- Sofia Brander, a human resources specialist and former Tesla contractor, said she was denied interviews for two jobs despite her prior experience.
Both plaintiffs said Tesla’s refusal to consider them after learning they did not require sponsorship was evidence of bias.
“While visa workers make up just a fraction of the United States labor market, Tesla prefers to hire these candidates over U.S. citizens, as it can pay visa-dependent employees less than American employees performing the same work, a practice in the industry known as ‘wage theft,’” the complaint alleged.
Musk’s stance on H-1B visas
The filing pointed to a Dec 27, 2024 post on X (formerly Twitter) where Musk, himself a naturalised U.S. citizen born in South Africa, defended the visa programme.
“The reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H1B,” Musk wrote.
Legal outlook
It remains unclear how plaintiffs will establish evidence of systemic discrimination. Their lawyer, Daniel Kotchen, declined further comment.
Tesla, based in Austin, Texas, has not responded to requests for comment.
The lawsuit seeks damages on behalf of all U.S. citizens who either applied for Tesla jobs and were not hired, or who were employed and subsequently fired.
The case is filed as Taub et al v Tesla Inc, U.S. District Court, Northern District of California, No. 25-07785.
Source: Reuters
