A federal judge in San Francisco has ruled that a lawsuit alleging Tesla discriminates against U.S. citizens by preferring foreign visa holders in hiring may proceed, while also indicating doubt that the plaintiff will ultimately prevail.
In a concise order issued late Monday, U.S. District Judge Vince Chhabria said the lead plaintiff, Scott Taub, presented "just enough facts" about Tesla's hiring practices to allow his proposed class action to continue. Taub originally filed the complaint in September.
Taub contends that Tesla passed him over for an engineering position as part of what he describes as a "systematic preference" for hiring workers with H-1B visas, a practice he argues violates federal civil rights law. He also alleges that layoffs at Tesla have disproportionately affected U.S. citizens.
The judge noted one specific allegation that supported Taub's claims: that a recruiter working for a staffing firm told him the engineering role he sought was "H1B only," a reference to H-1B visas used to authorize employment for certain foreign-educated workers commonly utilized in the technology sector. Chhabria concluded that this allegation, combined with other assertions in Taub's filing, sufficed to survive Tesla's motion to dismiss.
However, Chhabria was careful to observe that Taub's evidence remains limited. The judge pointed to 2024 hiring figures cited in the complaint, which show Tesla employed a substantial number of H-1B visa holders that year. On their own, those statistics demonstrate a high level of visa-holder hiring, but the judge wrote that they do not prove Tesla preferred H-1B holders over U.S. citizens.
Chhabria said this shortfall in the factual record left the court "somewhat skeptical" of Taub's discrimination allegations.
The judge reached a different result for a second plaintiff, Sofia Brander, an HR specialist who had alleged Tesla favored foreign workers in human resources hiring. Chhabria dismissed Brander's claim as implausible, finding it unlikely that Tesla would prefer foreign applicants for HR positions. He granted her two weeks to file an amended complaint that further details her allegations.
Tesla has denied the lawsuit's accusations in court filings, calling them "preposterous." The company and counsel for the plaintiffs did not immediately respond to requests for comment following the order.
The complaint also references a recent federal policy change affecting H-1B visas, noting that President Donald Trump has imposed a $100,000 fee on new H-1B visas. The fee, described in the complaint as an unprecedented step intended by the administration to deter program abuse and protect American workers, is the subject of at least three separate legal challenges.
According to allegations in the lawsuit, Tesla relied heavily on H-1B visa holders in 2024, hiring an estimated 1,355 visa holders the same year it laid off more than 6,000 domestic employees, the complaint says. It asserts the vast majority of those laid-off workers were believed to be U.S. citizens.
Beyond the recruiter comment and the 2024 hiring figures, the judge wrote, Taub has offered limited additional evidence of discrimination. Chhabria’s order leaves the core of Taub’s lawsuit intact while signaling that further factual development will be necessary if the case is to succeed.
Key points
- Judge Vince Chhabria allowed most of Scott Taub's claims against Tesla to proceed, finding minimal factual support sufficient to avoid dismissal.
- A recruiter's alleged comment that a job was "H1B only" forms a central factual allegation supporting Taub's claim that Tesla prefers visa holders for engineering roles.
- The court dismissed an HR-related claim by Sofia Brander as implausible but gave her two weeks to amend; the litigation touches employment practices and could affect labor and technology sectors.
Risks and uncertainties
- Judicial skepticism: The judge expressed doubt that the lead plaintiff will ultimately prevail, indicating uncertainty about the lawsuit's outcome - potential impact on automotive, technology hiring practices.
- Limited evidence: Aside from the recruiter's statement and 2024 hiring data, the complaint contains scant additional proof of discriminatory intent, leaving the factual record incomplete - potential impact on litigation-related market perception.
- Policy and litigation environment: The complaint references a $100,000 fee on new H-1B visas imposed by the President and notes ongoing legal challenges to that policy, creating uncertainty for employers relying on visa programs - potential impact on tech and manufacturing labor sourcing.