Tesla's meeting is scheduled to be held on Aug. 4.
The resolution asks Tesla to "report on the impact of the use of mandatory arbitration for resolving disputes between workers and Tesla as an employer," and also adds that Tesla should evaluate how these disputes affect Tesla's brand, employees and workplace culture, AP7 stated.
"Arbitration can cover up large issues as well as trends within a company," the Nia spokeswoman said. "By allowing court cases and trials, there is more transparency for other employees, management as well as investors — and with that transparency comes an incentive for management to shift toward a more positive and inclusive company culture where racial discrimination is not an issue to cover up."
In the shareholder proposal, Nia warned that Tesla's "valuable brand would be harmed by an association with racist, sexist, or other discriminatory behaviors."
A workplace that tolerates harassment and discrimination "invites legal, brand, financial, and human capital risk," the proposal added. "Companies may experience reduced morale, lost productivity, absenteeism, and challenges in attracting and retaining talent."
However, Tesla's board has already stated its opposition to this proposal, citing it "would not serve the best interests of Tesla or our stockholders."
Meanwhile, Tesla is facing a number of discrimination and sexual harassment lawsuits from employees. There have been "many, many complaints" made against Tesla over the years, the Nia spokeswoman added. "And yet with the use of arbitration that happens behind closed doors, none of us know the extent of the problem," she said.
The Nia spokesman also said her firm currently owns 605 shares of Tesla stock.
"We recently sold most of our holdings, taking it out of client portfolios due to the risks that we see," she added. "We held onto some shares in order to continue our advocacy on behalf of Tesla employees."
AP7 could not be reached for further details. The Stockholm-based plan had 855.5 Swedish kronor ($83) billion in assets.
Nia has $350 million in assets under management, according to the company spokeswoman.
Tesla could not be reached for comment.