Tesla ordered to pay $137M to ex-worker over racist work atmosphere


A San Francisco federal court docket ordered Tesla to pay a whopping $137 million to a former contractor who’s black after the Elon Musk-helmed carmaker allowed a racist office tradition to fester.

The ex-employee, Owen Diaz, a former contractor who was employed by a staffing company and labored at Tesla’s Fremont plant in 2015 and 2016, confronted a racist and hostile work atmosphere, a jury dominated late Monday.

Diaz’s lawsuit alleged that staff drew swastikas and left racist graffiti and drawings across the Tesla plant. He additionally alleged that staff typically used the “N-word” and different racist epithets.

“Tesla’s progressive image was a façade papering over its regressive, demeaning treatment of African-American employees,” the lawsuit stated.

In court docket, Diaz testified that he suffered “sleepless nights” and weight reduction as he misplaced his urge for food. 

Owen Diaz, a former Tesla contractor
Owen Diaz labored at Tesla’s Fremont plant in 2015 and 2016.

“Some days I would just sit on my stairs and cry,” he advised the jury, based on Bloomberg.

The jury awarded Diaz $6.9 million in damages for emotional misery and $130 million in punitive damages, based on his lawyer, Lawrence Organ of the California Civil Rights Law Group.

In court docket, Tesla’s attorneys argued that it investigated and resolved all incidents reported by Diaz and that it didn’t intend to ignore the rights and issues of black staff on the plant.

It’s a uncommon occasion during which Tesla — the world’s most beneficial carmaker — has needed to publicly defend itself in court docket in opposition to a former employee.

An aerial view of the Tesla Fremont Factory
A jury dominated that Diaz confronted a racist and hostile work atmosphere on the Tesla Fremont manufacturing facility.
Justin Sullivan/Getty Images

The firm has a repute for utilizing obligatory arbitration to resolve worker disputes behind closed doorways.

Private arbitration typically lets corporations keep away from pricey damages or decide to main corrective motion. Tesla not often takes an enormous hit in arbitration, although it did pay a $1 million award in May in a case introduced by one other ex-contractor that was much like Diaz’s.

The firm has confronted strain from shareholder activists to restrict its use of arbitration and be extra clear about range and different issues.

One shareholder activist fund, Nia Impact Capital, has voiced concern that the usage of obligatory arbitration can allow and conceal sexual harassment and racist discrimination.

“The use of mandatory arbitration provisions limits employees’ remedies for wrongdoing, precludes employees from suing in court when discrimination and harassment occur, and can keep underlying facts, misconduct or case outcomes secret and thereby prevent employees from learning about and acting on shared concerns,” the social affect fund stated in a current shareholder proposal.

Proxy advisory agency Institutional Shareholder Services has really useful shareholders vote for Nia’s proposal.

Tesla CEO Elon Musk leaves Manhattan federal court
The carmaker is famously helmed by Elon Musk.
REUTERS/Brendan McDermid/File Photo

Tesla’s vp of individuals, Valerie Capers Workman, addressed the ruling in an electronic mail to staff Monday night during which she downplayed the allegations. Tesla later printed the e-mail in a blog post after it leaked.

“In addition to Mr. Diaz, three other witnesses (all non-Tesla contract employees) testified at trial that they regularly heard racial slurs (including the n-word) on the Fremont factory floor. While they all agreed that the use of the n-word was not appropriate in the workplace, they also agreed that most of the time they thought the language was used in a ‘friendly’ manner and usually by African-American colleagues,” she wrote.