Tesla Ordered To Pay $137 Million To Former Worker
Owen Diaz, a former Tesla employee who worked as an elevator operator at the company’s Fremont factory for nine months from 2015 to 2016, was recently awarded a $137 million settlement as compensation for the racial abuse he experienced during his tenure.
He was called racial epithets by coworkers, told to “go back to Africa”, and saw racist graffiti in the bathrooms. The jury found that Tesla had not taken reasonable steps to prevent racial harassment in the workplace.
The company’s lawyers stated the factory employed approximately 10,000 workers, many of whom were contractors hired through external staffing agencies. And so, they argued, there was no evidence that Tesla employees were directly responsible for the racial harassment.
Diaz’s attorneys brought three claims against Tesla:
1. The company subjected him to a racially hostile environment.
2. The company failed to provide a harassment-free workplace.
3. Tesla was negligent in its supervision of employees.
The jury sided with the plaintiff on all claims and ordered Tesla to pay Diaz $6.9 million in compensatory damages and $130 million in punitive damages — far above what his attorneys requested.
The eight jurors deliberated for four hours before reaching a decision.
Though Tesla has a practice of mandatory arbitration, the company’s reliance on contractors opened the door for the lawsuit. Because Diaz was a contractor himself, he never signed the company’s arbitration agreement and became the first worker to file a lawsuit against Tesla that went to a jury trial.
Tesla’s “Vice President of People” Valeria Capers Workman said, “The Tesla of 2015 and 2016 (when Mr. Diaz worked in the Fremont factory) is not the same as the Tesla of today.” She added, “We acknowledge that we still have work to do to ensure that every employee feels that they can bring their whole self to work at Tesla.”
The company has not said whether it plans to appeal the verdict. Tesla is facing a similar lawsuit in California state court from Marcus Vaughn and others, who allege Tesla created a hostile workplace for Black workers.
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