Tesla ordered to pay former worker $137m over workplace racism

5 Oct 2021

Image: © Björn Wylezich/Stock.adobe.com

The judge also criticised the company’s lawyers for ‘purposefully discriminatory’ conduct during jury selection for the case.

A US federal jury has ordered Tesla to pay damages of $137m to a black former worker who was subjected to racism at one of its plants.

Owen Diaz was employed as an elevator operator at the automaker’s Fremont factory on a contract basis in 2015 and 2016. The court found that Tesla failed to take reasonable steps to protect him from harassment in the workplace.

During jury selection, presiding judge William Orrick blocked an attempt by Tesla’s attorneys to exclude one juror, saying he believed the effort was “purposefully discriminatory” and based on race.

Diaz told the court that he and other black workers had racial slurs directed at them in the workplace and that he was told to “go back to Africa”, found racist graffiti in the bathrooms and had a racist drawing left in his workspace.

In a blog post, Tesla said it “strongly believe[s] these facts don’t justify the verdict reached by the jury” but recognised the company was “not perfect”. It added that it has “continued to grow and improve” in how it addresses employee concerns in the years since 2015 and 2016.

The jury ordered Tesla to pay Diaz $6.9m in compensatory damages and $130m in punitive damages, according to the Wall Street Journal.

Tesla is also facing a separate class-action lawsuit on behalf of more than 100 black workers alleging there was a racist culture and unsafe working conditions at the Fremont factory. The suit was filed in 2017 but has not yet gone to trial.

Diaz’s lawyers said that he was only able to pursue the case because he didn’t sign a mandatory arbitration contract, which most employees are required to. Such contracts compel workers to settle complaints and disputes behind closed doors and prevent them from availing of the courts.

In such cases between 2016 and early 2021, arbitrators ruled in favour of Tesla 11 out of 12 times, Al Jazeera reported. In the case that Tesla lost, it paid $1m in compensation to a former employee who said he called racial slurs at work.

An activist shareholder, Nia Impact Capital, has criticised the use of forced arbitration contracts. In a recent shareholder proposal, it said: “The use of mandatory arbitration provisions limits employees’ remedies for wrongdoing, precludes employees from suing in court when discrimination and harassment occur”.

It also said that the process “can keep underlying facts, misconduct or case outcomes secret and thereby prevent employees from learning about and acting on shared concerns”.

Last year, in its first-ever diversity report, Tesla said that black and African-American employees made up 10pc of its workforce but just 4pc of its leadership.

This is just one issue facing Tesla. The US National Highway Traffic Safety Administration announced in August it is investigating the company’s Autopilot self-driving system after reports of a number of crashes with emergency vehicles.

In July, the company was fined by the environmental ministry of Brandenburg state in Germany for illegal construction activity.

Jack Kennedy is a freelance journalist based in Dublin