Tesla ordered to pay $137M to Black former contractor for racial abuse

A San Francisco federal court ruled that Tesla must pay a former worker, Owen Diaz, around $137 million after he endured racism while working for the company.

Tesla racism lawsuit

The jury awarded more than attorneys asked for their client, including $130 million in punitive damages and $6.9 million for emotional distress, reports CNBC.

Hostile work environment

Diaz, a former contract worker who was hired at Tesla through a staffing agency in 2015, faced a hostile work environment in which, he told the court, colleagues used epithets to denigrate him and other Black workers, told him to “go back to Africa” and left racist graffiti in the restrooms and a racist drawing in his workspace.

Diaz says nothing was done to stop it

Diaz said that he complained about the discrimination to Tesla and the contracting companies Citistaff and nextSource, but that nothing was ever done to stop it.

“I’m gratified that the jury saw the truth and that they sent a message to Tesla to clean up its workplace,” Larry Organ, one of Diaz’s attorneys, told NPR.

Owen Diaz’s Lawsuit

According to Diaz’s attorneys, the case was only able to move forward because their client had not signed one of Tesla’s mandatory arbitration agreements.

Tesla uses mandatory arbitration to compel employees to resolve disputes behind closed doors rather than in a public trial.

Arbitration agreements and settlements

In a recent arbitration agreement, Tesla was required to pay $1 million to another former worker, Melvin Berry, who also endured a racist, hostile workplace at Tesla.

A pending class-action lawsuit in Alameda County in California — Vaughn v. Tesla Inc. — also alleges that Tesla is rife with racist discrimination and harassment.

Tesla says its workplace culture has “come a long way”

Valerie Capers Workman, Tesla’s vice president of people, said in a statement on the automaker’s website that witnesses at trial corroborated the fact that people used the N-word on the factory floor, but that those witnesses also said the word was often used in a “friendly” manner. Workman also stated that Tesla followed up on Diaz’s complaints, and that the staffing agencies fired two contractors and suspended another.

“While we strongly believe that these facts don’t justify the verdict reached by the jury in San Francisco, we do recognize that in 2015 and 2016, we were not perfect. We’re still not perfect. But we have come a long way from 5 years ago,” Workman said.