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

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

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

Diaz’s lawsuit alleged that workers drew swastikas and left racist graffiti and drawings across the Tesla plant. He additionally alleged that workers 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 courtroom, Diaz testified that he suffered “sleepless nights” and weight reduction as he lost his urge for food. 

Owen Diaz labored at Tesla’s Fremont plant in 2015 and 2016,
Handout

“Some days I would just sit on my stairs and cry,” he instructed the jury, in accordance to Bloomberg.

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

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

It’s a uncommon occasion through which Tesla — the world’s most beneficial carmaker — has had to publicly defend itself in courtroom in opposition to a former employee.

A jury dominated that Diaz confronted a racist and hostile work surroundings on the Tesla Fremont Factory.
Justin Sullivan/Getty Images

The company has a popularity for utilizing obligatory arbitration to resolve worker disputes behind closed doorways.

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

The company has confronted stress from shareholder activists to restrict its use of arbitration and be extra clear about variety 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 influence fund stated in a latest shareholder proposal.

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

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 e mail to workers Monday night through which she downplayed the allegations. Tesla later pub lished 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.