A former contract worker sued EV maker Tesla Inc. for ignoring racist behavior by other employees targeted at him, winning and securing a $137 million verdict — a new record for this type of case in the U.S.
Owen Diaz, who was an elevator operator at the company’s Fremont, California plant, sued the company after it failed to address racial taunting and graffiti aimed at him. The suit was filed in federal court in San Francisco, according to Bloomberg.
The ruling is the second instance in which Tesla’s been forced to pay a seven-figure penalty for racially motivated harassment of employees. In August, a black former Tesla employee received a $1.02 million award from the automaker wrapping up a lengthy arbitration case against the company.
Melvin Berry challenged the EV manufacturer after supervisors failed to respond when he complained about being called the “N-word” and having Nazi swastikas and other hateful graffiti posted around Tesla’s California assembly plant.
Same behavior, different result
Berry’s case was unusual both in that it was considered a large amount and the details became public. Normally arbitration cases are private with details being confidential. Berry’s case only became public because his lawyer had to go to court to get Tesla to pay the settlement fees.
The Diaz case is even rarer because it almost never goes to court, as Tesla employees are required to go through arbitration as a condition of their employment, according to Berry. Dias was a contract employee from a staffing agency.
On top of that, the amount of the penalty is unprecedented, according to David Oppenheimer, a clinical professor of law at Berkeley Law, who told Bloomberg, “I believe that’s the largest verdict in an individual race discrimination case.”
What happens now?
Tesla informed its employees and the public through a blog post on its website. Valery Capers Workman, vice president, People, offered a point-by-point dissection of the case, clearly attempting to discount many of Diaz’s points.
She then offered up a conciliatory paragraph, saying it wasn’t the company’s fault and the ruling was errant, but things need to improve — and have improved.
“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,” she wrote. “We’re still not perfect. But we have come a long way from 5 years ago. We continue to grow and improve in how we address employee concerns. Occasionally, we’ll get it wrong, and when that happens we should be held accountable.”
She also reminded workers that “any discriminatory slurs — no matter the intent or who is using them — will not be tolerated.”