Tesla is ordered to pay ex-worker $137 million in racial abuse lawsuit, releases blog about verdict

Tesla has been ordered by the court to pay $137 million to an ex-contract worker at its Fremont factory in a racial abuse lawsuit.

Following the verdict, Tesla released a blog post defending itself – something the automaker rarely does since it dissolved its press relations team.

The plaintiff in the case is Owen Diaz, who worked at Fremont factory from June 2015 to May 2016 as a contract worker hired by a staffing company.

According to the lawsuit, Diaz, an elevator operator at the factory, worked in an environment where “daily racist epithets” were common, and he claims Tesla didn’t do enough to stop it. The Washington Post reports:

“Owen Diaz, an elevator operator who worked for the company between June 2015 and May 2016, sued Tesla, alleging a hostile work environment and racial harassment, and said “daily racist epithets” such as the n-word were used in the factory, where his son, Demetric, also worked. The initial suit by Diaz, who is Black, alleged that workers encountered a scene “straight from the Jim Crow era,” where workers were subjected to frequent racist harassment and supervisors took no action.”

The jury awarded $6.9 million in damages for emotional distress and $130 million in punitive damages.

It’s a unique case for Tesla, which generally takes these cases to arbitration, but this one ended up going to trial and now it is paying the cost.

However, the automaker is expected to appeal the verdict. Valerie Capers Workman, Tesla’s VP People, started to make Tesla’s case in an email to employees that the company shared publicly in a blog post:

Hi Team,

Earlier today, a jury in San Francisco decided that in late 2015 and early 2016 Tesla failed to make sure that one contract employee (Owen Diaz) was not racially harassed while he worked at the Tesla Fremont factory. I heard the testimony of every witness. I was at the defense table for Tesla every day during the trial because I wanted to hear firsthand what Mr. Diaz said happened to him. It’s important to understand the facts of this case. Here is what the jury heard:

  • Mr. Diaz never worked for Tesla. He was a contract employee who worked for Citistaff and nextSource.
  • Mr. Diaz worked as an elevator operator at the Fremont factory for nine months, from June 2015 to March 2016.
  • 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. They also told the jury about racist graffiti in the bathrooms, which was removed by our janitorial staff;
  • There was no witness testimony or other evidence that anyone ever heard the n-word used toward Mr. Diaz.
  • Mr. Diaz made written complaints to his non-Tesla supervisors. Those were well-documented in the nine months he worked at our factory. But he didn’t make any complaints about the n-word until after he was not hired full-time by Tesla – and after he hired an attorney.
  • The three times that Mr. Diaz did complain about harassment, Tesla stepped in and made sure responsive and timely action was taken by the staffing agencies: two contractors were fired and one was suspended (who had drawn a racially offensive cartoon). Mr. Diaz himself testified that he was “very satisfied” with the results of one of the investigations, and he agreed that there was follow-up on each of his complaints.
  • Even though Mr. Diaz now complains about racial harassment at Fremont, at the time he said he was being harassed, he recommended to his son and daughter – while they were all living together in the same home – that they work at Tesla with him.

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. 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.

The Tesla of 2015 and 2016 (when Mr. Diaz worked in the Fremont factory) is not the same as the Tesla of today. Since then, Tesla has added an Employee Relations team, dedicated to investigating employee complaints. Tesla has added a Diversity, Equity & Inclusion team dedicated to ensuring that employees have the equal opportunity to excel at Tesla. And Tesla now has a comprehensive Employee Handbook (replacing the Anti-Handbook Handbook) where all of our HR policies, employee protections, and ways to report issues are published in one easy-to-find online document.

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. And as I posted in July, we will continue to remind everyone who enters the Tesla workplace that any discriminatory slurs – no matter the intent or who is using them – will not be tolerated.

Thank You For All You Do For Tesla

VP, People

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