Tesla ordered to pay worker $186 million for racial abuse

Racist language, slurs and cartoons could cost Tesla $186 million in damages after a former worker successfully sued the EV maker.

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Derek Fung
Derek Fung
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Owen Diaz has successfully sued Tesla for a hostile workplace and racial harassment, and has been awarded a massive payout from the electric car maker.

Diaz, a Black man, was an elevator operator who worked at Tesla’s factory in Fremont, California, between 2015 and 2016.

Lawrence Organ, Diaz’s lawyer, told The Washington Post the jury awarded his client US$6.9 million ($9.4 million) for emotional distress, and US$130 million ($177 million) in punitive damages.

The suit brought by Diaz claimed employees at the factory referred to him and others by the n-word, regularly used racist language, and that racist cartoons were left in prominent places around the factory.

He claimed the tipping point was when his own son, who also worked at the Fremont plant, began experiencing racism too.

During the trial Tesla argued Diaz wasn’t a Tesla employee as he was employed via a contractor, and that he couldn’t “conclusively” prove the company committed a “race discrimination violation” under the Civic Rights Act of 1866.

As Diaz wasn’t a direct employee of Tesla he wasn’t bound by a compulsory arbitration agreement, allowing him to sue Tesla over its workplace practices.

This isn’t the first time Tesla’s workplace culture has been called into question. Earlier this year, an arbitrator awarded a former employee US$1 million ($1.4 million) after he was called the n-word by colleagues and supervisors failed to act on his complaints.

It’s unclear if Tesla will appeal the case, but Valerie Capers Workman, Tesla’s head of human resources, posted an internal email regarding the court case on the company’s public blog.

In it, she admitted “that in 2015 and 2016 we were not perfect” and that Tesla is “still not perfect” although it has “come a long way from five years ago”.

She confirmed witnesses testified that there was racist graffiti in the bathrooms, and that racial slurs, including the n-word, were often used in the factory, although some of this was said “in a ‘friendly’ manner and usually by African-American colleagues”.

Three colleagues cited in incidents reported by Diaz were either suspended or fired.

Workman says Tesla has made progress by setting up a Diversity, Equity and Inclusion team, as well as an Employee Relations team to investigate complaints. The automaker has also junked its ‘Anti-Handbook Handbook’ for an all-inclusive online Employee Handbook that outlines all the company’s HR policies.

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Derek Fung
Derek Fung
Derek Fung is a Journalist at CarExpert.
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