Tesla Ordered to Pay $137 Million to a Black Former Contractor Over Racist Treatment

Tesla must pay nearly $137 million to a Black former worker who said he suffered racist abuse at the electric carmaker’s Bay Area factory.

A federal court in San Francisco agreed on Monday that Owen Diaz was subjected to racist harassment and a hostile work environment — three days before Tesla's annual shareholder meeting.

Diaz alleged in a lawsuit that he was harassed and faced “daily racist epithets,” including the “N-word,” while working at Tesla’s Fremont plant in 2015 and 2016 before quitting. Diaz was a contracted elevator operator.

Diaz also alleged that employees drew swastikas and left racist graffiti and drawings around the plant. He contended that supervisors failed to stop the abuse.

“Tesla’s progressive image was a façade papering over its regressive, demeaning treatment of [African American] employees,” the lawsuit said.

Diaz was awarded $6.9 million in damages for emotional distress and $130 million in punitive damages, his attorney, Lawrence A. Organ, said.

“It took four long years to get to this point,” Diaz told The New York Times. “It’s like a big weight has been pulled off my shoulders.”

Amy Oppenheimer, a Berkeley-based attorney with experience in workplace investigations, served as an expert witness for Diaz. She says employers as large as Tesla should have effective mechanisms in place to make sure racist incidents don't go unnoticed by supervisors.

"Here you have a huge employer with decent policies, but policies are easy. You can get them off the internet," she said. "The point is, what do you do with them? The point is, how do you enforce them?"

It wasn’t immediately clear whether Tesla would appeal the decision. The company’s vice president of human resources, Valerie Capers Workman, responded to the verdict through a blog post published on Monday.

"We strongly believe that [the facts of the case] don’t justify the verdict reached by the jury," Capers Workman wrote, and added, "We do recognize that in 2015 and 2016 we were not perfect."

Tesla previously denied any knowledge of the alleged racist conduct at the plant, which has about 10,000 workers.

In the post, Capers Workman also mentions that Diaz was a contractor who worked for an outside employer and therefore was never a Tesla employee.

But Oppenheimer, the attorney, told KQED that employers should be providing a safe workplace to anyone who supplies labor, whether they are employees or contractors.

"[Contractors] are your responsibility," she said, referring to employers. "It's your environment that you have to address."

She hopes this verdict will encourage more workers to speak up about workplace discrimination and, in turn, push employers to invest more resources in preventing these types of situations.

"It's not rocket science, Elon Musk. It's really caring about your employees and enforcing laws to protect them," Oppenheimer said.

If upheld, the award would be a blow to a company that has been subject to various allegations of workplace problems but requires employees to resolve disputes through mandatory arbitration, which the firm has rarely lost.

In May, an arbitrator ordered Tesla to pay more than $1 million over similar allegations by another former Fremont factory worker. That employee alleged that co-workers called him a racial slur and supervisors ignored his complaints.

Diaz, who was contracted through a staffing agency, didn’t have to sign an arbitration agreement.

This post includes reporting from The Associated Press and KQED's Holly McDede.