Tesla ordered to pay $US137 million to ex-worker over racism in rare verdict

Tesla lost a case against a black former elevator operator and must pay an unprecedented $US137 million ($188 million) in damages for having turned a blind eye to racial taunts and offensive graffiti the man endured at the electric carmaker’s auto plant in Fremont, California.

Owen Diaz, a former contract worker who was hired in 2015 via a staffing agency, was subjected to a racially hostile work environment, a federal jury in San Francisco decided on Monday (US time). The award is among the most significant verdicts of its kind.

The electric carmaker was accused of turning a blind eye to racial taunts and offensive graffiti the man endured at its auto plant in Fremont, California.Credit:Bloomberg

“I believe that’s the largest verdict in an individual race discrimination in employment case,” said David Oppenheimer, a clinical professor of law at Berkeley Law. “Class actions are of course in a different category.”

Tesla’s vice president of people, Valerie Capers Workman, sent an internal email late on Monday that the company subsequently published in a blog post on its website titled “Regarding Today’s Jury Verdict.”

Workman wrote she was “at the defence table for Tesla every day during the trial because I wanted to hear firsthand what Mr. Diaz said happened to him.” The post said that “the Tesla of 2015 and 2016 (when Mr. Diaz worked in the Fremont factory) is not the same as the Tesla of today.”

Diaz’s case marks a rare instance in which Tesla, which typically uses mandatory arbitration to resolve employee disputes, had to defend itself in a public trial. The company almost never loses workplace arbitrations, though it was hit with a $USUS1 million award in May in a case brought by another ex-contract worker that was similar to Diaz’s.

The trial could embolden shareholder activists who have pushed Tesla’s board, so far without success, to adopt more transparency about its diversity goals and use of arbitration to resolve complaints regarding sexual harassment and racial discrimination. Tesla’s annual meeting is scheduled for October 7.

In court, Tesla argued that it never intended to disregard the rights and safety of African-American workers placed by the staffing agency at the plant and that all incidents reported by Mr Diaz were investigated and resolved.

In her closing arguments to the jury, Tesla attorney Tracey Kennedy said “Mr. Diaz’s story simply doesn’t make sense” in light of his encouragement to his son and daughter to take up jobs at the company. She also said Diaz’s claims weren’t supported by the evidence.

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