Tesla Ordered to Pay Former Employee Owen Diaz $137 million Over Racist Treatment

A San Francisco federal court decided that electric carmaker Tesla must pay a former black elevator operator, Owen Diaz, around $137 million after he experienced a hostile work environment, including racial harassment and discrimination, at the company’s Fremont plant. The jury awarded more than attorneys asked for their client, including $130 million in punitive damages and $6.9 million for emotional distress.

Owen Diaz worked at the plant between June 2015 and May 2016 as a contractor, reports CNBC and The Washington Post. Diaz told the court that “daily racist epithets” were used in the plant, including the n-word; that racist graffiti and cartoons appeared in his workspace and the toilets; and that he was told to “go back to Africa” by colleagues. Supervisors failed to consistently intervene in these issues, said Diaz, and the stress of the situation caused him to suffer weight loss and “sleepless nights.” As reported by Bloomberg News, he told the jury: “Some days I would just sit on my stairs and cry.”

The judgement is unusual for a number of reasons. First, because of the amount of damages awarded by the judge ($130 million in punitive damages and $6.9 million for emotional distress). “I believe that’s the largest verdict in an individual race discrimination in an employment case,” David Oppenheimer, a clinical professor of law at Berkeley Law, told Bloomberg. And second, because the case took place in an open court at all. Like many Silicon Valley companies, Tesla often forces workers to agree to mandatory arbitration to resolve workplace disputes, meaning they can’t directly sue the company.

Activist Tesla shareholders have complained about the company’s use of arbitration for years, saying it stifles cases like these. “The use of mandatory arbitration provisions limits employees’ remedies for wrongdoing, precludes employees from suing in court when discrimination and harassment occur, and can keep underlying facts, misconduct or case outcomes secret and thereby prevent employees from learning about and acting on shared concerns,” said one group, Nia Impact Capital, in a recent shareholder proposal.

Despite this, Tesla has faced numerous allegations of racial discrimination and harassment at its Fremont plant. Tesla reportedly paid $1 million to another former employee, Melvin Berry, who said he was called the n-word by a supervisor, and the company currently faces a class-action lawsuit alleging racism at the same facility.

In response to the verdict in Diaz’s case this week, Tesla’s Vice President of People, Valerie Capers Workman, sent an email to employees later published as a blog post. In it, Workman says that when Diaz complained about harassment “Tesla stepped in and made sure responsive and timely action was taken,” but acknowledges a number of incidents took place, and notes that “[t]he Tesla of 2015 and 2016 (when Mr. Diaz worked in the Fremont factory) is not the same as the Tesla of today.” Workman did not say whether Tesla plans to appeal the ruling.