Tesla ordered to pay massive $137 million settlement to Black employee who sued over racism, hostile work environment

A California court has demanded Tesla pay $137 million to a Black man who experienced racial discrimination and harassment while he worked as an elevator operator for the electric vehicle company.

Owen Diaz was initially hired for his job at the factory in Fremont, Calif., through a staffing agency in April 2015. During his year at the plant, Diaz said he would often face abuse at the hands of his supervisor and colleagues, who used slurs like the “n-word” on a near-daily basis.

The Tesla plant in Fremont, CA where Diaz was employed.

He also alleged employees scribbled swastikas alongside racial epithets already scratched into a bathroom stall, while derogatory caricatures of Black children regularly popped up around the factory, according to the New York Times. Before he departed the company in May 2016, Diaz claimed he was also told on more than one occasion to “go back to Africa”

What’s more, supervisors at Tesla consistently turned a blind eye to the behavior, said Diaz, who suffered weight loss and “sleepless nights” as a result of all the stress, Bloomberg News reported.

“Some days I would just sit on my stairs and cry,” he told the jury.

Diaz added that his breaking point came not because of his own experience, but because he witnessed similar racism directed toward his son, Demetric, who was working his first job with the company.

Federal jurors in San Francisco on Monday agreed Diaz was subjected to a racially hostile work environment amid his tenure at the factory and ultimately required that Tesla pay him an unprecedented $137 million in damages — including $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 employment case,” David Oppenheimer, a clinical professor of law at Berkeley Law, told Bloomberg.

But that’s not the only reason why the settlement is unique — Diaz’s case was only able to move forward because he had not signed one of Tesla’s mandatory arbitration agreements. Like many companies, the electric car-maker relies on the arbitration process to resolve disputes behind closed doors instead of battling it out in public with a trial.

Valerie Capers Workman, Tesla’s vice president of people, said in a statement on the automaker’s website that witnesses at the trial confirmed people often used the N-word while on the factory floor, but noted the same people were typically using the slur in a “friendly” manner.

“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,” Workman said.

“The Tesla of 2015 and 2016 (when Mr. Diaz worked in the Fremont factory) is not the same as the Tesla of today.”

Diaz, in an interview with the New York Times after the decision, expressed relief over the jury’s decision.

“It took four long years to get to this point,” he said on Monday evening. “It’s like a big weight has been pulled off my shoulders.”