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Jury Sends Strong Message with $157 Million Verdict Against Tesla

A Tesla contract worker won a huge award against the electric car manufacturer. Owen Diaz worked as an elevator operator at the Tesla factory in Fremont, California. He said that a supervisor and other employees repeatedly used racial slurs, including the N-word at the factory. He also saw a drawing with an “oversize[d] mouth, big eyes and a bone stuck in the patch of hair scribbled over a long face, with ‘Booo’ written underneath.” A supervisor admitted to drawing the racist figure. Diaz complained, but the company failed to take enough action to stop the conduct. When his son experienced the same racial epithets while working at the company, Diaz said he broke. A juror interviewed following the verdict told Time, in reference to Tesla, “They claim to have a zero-tolerance policy, but suspended rather than fired, and ignored rather than rectified or retrained their employees on proper prevention.”

Other employees also allegedly objected to the work environment. However, Tesla employees sign mandatory arbitration agreements for all employee disputes. As a contract worker, Diaz did not sign an arbitration agreement, allowing him to sue. According to press reports, Tesla rarely loses its workplace arbitrations. The Los Angeles Times reported that Tesla did have to pay $1 million on an arbitration issue in May. Some shareholders have pushed Tesla to be more transparent about its arbitrations over racial issues and sexual harassment.

Tesla argued that it investigated and resolved all complaints made by Diaz. It will likely appeal the jury’s award which allocated $6.9 million for emotional distress and $130 million for punitive damages. It is also likely that the high punitive damages award will be reduced by the court.