Tesla Loses Racism Lawsuit, Ordered To Pay $137 Million In Damages To Victim

Tesla’s Fremont factory. (source: The Verge / Wired)

In a rare judicial rebuke of the company, a federal jury in San Francisco has awarded a former Tesla contractor close to $137 million in damages after suffering heinous racism at their factory.

Owen Diaz, who is African-American, had worked at the Tesla plant in Fremont as a contract elevator operator from 2015 to 2016, where he described the workplace as akin to a “scene straight from the Jim Crow era”.

Diaz alleged in the lawsuit that he was routinely subjected to racial slurs throughout his time there, including being called n***** and told to “go back to Africa”. He also said that certain Tesla employees drew racist, derogatory caricatures which were left for others to see.

The Tesla factory in Fremont, California was their inaugural plant and employs over 10,000 people. (source: Tesla)

The financial award – $130 million for punitive damages, and $6.9 million for emotional damages – is believed to be the single largest payout in U.S. history for racism-related cases.

The court case is also notable as Tesla typically forces mediation with their disgruntled employees in-house, through a method known as ‘mandatory arbitration’.

This practice has drawn flak from civil society, and perhaps more consequentially their investors, as there is little transparency to their employee sexual and racial discrimination arbitrations.

Image for illustration purposes only. (source: UnionTrack)

Diaz’s case follows a $1 million award by the courts in May for a case under similar circumstances, which points towards the issue not being a one-off as the company is trying to portray.

For all of Tesla’s perceived modernity, their workplace culture still has a long way to go.