Tesla Has To Pay Former Employee $137 Million After Losing Court Battle

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Owen Diaz claims he was the victim of racial slurs.

Tesla had a rough September, and it doesn't seem like October will be much better. Earlier this week, we reported on Tesla's stellar sales figures in the third quarter, but this news will undoubtedly be overshadowed by Tesla's court battles in China and locally.

Tesla was the defendant in a lawsuit claiming it created a hostile working environment. The manufacturer was sued by Owen Diaz, an elevator operator who worked for the company between June 2015 and May 2016. On Monday, the jury ruled in favor of the plaintiff and ordered Tesla to pay Diaz $137 million in damages.

According to Lawrence A Organ of the California Civil Rights Law Group, the jury awarded Diaz $6.9 million for emotional distress and $130 million in punitive damages. For those unfamiliar with legal jargon, punitive damages are basically a warning to other companies that might be guilty of the same transgressions.


In the lawsuit, Diaz claimed Tesla created a hostile working environment at its Fremont factory. He claimed daily racial slurs, including the n-word. He further claimed that workers were subjected to these slurs without interference from supervisors. CNBC spoke with Diaz's lawyers, who stated that black workers were regularly told to "go back to Africa." There are also claims of racist graffiti in the bathrooms.

Tesla will likely appeal the ruling since that's its modus operandi. Tesla has yet to issue a statement, most likely because Elon Musk does not see the value in a public relations department. Not a good strategy for a company that has been sued for uncontrollable acceleration, limited supercharger access, and not being fast enough. The latter is a Model S owner who wasn't happy with Insane Mode. Elon Musk was also sued personally for calling a Thai cave rescue diver a pedo.

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Tesla's strategy in court was to strike the testimony of an expert witness, and claiming that Diaz was not technically an employee. According to CNBC, Diaz was a contract worker hired via a third-party staffing company in 2015.

"We were able to put the jury in the shoes of our client," Diaz's lawyer, J. Bernard Alexander, told CNBC. "When Tesla came to court and tried to say they were zero tolerance and they were fulfilling their duty? The jury was just offended by that because it was actually zero responsibility."

Though Tesla hasn't made a public statement yet, CNBC quotes a memo sent to employees, later posted as a blog. It was written by Tesla's Vice President of People, Valerie Capers Workman.

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The blog post makes several statements, including:

"In addition to Mr. Diaz, three other witnesses (all non-Tesla contract employees) testified at trial that they regularly heard racial slurs (including the n-word) on the Fremont factory floor. While they all agreed that the use of the n-word was not appropriate in the workplace, they also agreed that most of the time they thought the language was used in a "friendly" manner and usually by African-American colleagues. They also told the jury about racist graffiti in the bathrooms, which was removed by our janitorial staff."

The blog further claims that "there was no witness testimony or other evidence that anyone ever heard the n-word used toward Mr. Diaz." Furthermore, it states that Diaz urged his son and daughter to work for Tesla, even though he experienced racial harassment.

According to CNBC, Tesla will be facing another discrimination lawsuit in Alameda County in California.

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Source Credits: CNBC

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