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A federal court in San Francisco has ordered Tesla to pay a former black entrepreneur $ 137 million after the Elon Musk-led automaker allowed a racist workplace culture to fester.
Ex-employee Owen Diaz, a former entrepreneur who was hired by a recruitment agency and worked at the Tesla factory in Fremont in 2015 and 2016, faced a racist and hostile work environment, said a jury Monday evening.
Diaz’s lawsuit alleged that employees drew swastikas and left graffiti and racist designs around the Tesla factory. He also alleged that employees often used the “N word” and other racist epithets.
“Tesla’s progressive image was a front that covered his regressive and demeaning treatment of African-American employees,” the lawsuit said.
In court, Diaz said he suffered “sleepless nights” and weight loss as he lost his appetite.
“Some days I would sit on my stairs and cry,” he told the jury, according to Bloomberg.
The jury awarded Diaz $ 6.9 million in emotional distress damages and $ 130 million in punitive damages, according to his attorney, Lawrence Organ of the California Civil Rights Law Group.
In court, Tesla’s attorneys argued that he had investigated and resolved all of the incidents reported by Diaz and had no intention of ignoring the rights and concerns of black workers at the plant.
It’s a rare case in which Tesla – the world’s most valuable automaker – has had to publicly defend itself in court against a former worker.
The company has a reputation for using compulsory arbitration to resolve employee disputes behind closed doors.
Private arbitration often allows companies to avoid costly damage or commit to taking major remedial action. Tesla rarely takes a hard hit in arbitration, despite paying $ 1 million in May in a case brought by another ex-entrepreneur similar to Diaz’s.
The company has come under pressure from activist shareholders to limit its use of arbitration and be more transparent about diversity and other issues.
An activist shareholding fund, Nia Impact Capital, has expressed concern that the use of compulsory arbitration may allow and mask sexual harassment and racist discrimination.
“The use of mandatory arbitration provisions limits employees’ remedies for wrongdoing, prevents employees from suing for discrimination and harassment, and may keep underlying facts, wrongdoing or wrongdoing a secret. the results of the case and thus prevent employees from learning and acting on common concerns, ”the social impact fund said in a recent shareholder proposal.
Proxy advisory firm Institutional Shareholder Services has recommended that shareholders vote for Nia’s proposal.
Tesla’s vice president of personnel, Valerie Capers Workman, addressed the decision in an email to employees on Monday evening in which she downplayed the allegations. Tesla then published the email in a blog post after his leak.
“In addition to Mr. Diaz, three other witnesses (all non-Tesla contract workers) told the trial that they routinely hear racist slurs (including the n-word) at the Fremont factory. While they all agreed that the use of the word n was not appropriate in the workplace, they also agreed that most of the time they believed that the language was used in a “friendly” manner and generally by people. African-American colleagues, ”she wrote. .
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