Tesla to Pay More Than $130 Million to Ex-Worker For Racist Treatment: 'Elon Musk, You've Been Put on Notice. Clean That Factory Up.'

Tesla failed to take appropriate steps to prevent the former worker from being racially harassed, according to the jury.

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By Chloe Arrojado

Bloomberg | Getty

On Monday, a jury awarded Tesla ex-worker Owen Diaz $137 million in damages after agreeing that Tesla had created a hostile work environment. Diaz was a contract employee who had worked as an elevator operator at Tesla's factory in Fremont, Calif., in 2015 and 2016. The Black ex-worker alleges that during that time, work colleagues repeatedly referred to him using racial slurs, and employees had left images like swastikas and derogatory caricatures of Black children around the factory.

Though Diaz had complained multiple times, he says the company didn't do much to address the behavior.

According to the Wall Street Journal, the trial was based on three claims. Diaz claimed Tesla subjected him to a racially hostile work environment, that the company failed to prevent him from being racially harassed and that supervision negligence caused harm to Diaz.

The jury sided with Diaz on all claims and ordered Tesla to pay Diaz $130 million in punitive damages and $6.9 million in compensatory damages for emotional distress. While Diaz originally sued Tesla alongside his son and another Black former worker, the older Diaz was the only one of the three whose claims made it to trial.

"It shines a light on what's going on inside of Tesla's factory," Diaz said following the verdict. "Elon Musk, you've been put on notice. Clean that factory up."

Related: How Should You Be Talking With Employees About Racism?

In a note to employees, Tesla's vice president of people Valerie Capers Workman wrote that while the company doesn't agree that the facts justified the verdict, the company was not perfect during Diaz's time as an employee.

"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 wrote. "We continue to grow and improve in how we address employee concerns. Occasionally, we'll get it wrong, and when that happens we should be held accountable."

Public trials are a rarity for Tesla, which usually settles employee disputes through mandatory arbitration. However, in May, another former Black worker was awarded $1 million after an arbitrator found that he was subjected to racial slurs by supervisors in the Fremont factory. The arbitrator wrote that Tesla was liable for the harassment because of the company's inaction.

"Every time he reported discriminatory conduct he was ignored," she wrote.

Related: 5 Ways to Respond to Racism at Work with Grace

Chloe Arrojado

Entrepreneur Staff

Editorial Assistant

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