Home Technology Top Stories Business Most Featured Sports Social Issues Animals News Fashion Crypto Featured Music & Pop Culture Travel & Tourism

Tesla Loses Racism Suit, Ordered to Pay $3M to Employee

Author Avatar
By Judy Perkins - - 5 Mins Read

Tesla has paid $3 million following its loss in a lawsuit related to racism.

On Monday, a former employee of Tesla's assembly plant in Fremont, California won a racial discrimination case and was awarded over $3 million by a jury.

Owen Diaz, an elevator operator at the plant, filed a case reporting the frequent use of racial slurs, including the N-word, on the Fremont factory floor. Diaz also witnessed racist graffiti in bathrooms and a racially insensitive cartoon.

Diaz has been awarded a sum of $3,175,000 by a federal jury in San Francisco, which the electric car company will have to pay.

After winning his case in October 2021, Diaz was initially granted $136.9 million in damages by the jury. However, Tesla later requested a new trial. 

Before deciding on whether to allow this, Judge William Orrick offered Diaz the option of accepting a significantly reduced sum of $15 million, citing Diaz's relatively short employment at the factory and the absence of physical injury. 

Diaz had worked for Tesla for only nine months and has since been employed as a bus driver in Oakland. Diaz's legal team formally rejected the offer of $15 million, which is expected to lead to a new trial.

Owen Diaz giving an interview about lawsuit

Owen Diaz (YouTube SS)

The trial is distinct from a different case filed by the California Department of Fair Employment and Housing. The department has reported having received "hundreds" of worker complaints accusing the Fremont factory of racism and harassment.

Tesla refuted the accusations that the condition was as severe as claimed in the two lawsuits, although it acknowledged that there were issues that required attention at the facility.

After the initial $137 million verdict in 2021, Valerie Capers Workman, who was then the Vice President of People at Tesla, acknowledged in a blog post that the company was not flawless in 2015 and 2016 and that it still has room for improvement. His official statement is provided below.

"Although we understand that perfection is unattainable, we acknowledge that we did not meet our goals in 2015 and 2016. However, we have made significant progress since then and remain committed to further improvement. Our endeavors include the creation of an Employee Relations team, responsible for investigating employee complaints, a Diversity, Equity & Inclusion team, ensuring equal opportunities for all employees, and a comprehensive Employee Handbook outlining our HR policies and employee protections. 

Nonetheless, we recognize that more work is needed to ensure that every employee feels respected and valued at Tesla. As previously stated, we have a zero-tolerance policy for discriminatory behavior and will continue to remind all employees that such behavior is unacceptable." Tesla no longer employs Capers Workman, who is of Black ethnicity.

Recall that a report in 2015 brought to the notice of the public that this was not the initial instance of employees claiming that the Fremont factory was a racially hostile workplace. There was a case of one Melvin Berry, a former Tesla employee, who was awarded a $1 million judgment after an arbitrator determined that he was subjected to racial slurs by supervisors and other forms of racially hostile conduct. 

Also in 2021, the civil rights agency in California initiated legal proceedings against Tesla, accusing the automaker's Fremont manufacturing plant of racism and harassment. However, Tesla disputed the allegations and labeled the lawsuit as "misguided," emphasizing its stance against all types of discrimination and harassment. 

The self-driving car company reiterated its commitment to ensuring a workplace that is secure, equitable, respectful, and diverse. Nevertheless, Kevin Kish, the director of the California Department of Fair Employment and Housing, stated that the agency had received "hundreds" of complaints from employees.