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Tesla ordered to pay over $130 million in racism case

October 5, 2021

A US court has ruled in favor of a Black former employee who was subjected to racial abuse by his colleagues, ordering he be paid an unprecedented $130 million in damages.

Tesla Factory in Fremont, California
Tesla Inc is facing a litany of racial discrimination lawsuitsImage: picture-alliance/newscom/UPI Photo/T. Schmitt

A US District Court in northern California ordered Tesla Inc to pay over $130 million (€112 million) in damages to a Black former employee on Monday, according to reports from the Wall Street Journal.

Owen Diaz had sued the vehicle manufacturer over the racial abuse he allegedly endured while employed as an elevator operator at the Tesla plant in Fremont, near San Francisco. 

Diaz had worked a the factory during 2015 and 2016 and said he had been subject to racist slurs and offensive graffiti during that time. 

A federal jury decided that the employee had been subject to a racially hostile work environment and that Tesla had failed to take adequate measures to prevent Diaz from being racially abused, according to the report.

The jury awarded Diaz $6.9 in damages for emotional distress and $130 million in punitive damages, his attorney, Lawrence A. Organ, told the Washington Post.

Other complaints of racism at Tesla factory

The ruling comes as Tesla faces other racial discrimination complaints. Tesla has previously denied any knowledge of the alleged racist conduct at the plant, which has about 10,000 workers.

Earlier this year, the company had to pay $1 million to a Black former employee who had faced similar issues involving racism. 

That case was settled by arbitration, per company policy on resolving most employee disputes. However, Tesla rarely loses arbitration cases. Most complaints are settled behind closed doors, or abandoned altogether, Bloomberg reported. 

Diaz's case was not subject to arbitration, and could take his case to federal court because he was employed as a contractor through a staffing agency. 

Its not yet clear whether Tesla will appeal the court's decision. The settlement would be one of the largest ever paid out in a case involving racial discrimination at the workplace.  

According to the company's diversity, equity and inclusion impact report from 2020, Black people made up 10% of the total workforce, while only 4% could be found in leadership positions at American operations.

kb/jsi,wmr (AP, Reuters)