Tesla Ordered To Pay $137 Mln To Former Liftman For Racial Abuse Allegations

A San Francisco federal court has ruled that Tesla Inc (TSLA) will have to pay a former employee $137 million to settle a discrimination and racial abuse lawsuit.

The African American employee of Tesla's Freemont, California facility alleged the company of racial harassment during his time in the company back from June 2015 to May 2016.

Owen Diaz, an elevator operator in the facility for just short of a year, described his tenure at the company as "straight from the Jim Crow era," in his 2017 lawsuit against the company. He claimed that he was subjected to endless racial profiling and taunts like "go back to Africa" along with swastikas, graffiti, and other derogatory racial insults.

His lawsuit read, "Tesla's progressive image was a façade papering over its regressive, demeaning treatment of African-American employees."

The jury of the San Francisco court awarded a huge $130 million to the victim for punitive damages and an additional $6.9 million for psychological distress and trauma that Diaz had to endure. According to his lawyers, the company had previously tried to settle the matter with an arbitration agreement to slide the matter under the rug but Diaz decided to not sign the agreement.

Diaz's attorney, J. Bernard Alexander said, "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."

The effect of this trial has also made some of the shareholders of the company uneasy. One such shareholder, Nia Impact Capital believes that the arbitration policy does not only look like a blatant attempt to hide the dirt under the sheets but also has no meaningful impact on the wrongdoers.

The shareholder said, "The use of mandatory arbitration provisions limits employees' remedies for wrongdoing, precludes employees from suing in court when discrimination and harassment occur and can keep underlying facts, misconduct or case outcomes secret and thereby prevent employees from learning about and acting on shared concerns."

The company management, however, wanted to downplay the severity of the allegations and turned the blame to Diaz for taking the 'friendly' jokes to blow it out of proportions. Tesla Vice President of People Valerie Capers Workman posted a blog saying, "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."

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