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Tesla Discriminates Against Employees: Ordered to Pay Over 3 Million

photo of Corichia Martin Brisco

By Corichia Martin

Published 10:35 AM CST, Wed April 26, 2023

photo of Tesla Dealership

A jury ordered Tesla to pay over $3 million Monday in a racial discrimination case brought by Owen Diaz, a former elevator operator at Tesla's Fremont plant. Diaz initiated the lawsuit against Tesla, claiming he frequently encountered racial slurs, including the N-word, and observed racist graffiti and an offensive cartoon at the facility.

In October 2021, a jury awarded Diaz $137 million in damages in the case, but that decision was later overturned by a federal judge who determined the previous amount was excessive. US District Judge William Orrick offered Diaz $15 million in damages in the case instead, but Diaz rejected the offer, and chose to go to trial. The jury granted Diaz the revised amount in the second trial.

This case is separate from another lawsuit filed against Tesla by the California Department of Fair Employment and Housing, which reported receiving "hundreds" of complaints alleging racism and harassment at the Fremont plant.

Tesla has refuted the severity of the allegations in both cases but acknowledged the existence of issues that required attention at the factory.

Following the initial 2021 verdict of $137 million, Valerie Capers Workman, then Tesla's Vice President, penned a blog post stating, "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. We continue to grow and improve in how we address employee concerns."

Capers Workman, who is Black, has since departed from Tesla.

What Does the Law Say

A. Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex, or national origin in the workplace. Employers are also prohibited from retaliating against employees for opposing or complaining about discriminatory practices. In Diaz's case, the racial slurs, graffiti, and cartoons he encountered at Tesla's factory are examples of a racially hostile work environment, which constitutes a violation of Title VII.

B. California Fair Employment and Housing Act (FEHA)

The California Fair Employment and Housing Act (FEHA) prohibits employment discrimination based on race, color, national origin, religion, disability, sex, and other protected characteristics. Similar to Title VII, FEHA also forbids the creation or perpetuation of a hostile work environment based on race. The facts presented in Diaz's case also demonstrate a violation of FEHA.

Tesla Discriminates Against Employees

What Does All of This Mean for Tesla

The jury's award of $3,175,000 in damages to Diaz, while lower than the original award of $137 million, is still a significant amount of money to be paid for failing to comply with federal laws. Tesla, like many other companies should establish and implement policies that align with the law, take each and every allegation of violations seriously, create internal checks and balances that ensure managers understand and comply with federal regulations, and take swift action when violations occur. Companies should review and revise their policies regularly not only to ensure federal compliance, but to ensure that their policies are not the culprit for violations that lead to future liability.

At ReeLyfe Solutions, we understand navigating the world Human Resources (HR) and employment discrimination can be challenging for both employers and employees. Our Human Resources Firm offers comprehensive services to companies, federal agencies, and corporations to ensure adherence to HR regulations and best practices. Additionally, our Equal Employment Advocacy Firm is dedicated to supporting employees who have faced workplace discrimination and advocating for their rights.

We understand that a fair and inclusive work environment is essential for the success and well-being of all stakeholders. Whether you are an employer seeking guidance on HR compliance or an employee who has experienced discrimination, our team of experts is here to provide the assistance and advocacy you need. Don't hesitate to reach out to us for support in fostering a workplace where everyone's rights are protected and valued.

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