A federal jury in San Francisco awarded a contingent worker at Tesla Inc. $137 million in damages in a racial discrimination lawsuit. The award included $130 million in punitive damages. The Verge reported [1] the lawsuit was unusual because there was not an arbitration agreement in this case.
The filing. The plaintiff, Owen Diaz, was an elevator operator at the electric car company’s factory in Fremont, California, from June 2015 to May 2016.
Diaz, an African American, was employed by a staffing firm and started work at the factory in the summer of 2015, according to court records. Harassment included use of racial epithets and being told to “go back to Africa,” court records said. Diaz also heard racial slurs being used toward other Black employees, and he heard racial epithets being used in front of his son, who also worked at the factory. Diaz complained but no action was taken, the filing said. The filing also said one employee drew racist and derogatory caricatures of African children. It also said a Tesla supervisor was aware of the harassment.
Joint employers. In a blog post for Tesla workers [2], Valerie Capers Workman, VP, people, at Tesla, said the facts in the case don’t justify the verdict. Among the facts she noted was that Diaz was a contractor and not an employee of Tesla.
As joint employers, buyers and their staffing firms are equally responsible in matters of workplace harassment and discrimination claims, says Jean K. Hyams, a partner at Levy Vinick Burrell Hyams LLP who litigates such cases on behalf of claimants. Both companies should coordinate and cooperate with one another, each participating fully in the investigation and ensuring its completeness. In an article for Staffing Industry Review magazine [3], Hyams addressed how an investigation should be handled, from breadth to fairness to recognizing bias.
Tesla’s Workman contended in the blog post that the company did take corrective action regarding certain of Diaz’s complaints — the three times that Diaz did complain about harassment, Tesla required the staffing firms take action, which resulted in two contractors being fired and the suspension of the one who drew the racially offensive cartoons — but that he had not brought up the use of the n-word until he had not been hired full-time by the company.
She also said the company was informed about racist graffiti in the bathrooms, which was removed by janitorial staff.
“Like many companies in recent years, Tesla has instituted a diversity, equity and inclusion team to ensure equal opportunity for all,” said Fiona Coombe, SIA’s director of legal and regulatory research. “However, building a culture throughout the organization and the supply chain that espouses those values takes real commitment and action. The fact that the complainant was not an employee should not excuse the treatment that Diaz received, and legally would not be a valid defense.”
It is unclear whether Tesla plans to appeal the verdict.